The Luna Basis Guard’s (LFG) projected cryptocurrency reserve to guard in opposition to the UST stablecoin’s collapse arrived too late to forestall final week’s market chaos.
UST’s Bitcoin Reserve was too late to save lots of the greenback peg
The shortage of a proper mechanism in place for the challenge’s foreign money reserve – supposed to forestall a disaster of confidence in UST’s greenback peg – left the stablecoin uncovered to a market meltdown as digital belongings dropped alongside conventional markets.
As a substitute, officers had been compelled to improvise options, giving $1.5 billion in bitcoin loans to maintain the peg after which apparently making an attempt to get new funding for the challenge.
LFG amassed a complete of 70,736 bitcoins (value over $2 billion) as an FX reserve for Terra’s algorithmic stablecoin UST, which just lately suffered a catastrophic depeg and precipitated mayhem within the crypto market.
Though LFG tried to save lots of UST utilizing these bitcoins, it was unsuccessful. As a #"
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