Luna Foundation, a non-profit organization stated that just 313 BTC are now left on the Bitcoin reserves for Terra’s UST stablecoin.
This non-profit organization holding Terra’s bitcoin reserves, Luna Foundation Guard (LFG), confirmed on May 16, 2022 morning that it has sold more than 80,000 BTC in the past week to buy TerraUSD (UST) aiming to defend its crumbling U.S. dollar peg.
LFG said in a Twitter thread:
“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.”
Singapore-based LFG strives 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 charge of buying and holding Bitcoin to develop the UST reserves.
The foundation stated that it started transferring bitcoin funds to a counterparty:
“To enable them to enter trades with the Foundation in large size & on short notice.”
LUNA Now Striving To Rise Again
That counterparty got over 50,000 BTC in exchange for more than 1.5 billion UST. As the UST value kept plunging, failing to shoot back toward its initial $1 peg, Terraform Labs, the tech startup behind the development of Terra, sold 33,206 BTC for 1.16 billion UST on May 10 “in the last-ditch effort to defend the peg.”
Buy Bitcoin NowAs of May 16, LFG holds 313 bitcoin in reserves, down from 80,394 BTC it held on May 7. The foundation also has a handful of other assets, like LUNA and UST. Most of its LUNA is staked “across a range of validators to protect against a possible governance attack” as the token’s price plunged violently to almost zero and the amount of LUNA in circulation exploded.
LFG said in a final tweet:
“The Foundation is looking to use its remaining assets to compensate remaining users of $UST, smallest holders first. We are still debating through various distribution methods, updates to follow soon.”
