Luna Foundation Guard (LFG), the non-profit group holding Terra’s bitcoin reserves, confirmed on Monday morning that it had bought over 80,000 BTC over the previous week to purchase TerraUSD (UST) in an try to defend its crumbling U.S. greenback peg.
“Consistent with its non-profit mission & focus on the health of the Terra ecosystem, beginning on May 8, when the price of $UST began to drop substantially below one dollar, the Foundation began converting this reserve to $UST,” LFG mentioned in a Twitter thread.
Singapore-based LFG works to cultivate demand for Terra’s stablecoins and “buttress the stability of the UST peg and foster the growth of the Terra ecosystem.” It was in control of buying and holding bitcoin to construct the UST reserves.
The basis mentioned it started transferring bitcoin funds to a counterparty “to enable them to enter trades with the Foundation in large size & on short notice.” That counterparty acquired north of fifty,000 BTC in alternate for over 1.5 billion UST.
As the UST worth stored dropping, failing to shoot again towards its supposed $1 peg, Terraform Labs, the tech startup behind the event of Terra, bought 33,206 BTC for 1.16 billion UST on May 10 “in a last ditch effort to defend the peg,” LFG mentioned.
As of May 16, LFG holds 313 bitcoin in reserves, out of 80,394 BTC it held on May 7. The basis additionally holds a handful of different property, together with UST and LUNA. The majority of its LUNA is staked (locked up) “across a range of validators to protect against a possible governance attack” because the token’s worth stored dropping close to zero and the quantity of LUNA in circulation skyrocketed.
“The Foundation is looking to use its remaining assets to compensate remaining users of $UST, smallest holders first,” LFG mentioned in a final tweet. “We are still debating through various distribution methods, updates to follow soon.”
