LFG To Loan $1.5 Billion In BTC And UST
The algorithmic co-stable stablecoin UST, which is connected to the Terra ecosystem, seems to have rebounded since last Saturday’s low, but fell below the expected $1 threshold. UST was trading at $0.9955 on the Binance exchange. Although this seems like a small difference, we need to underline that stablecoins are fixed at 1 dollar.
The LFG stated that it will “proactively defend the stability of the $UST stabilizer and broader Terra economy, particularly amid volatility and the uncertainty of macro conditions in legacy markets.”
4/ As a result, the LFG Council has voted to execute the following:
– Loan $750M worth of BTC to OTC trading firms to help protect the UST peg.
– Loan 750M UST to accumulate BTC as market conditions normalized.
— LFG | Luna Foundation Guard (@LFG_org) May 9, 2022
As Koinfinans.com stated, LFG’s board of directors includes Terraform Labs co-founder Do Kwon, Terraform Labs research head Nicholas Platias and Jump Crypto head Kanav Kariya. It is possible to say that the management team of the project is quite strong in this regard.
The Singapore-based nonprofit group was founded in January to support the Terra ecosystem and “the sustainability and stability of Terra’s algorithmic stablecoins,” according to a previous announcement.
LFG had raised $1 billion in February to create a Bitcoin-based reserve that would act as a support mechanism for the UST fix. As of earlier this week, LFG continued to hold more than $3 billion in BTC in its reserves.
Immediately after the release of this report, Kwon explained, “We felt it was valuable to have ready-to-deploy capital in the current market, even though the buying and selling of UST is not currently in a meaningful direction.”
“As the markets improve, we plan to have the loan repaid to us in BTC and increase the size of our total reserves,” he continued.
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