After UST de-pegged on May 9th, causing a cascade effect of billions of LUNA minted, the Luna Foundation Guard disclosed what happened precisely to their reserves which were meant to stabilize UST, keeping it pegged to USD. Let’s look at LUNA and UST and any related news this morning.
Luna Foundation Sells Over $3 Billion to Save UST
According to a series of tweets published this morning, the Luna Foundation Guard explained their efforts to defend the peg.
1/ As of Saturday, May 7, 2022, the Luna Foundation Guard held a reserve consisting of the following assets:
· 80,394 $BTC
· 39,914 $BNB
· 26,281,671 $USDT
· 23,555,590 $USDC
· 1,973,554 $AVAX
· 697,344 $UST
· 1,691,261 $LUNA— LFG | Luna Foundation Guard (@LFG_org) May 16, 2022
LFG has a significant amount of reserves in the form of BTC, BNB, USDT, USDC, and AVAX. That means on May 7th, LFG had roughly $5 billion in funds to help defend UST’s $1 peg.
Throughout the past week, LFG sold billions worth of their reserves to attempt and stabilize the peg, which unfortunately has failed.
After exhausting most of its funds, LFG’s current reserves are slightly below $300 million. The foundation is looking to utilize the rest of its funds to compensate the remaining UST users, the smallest holders, first.
Another Terra Ecosystem Revival Plan
Meanwhile, users on Terra’s official forums are coming up with several other revival plans for the Terra ecosystem, one of the most supported ones currently called The Sanest Compromise.
A user named wlawyer outlines a plan where Terra either switches to a new chain or burns all the tokens except for 1 billion.
The 1 billion new tokens would be allocated as follows:
- 20% to developers
- 40% to LUNA holders at the time of depegging
- 10% to LUNA holders at the end of the old chain
- 30% to the rescue financiers or angel investors.
The fresh start would allow investors to support the project and compensate old holders for the LUNA and UST downfall.
According to the plan, a $3.5-5 billion valuation could be achieved assuming the revival plan works.
LUNA and UST Price Continues to Drop
After this morning’s news, UST price hit a new all-time low of $0.10, while LUNA continues its downward spiral, currently trading at $0.0001644.
LUNA’s overall market capitalization is still at $1 billion but could hit the millions in the next few hours if the bearish trend continues.
Today’s announcement is anything but positive. The relatively low amount of reserves currently held by the Luna Foundation Guard adds to the uncertainty and fear of investors either looking to buy the dip for LUNA or those holding their LUNA/UST in the hopes of a recovery.
The good news is that there is progress this week with the community establishing several proposals and the Luna Foundation Guard disclosing their reserves.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency.
Also Read:
Top 3 Metaverse Crypto Coins Below $250 Million Market Cap to Watch in May 2022
Follow us on Twitter @thevrsoldier to stay updated with the latest Metaverse news!
Image Source: ivanbabydov/123RF
