16 May Luna Foundation Guard Breaks the Silence and Reveals How Much Was Spent to Defend UST’s Peg
The Luna Foundation Guard (LFG) finally broke the silence and revealed exactly how much they spent to defend the UST peg throughout the events of last week.
As CryptoPotato reported, UST – the algorithmic stablecoin of its ecosystem – lost its peg and came crashing last week.
Because of how the protocol was designed, losing the peg meant that traders could redeem UST for LUNA in a massive arbitrage that saw the printing of over 6 trillion LUNA, causing its price to go to $0 in a few days.
It’s important to note that LFG had previously acquired a number of cryptocurrencies to be used in emergency situations like these. Unfortunately, it was for not – as the entire ecosystem came crashing by.
Today, LFG revealed exactly how much of their reserves were sold in a bid to defend the UST peg.
Prior to the events of last week, their reserves consisted of: 80,394 BTC, 39,914 BNB, 26,281,671 USDT, 23,555,590 USDC, 1,973,554 AVAX, 497,344 UST, 1,691,261 LUNA.
Consistent with its non-profit mission & focus on the health of the Terra ecosystem, beginning on May 9, when the price of UST began to drop substantially below one dollar, the Foundation began converting this reserve to UST.
Per the tweet, LFG did so by using on-chain swaps while also transferring BTC to a counterparty to enable them to enter trades with the Foundation in large size and on short notice.
LFG directly sold 26,281,671 USDT, 23,555,590 USDC, transferred 52,189 BTC to trade with a counterparty, net of an excess of 5,313 BTC that they have returned, for an aggregate of 1,515,689,462 UST.
That said, LFG has yet to post any transaction sheets indicating that the money was spent to defend the peg.
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