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Terraform Labs has raised $25 million in a new round from Galaxy Digital, Coinbase Ventures, Pantera Capital and others.
The stablecoin for e-commerce creator has already proven people will use its volatility-free tokens in decentralized finance (DeFi) to buy synthetic stocks, and plans to attract blockchain denizens to even more use cases.
“We look forward to using the funds for building key pieces of infrastructure in the Mirror Protocol for synthetics, Anchor Protocol for savings and other killer DeFi applications to make Terra’s algorithmic stablecoins the centerpiece of the decentralized finance movement,” Terraform’s co-founder Do Kwon said in a press release.
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Terraform Labs is behind a platform for minting different stablecoins for e-commerce that mimic the value of various fiat currencies. It’s also behind the Chai payments app, an e-commerce wallet that’s widely used in Asia and powered by stablecoins.
“The Terra ecosystem has brought the benefits of programmable money to commerce and will do the same for finance,” Pantera Capital’s Paul Veradittakit said in a press release.
Previous investors Hashed, Arrington XRP and Kenetic Capital also participated in what Terraform Labs is calling a “growth fundraising round.”
“Terra has already made a successful payment case for more than 2 million users in the Korean market, and is also rapidly growing in the DeFi space,” Simon Kim, CEO of Hashed, said in a press release.
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Founded in 2018, with a co-founder behind one of South Korea’s larger e-commerce sites, Terra launched with $32 million in backing from Binance and Polychain, among others. Each Terra stablecoin (such as TerraUSD or the one tracking the South Korean won, TerraKRW), relies on the system’s LUNA token to maintain its peg.
LUNA is the governance token for the blockchain, as the white paper explains. It is minted and burned in order to enforce the peg for any Terra stablecoin, so the governance token absorbs the volatility to defend its stablecoins’ utility.
DeFi catalyst
Most entrepreneurs on Ethereum agree that DeFi Summer never would have happened had stablecoins not proved they could stay stable.
The Terra stablecoins are notable because they operate outside the Ethereum ecosystem, the platform most associated with DeFi. Terra’s blockchain is Tendermint-based, making it part of the larger Cosmos ecosystem.