Do Kwon, the founder of Terra (LUNA), claimed in a recent edition of the Unchained podcast with Laura Shin that Terra (LUNA) is a layer-2 solution for Bitcoin (BTC), and that Bitcoin just needs to be good at one thing: being a valued asset.
Kwon feels that Terra (LUNA) can help Bitcoin bridge the gap to various use cases across a myriad of apps from DAOs to NFTs to DeFi.
Kwon has stated that a dip in Bitcoin’s price would be “bad” for the stability of the UST stablecoin, but he believes Bitcoin (BTC) would rise. Kwon informed Shin that he is unconcerned by short-term volatility because he believes in BTC’s long-term growth. He further added,
“I’m sort of betting that the long term scenario of Bitcoin going up and the reserves being strong enough to withstand UST demand drops is the more likely scenario.”
Many individuals believe Ethereum (ETH) will eventually outperform Bitcoin (BTC) in terms of value, according to Kwon in the podcast. Kwon, on the other hand, disagrees. He believes Bitcoin will remain at the top because it is calcified and reluctant to adapt to new technology. While Ethereum is slower to adapt than some of the other smart contract networks, it is still much faster than Bitcoin.
Ethereum, according to Kwon, does not have the same foundation narrative or Lindy effect as Bitcoin. The Lindy effect is a theoretical phenomenon in which the future life span of non-perishable objects, such as technology or ideas, is proportionate to their current age, for people who are unfamiliar.
LUNA the most valued prospective Bitcoin holder
Terraform Labs, which created the Terra (LUNA) blockchain platform, plans to purchase $3 billion in Bitcoin as a backup for the UST stable coin.
Kwon has been buying Bitcoin (BTC) to hold as 40 percent of the UST stablecoin’s collateral in Terra’s treasury. Terra has so far purchased 30727.9 BTC, with the most recent buy on March 29 being 2,943 BTC. Terra is currently the third-largest holder of Bitcoin Cash in a single wallet.
One of the key goals of the Luna Foundation Guard (LFG), Terra’s treasury, according to Kwon, is to make Terra “the largest single-wallet holder of BTC.” Kwon will need to collect more than 125,051 BTC to dethrone Michael Saylor’s MicroStrategy, according to Bitcoin wallet tracker Bitcoin Treasuries.
Kwon’s remark stunned the cryptocurrency community. Antiprosynthesis, an Ethereum (ETH) developer, retweeted, asking if all entities using BTC to support a stablecoin are Layer-2 solutions. At the time of press, Terra (LUNA) was priced at $102.74 with a drop of 4.4%.