Luna Foundation Guard, the fund set up by Terra founder Do Kwon, has pledged to use bitcoin in a sharp drop in the value of the UST. He said Monday that Terra sold 33,206 bitcoins outright as a last-ditch effort to defend the anchor as the UST fell below its expected $1 peg, the Financial Times reported May 16th. However, it used up almost all bitcoin in its reserves last week, failing to save UST (terra USD).
As of Monday, Luna Foundation Guard had just 313 bitcoins left in its reserves, worth about $9.3 million. The company said it would use what’s left of its $85 million in crypto assets to compensate the remaining users.
UST is a stablecoin that relies on a complex set of codes and a floating token called luna to balance supply and demand and stabilize prices. When UST began to fall below $1 last week, luna began to sell off, leading to a vicious cycle where UST plummeted below 30 cents, and luna became worthless. According to CoinGecko, UST is now worth just 9 cents.
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