LFG Swapped Over 80k BTC for $UST Soon After Stablecoin Lost Peg

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Altcoins
LFG Swapped Over 80k BTC for $UST Soon After Stablecoin Lost Peg

On May 16, Wu Blockchain reported that the LFG currently holds a reserve of merely 313 BTC. The announcement came after LFG noted that they converted most of their reserves when UST began to lose its peg on the 8th. 

LFG Now Holds 313BTC

Wu Blockchains tweet read, 

“LFG revealed the whole process of using the reserve BTC, the original 80,394 BTC is currently only 313BTC left: Beginning on May 8, when the price of UST began to drop substantially below one dollar, the Foundation began converting this reserve to UST.”

Earlier in the day, the Luna Foundation Guard, through a Twitter thread, explained how much reserves they held earlier for UST. In their tweet, the LFG mentioned that as at Saturday May 7th, they were holding a reserve of over 80,394BTC, 39,914 BNB, 26,281,671 $USDT, 1,973,555 $AVAX, 1,691,261 $LUNA, 23,555,590 $USDC and 697,344 $UST.    

However, the LFG currently only holds 313 BTC after exchanging over 80k BTC. Wu Blockchain mentioned that LFG converted most of its BTC reserve into UST in a mission to return the stablecoin into its $1 peg. They converted the assets by directly executing on-chain swaps.

Updates on Other Reserves

While posting about the BTC amounts held, LFG also mentioned that they also swapped and exchanged some other assets. LFG directly sold 23,555,590 $USDC and26,281,671 $USDT  for an aggregate 50,200,071 $UST · LFG also transferred around 52,189 $BTC for trading with a counterparty, net of an excess of 5,313 $BTC “returned, for an aggregate 1,515,689,462 $UST.”

According to the LFG thread, they had a master’s services agreement on January 10 this year, allowing them to execute some exchange trades in case of problems. The sold BTC swapped around 880 million UST into LUNA to protect against governance attacks. 

At the moment, the LFG reserve still holds “313 $BTC · 39,914 $BNB · 1,973,554 $AVAX · 1,847,079,725 $UST · 222,713,007 $LUNA.” While most of these assets are currently in other wallets, LFG noted that they would be returning the reserves to their right place. The staked Luna is unbonding at the moment and will be returned to the original in a few days. 

According to the Twitter thread, these assets remaining in the reserves will be used to compensate small UST holders. They are still debating various distribution methods; updates to follow soon.

LFG and Terra

The recent problems associated with the UST algorithmic stablecoin have vastly impacted the Terra ecosystem, leading to halting the blockchain. Luna was delisted for hours in many exchanges following the massive volatilities. However, the coin was reinstated in some exchanges including Binance.

While it appears things are settling down for the crypto market, LUNA and UST are still trading miles below their standard. This connection of BTC to UST caused many problems for the former when the latter lost its peg. 

Adam Robertson

Adam is outgoing young lad who likes adventures and discovering new things. Despite his boring life, He loves writing about cryptocurrencies and exploring what blockchain technology can do for the coming digital world where all adventures will be virtual.