Luna Foundation Guard spent $3 billion in failed attempts to recover UST

Luna Foundation Guard (LFG), a not-for-profit organization set up to fuel the growth of the Terra ecosystem, has reported that it sold nearly its entire reserves of bitcoin to prevent a massive drop in the native token LUNA and the leading stablecoin UST.

LFG reported on Twitter that on May 7, a day before UST began to break its engagement with a target of $1, it earned 80,394 bitcoin were sold, which were valued at approximately $3 billion. With this, approximately 26.2 million USDT, about 2.35 million USDC, about 1.9 million AVAX, 1.6 million LUNA and 6,97,344 UST were sold. Despite this continuing decline, LFG exchanged an additional 33,206 bitcoins for 1,164,018,521 UST on May 10 in a final attempt to maintain UST’s engagement with the dollar.

After this failed attempt, LFG has a reserve of about $81 million, up from about $4.1 billion at the beginning of this month. LFG said it is looking to use the rest of its assets to pay compensation to UST’s holders. The LUNA token, which serves as Terra’s governance token, was reduced in value by about 99 percent. If an entity purchases more than 50 percent of the supply of LUNA tokens, it will be able to change the protocol. This situation could be misused to damage the Terra blockchain. Holders of Governance Tokens can vote on resolutions related to governance. Governance token holdings could change the way blockchains work.

The developers of this blockchain have paused transactions to keep the security strong, but this has angered members of the Terra community. Other stablecoins have reserves in common assets but TerraUSD maintains it through an algorithm that controls supply and demand using Luna, another balancing token. stablecoins There are cryptocurrencies that try to link their market price to a reserve asset such as gold or common currencies. These are more commonly used for digital transactions that involve converting virtual assets into real assets. <!–

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