LUNA Foundation Drains 80K of BTC Reserve for UST

LUNA Foundation Drains 80K of BTC Reserve for UST
  • Luna Foundation Guard held a reserve that contained 80,394 BTC as of May 7.
  • The foundation sold 80,082 BTC for UST with an effort to save its peg.
  • LFG to reimburse its remaining assets to UST holders.

Amidst Terra’s catastrophic crash last week, Luna Foundation Guard disclosed that it had sold 80,082 of its Bitcoin reserves between May 8 and 10, 2022. On May 16, the foundation shared a thread on Twitter revealing that they began converting its reserves to UST during UST and LUNA price drop.

The non-profit foundation announced that as of May 7, LFG held a reserve containing 80,394 Bitcon, among other cryptocurrencies. 

LFG began converting its reserves to UST on May 8 when the price of UST began to drop below $1, emphasizing the action was made through its mission and focus on the health of the Terra ecosystem.

The foundation did it by “directly executing on-chain swaps and transferring $BTC to a counterparty,” which authorizes the foundation to take part in large size and short notice transactions.

In summary, LFG directly sold all of its USDT & USDC reserves for more than 50 million UST. Converted 52,189 BTC to transact with a counterparty, returned a net excess of 5,313 BTC, that accumulated more than 1.5 billion UST.

In the final efforts to defend its peg when UST value dropped to $0.75 on May 10. Terraform Labs, acting on behalf of the Foundation, sold 33,206 BTC to accumulate more than 1.1 billion UST. On May 12, LFG traded 883 million UST to 221 million LUNA.

The Foundation plans to reimburse its remaining assets to repay its last UST holders, starting with the lowest amount. LFG will come up with updates as soon as they finish discussing several distribution options.

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Bryan is a gamer who became genuinely interested in crypto after his initial exposure to Play-to-Earn games like Axie Infinity and Pegaxy. He has basic knowledge of technical analysis and is keeping an eye out for interesting developments in the metaverse and GameFi space.