Terra Alliance has closed a $32 million funding round to support its stablecoin project. The venture has won the backing of four of the world’s largest cryptocurrency exchanges — Binance, OKEx, Huobi and Upbit’s parent company Dunamu.
А list of leading global blockchain-focused funds, including Polychain Capital, FBG Capital, Hashed, 1kx, Kenetic Capital, and Arrington XRP Capital have also joined as investors alongside major mainstream funds like TransLink Capital.
Terra Alliance, led by South Korean e-commerce marketplace Ticket Monster (TMON), said in a press release on Wednesday it is seeking to create “a stable digital currency that is immune to the price volatility that comes with speculation and manipulation”. The cryptocurrency will compliment the group’s existing token, Luna, which acts as collateral on its blockchain platform.
“From experience, I know that faster, more secure transactions at a fraction of today’s fees could be a game-changer for many eCommerce platforms,” Terra co-founder Daniel Shin stated. “However, our vision goes beyond positioning Terra as a trusted and secure medium of exchange for eCommerce. The potential application of Terra is immense, and we foresee it being used for all types and forms of financial products like loans and insurance.”
The initial seed capital will be used to build the financial system on the blockchain, whose beta testing is set to begin in the final quarter of 2018. Terra will initially back its tokens with fiat currency raised from its investment partners. The company, plans to raise a total of $100 million and use 90% of that for the currency reserve.
Shin further revealed that once Terra gets widespread traction, each transaction will generate a small payout to a second cryptocurrency that will serve as the stabilizing reserve fund, and eventually wean the project off of fiat currency.
Another strategic investment for Binance
“While we see many stablecoins coming out, Terra's journey is especially meaningful as they are designing one of the few price-stable protocols with existing, working, and strong go-to-market strategy and usage. We are constantly impressed by the founders’ leadership and earnest commitment to the business, and excited to support the team,” Binance Labs head Ella Zhang said as quoted in Terra’s press release.
Binance’s contribution to Terra’s stablecoin project represents another major move for the Hong Kong-based exchange after the launch of its $1 billion investment fund in June. Earlier this month, the company made its first ever acquisition, buying US-based crypto wallet provider Trust Wallet. As revealed by CEO Changpeng Zhao, Binance intends to make 10-20 investments per year.
Binance, which celebrated its first year of operations on July 14, rose to prominence already in the first six months of its operations and has been disputing the first place in the cryptocurrency exchange ranking since then. Presently, it has more than 10 million users and daily trading volumes of more than $1 billion. The company made a $300 million profit for the first half of this year and expects a net profit of $500 million to $1 billion for full 2018.