• The fund had a total of 80,000 bitcoin worth $3 billion
Luna Foundation Guard announced on Monday that it had spent almost all of the bitcoin, worth $3 billion, in its reserve, in a futile attempt to save terraUSD (UST), as it fell below its intended $1 peg, last week.
The nonprofit fund, aimed at promoting and stabilizing the Terra ecosystem (which issues UST and LUNA), set up by Terra creator Do Kwon, had earlier announced that it would buy $10 billion of bitcoin to back UST.
The fund tweeted that it had transferred 52,189 bitcoins of a total of more than 80,000 bitcoins to “trade with a counterparty.”. A further 33,206 bitcoins were sold by Terra directly in a last-ditch effort to defend the peg, the foundation said.
What comes next?
Currently, the fund has 313 bitcoins remaining in its reserves worth $9.3 million. The firm intends to utilize the remaining $85 million in crypto assets to “compensate remaining users” of UST.
“We are still debating through various distribution methods, updates to follow soon,” Luna Foundation Guard said.
The foundation had accumulated bitcoin worth $3 billion, as well as other tokens including BNB, tether, USDC, and avalanche. Kwon had promised to use the bitcoin in the event of a dramatic fall in the value of UST.
UST’s price plummeted further in response to Monday’s announcement – from 15 cents to 7 cents.
Before the collapse, UST’s market capitalization was $18 billion, way more than the nearly $4 billion the foundation had in reserve.
Source: CoinDesk, Twitter
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