LFG lost almost everything to save UST depegging; here's the revelation
Amid TerraUSD (UST) and Terra (LUNA) turning into ashes, leaving questions for the leadership to answer, the non-profit organization responsible for defending the peg, Luna Foundation Guard (LFG), has disclosed its reserves.
LFG reveals how it used its reserves
According to a Twitter thread posted by the LFG, the organization held a reserve consisting of the following assets as of May 7, 2022:- 80,394 BTC
- 39,914 BNB
- 26,281,671 USDT
- 23,555,590 USDC
- 1,973,554 AVAX
- 697,344 UST
- 1,691,261 LUNA
It directly executed on-chain swaps and transferred Bitcoin to a counterparty "to enable them to enter trades with Foundation in large size and on short notice." According to the information provided by the LFG, it directly sold 26,281,671 USDT & 23,555,590 USDC for an aggregate 50,200,071 UST. It also revealed the transfer of 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.
Fear results in further dumping
The foundations' remark comes as the Terra community criticizes Terra's reserve funds, which were intended to belong to the "decentralized" Terra community.Notably, the price of UST fell even lower in response to Monday's Tweet, from $0.15 to $0.07, a drop of about 50%. As Kwon is only left with 313 BTC units after the heavy sell-off to defend the peg, the community displayed its fear by dumping the so-called stablecoin. It is trading around 12 cents, at the time of publication.
Terraform Labs sold another 30,000 BTC from LFG's reserves on May 12, according to LFG (TFL). As a result of the failed attempt to defend UST, LFG acknowledged that the remainder of its reserve assets, which formerly totaled over $3 billion, had nearly vanished.
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