The Luna Foundation Guard (LFG) said on Monday that it will lend out hundreds of millions of dollars in Bitcoin and UST stablecoins to protect future rates amid volatile market conditions.
UST, the algorithmic stablecoin tied to the Terra crypto ecosystem, has slipped below the $1 equivalent, although it has recovered since Saturday’s low. At press time, UST is trading at $0.9955 against USDT on Binance.
In a tweet thread, the LFG said that it will “proactively safeguard the stability of the USD UST rate and the broader Terra economy, especially under the volatility and uncertainty of macroeconomic conditions, scale in older markets.”
“Traders will trade capital on both sides of the market to help achieve both #1 and #2, ultimately maintaining LFG reserve pool parity (in BTC) as market conditions gradually stabilize. determined”, the subject continued to explain.
LFG’s board of directors includes Terraform Labs co-founder Do Kwon, Terraform Labs head of research Nicholas Platias, Jump Crypto president Kanav Kariya and others.
The Singapore-based nonprofit group was formed in January to support the Terra ecosystem as well as the “sustainability and stability of Terra’s algorithmic stablecoins,” according to an announcement post at the time. there.
In February, The Block reported that LFG had raised $1 billion to build a Bitcoin-based reserve that would serve as a support mechanism for the UST peg. As of earlier this week, LFG held more than $3 billion in Bitcoin in its reserves.
In a follow-up tweet series posted after this report was released, Kwon wrote that “as buying and selling UST currently has no sense of direction, we feel it is very valuable to have capital ready to be deployed.” declared in the current market.”
“When the market recovers, we plan to exchange loans in BTC, increasing the size of our total reserves,” he said.