The Luna Foundation Guard (LFG) will lend $1.5 billion in bitcoin (BTC) and terraUSD (UST) on May 9, 2022. So today we will talk about what exactly is Luna Foundation and why did Luna Foundation decide to Loan $1.5B in BTC and UST to Defend Stablecoin’s Peg. Let’s find out by reading the article below.
What is the Luna Foundation?
Luna Foundation Guard Ltd. operates as a not-for-profit organisation. The organization is focused on creating and delivering open source software and applications for greater economic sovereignty, security and sustainability, promoting the decentralized economy and providing advisory services.
Why did Luna Foundation decide to Loan $1.5B in BTC and UST to Defend Stablecoin’s Peg?
This isn't the first time UST has lost its peg. But the controversial algorithmic stablecoin has been de-pegged again just days after the group backing it, the Luna Foundation Guard (LFG), purchased $1.5 billion in bitcoin to bolster the stablecoin's reserves.
On May 9, 2022, The Luna Foundation Guard (LFG) has announced that it will lend $1.5 billion in Bitcoin and stablecoin TerraUSD (UST) to defend the latter's peg during a period of market volatility and uncertain macro conditions in traditional markets. Terraform Labs (TFL) founder Do Kwon also clarified that the Luna Foundation is not trying to exit its Bitcoin position by lending out $750 million in cryptocurrency. Instead, the goal is to strengthen liquidity pegged to the U.S. dollar, he added. It all started when UST witnessed massive withdrawals from the Terra anchor protocol. It is worth noting that UST deposits currently bring investors an annualized return of 18.8%. As a result, Anchor’s total UST deposits decreased from $14 billion to $11.2 billion.
According to SplitBrick co-founder Pedro Ojeda, 16,000 addresses interacted with Anchor during the same period, with twice as many addresses withdrawing as deposits. The executive also asserted that market events did not appear to originate with retailers. Terra’s Twitter account claimed that a small group of whales accounted for most of the outflow.
I hope this article will help you to learn what exactly is Luna Foundation and why did Luna Foundation decide to Loan $1.5B in BTC and UST to Defend Stablecoin’s Peg. Right now, the founder Do Kwon is listed as wanted by Interpol.
