Luna Foundation Guard released $3 billion from the reserve fund to save the UST

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Non-profit organization Luna Foundation Guard (LFG) has disclosed information about the state of the reserve fund after trying to save the algorithmic stablecoin TerraUSD (UST).

In early May, LFG purchased an additional ~$1.5 billion worth of bitcoins and brought its balance in the first cryptocurrency to 80,394 BTC. As of May 7, the fund held funds in several other crypto assets, including Tether (USDT), USD Coin (USDC), Binance Coin (BNB), Avalanche (AVAX), as well as UST and the Terra token (LUNA).

Analysts at The Block Research calculated that the total value of the coins in the reserve fund was almost $3.2 billion.

On May 8, UST lost its peg to the US dollar. This happened against the backdrop of an outflow of assets from the Anchor protocol due to a decrease in the rate of return on deposits to 17.87%.

On May 10, the quotes of the asset fell below $0.62. The fall continued on May 11, after which the LUNA cryptocurrency used to issue UST fell to $0.3.

The LFG team spent ~26.3M USDT, ~23.5M USDC, and 33,206 BTC to support the stablecoin peg, buying back the coin’s excess supply. The movement of another 47,188 BTC in the organization was not disclosed.

On May 17, LFG reported holding 313 BTC and the same amount in BNB and AVAX. The volumes of depreciated UST and LUNA owned by the organization increased significantly. According to The Block Research, the value of reserves decreased to ~$268.3 million, and excluding project tokens, it was ~$87 million.

After the publication of the LFG on the state of the fund, the price of the stablecoin fell from around $0.14 to levels near $0.09.

LUNA quotes fell below $0.0002 (CoinGecko).

The LFG said it hopes to “use the remaining assets to compensate UST users, primarily small-value holders.”

Recall that Vitalik Buterin urged the project to focus on reimbursing losses to small investors.

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Source: Cryptocurrency

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