Luna Foundation Guard reveals details of its Bitcoin reserve usage
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Luna Foundation Guard, the entity responsible for protecting the UST peg (the stablecoin in the Terra ecosystem), revealed how it used the available Bitcoin reserves before the recent disaster involving the Terra ecosystem. The organization sold a portion of the owned bitcoins directly, while another portion was traded on various dates to try to stabilize the value of the UST. The reserve amounted to more than 80,000 BTC.
LFG Explains Reserve Moves Luna Foundation Guard (LFG), the organization charged with protecting the UST peg to the dollar, the algorithmic stablecoin of the Terra ecosystem, broke its silence to explain the use of the assets under its custody. The foundation had amassed more than 80,000 BTC, which was to be used in the event of market disruptions affecting the value of terrausd (UST).
According to reports on social media, the foundation spent almost all of its BTC reserves in a failed attempt to rescue UST. This was performed in three different operations. In the first, LFG sold 26,281,671 USDT and 23,555,590 USDC for a total of 50,200,071 UST, in what was the first defensive transaction against the depeg incident.
LFG also stated the following: “52,189 BTC were transferred for trading with a counterparty, net of an excess of 5,313 BTC returned, for a total of $1,515,689,462.” However, the company did not identify the counterparty involved in this transaction. Recent procedures Even with LFG intervention, connectivity was not restored.
LFG announces that Terraform Labs redeemed its last BTC reserve on May 10, when the UST market price touched $0.75. This transaction included the sale of 33,206 BTC for a total of 1,164,018,521 UST. Luna's reserve now consists of only 313 BTC, meaning that most of the BTC owned by the organization has been deployed in defense efforts.
Other cryptocurrencies in the reserve, including 39,914 BNB and 1,973,554 AVAX, have not been used and remain in the organization's possession. However, there is no clear answer on how it will be used in the future.
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