The creators of the Tendermint-based Terra stablecoin suite are opening a fund to promote the use of its tokens wherever there are decentralized finance (DeFi) businesses - and that primarily means Ethereum.
Terraform Capital
Announced Thursday, Terraform Labs launched a $ 10 million fund, Terraform Capital, to drive the integrations of its dollar-pegged stablecoin, TerraUSD (quotation UST), or its governance token, LUNA, across the DeFi covering the cost of security audits.
This follows a $ 25 million funding round that was attended by many of the largest cryptocurrency venture capitalists last month. “The fund's main goal: to increase the integration of UST on Ethereum's DeFi stack,” said Do Kwon, co-founder of Terraform Labs.
"Expected ROI: High - can fund a hundred audits with few successful integrations." The fund is building a list of security reviewers to get ready to move quickly and get new offers with the security guarantees early adopters want. Right now they have some companies that are already at work: Sentnl, Quantstamp and Solidified.
A fund to grow the DeFi ecosystem
"In 2020 alone, over $ 240 million worth of digital assets were lost or stolen as a result of DeFi attacks, but no funds were compromised in Quantstamp's controlled code," Quantstamp CEO Richard Ma said in a press release.
Terraform is known to want to incentivize the use of UST and LUNA, but it is not at all concerned about the choice of the blockchain on which to base the project. Although Terra is built on a Tendermint blockchain, this fund is happy to invest wherever Terraform's cryptocurrencies can go.
“We want this fund to accelerate the amount of construction that can take place on Ethereum (and any other tier 1 builders choose),” said Jeffrey Kuan, of Terraform's business development team. He added that security audits are the main cost barrier for these new teams.
“We hope the fund will reduce the friction as much as possible for the promising teams they are building, with the aim of increasing the GDP of the blockchain ecosystem,” Kuan said. A fund run in this way touches the fundamentals that drive a symbolic battle rather than fostering any of the tribal fighting that takes place around cryptocurrencies.
One of Terraform Labs' original supporters, Michael Arrington, founder of Arrington XRP Capital, said in a phone call that it doesn't matter to LUNA owners where UST is used, because the two tokens are inextricably linked. “If there is a product that uses UST, it drives LUNA's demand,” Arrington said. "Whether it's on Ethereum or Cosmos, it doesn't matter."
