The nonprofit organization focused on the open-source stablecoin network behind Terra USD, Luna Foundation Guard, has closed on a $1 billion raise through the sale of LUNA tokens.

In a Tuesday tweet, Terra said Jump Crypto and Three Arrows Capital led the $1 billion round with participation from DeFiance Capital, Republic Capital, GSR, Tribe Capital and others. The platform said proceeds from the sale — $1 billion — would “go towards establishing a Bitcoin-denominated Forex Reserve for UST,” a stablecoin in the Terra ecosystem.

1/ The long awaited [REDACTED] 3 is here! The Luna Foundation Guard (LFG) has closed a $1 billion private token sale to establish a decentralized $UST Forex Reserve denominated in $BTC!

“One common criticism of algorithmic stablecoins is their reflexive nature and the hypothetical risk of a "bank run" scenario where demand to sell the stable outstrips supply in a way that causes compounding price decreases in both native tokens,” said Terra. “Although the widespread adoption of UST as a consistently stable asset through market volatility should already refute this, a decentralized Reserve can provide an additional avenue to maintain the peg in contractionary cycles that reduces the reflexivity of the system.”

Terra said it chose to denominate the Forex Reserve in Bitcoin (BTC) because it considered the crypto asset "less correlated to the Terra ecosystem." The platform said that more details on the UST reserve’s function and design would be released in the coming weeks.

The protocol’s website said it utilizes “basic market forces of supply and demand” to maintain a stable price for coins including UST:

Related: Cointelegraph Consulting: A look at Terra’s ecosystem

Based in Singapore, the Luna