Since January 2022, the Luna Foundation Guard (LFG) has been responsible for helping to develop the Terra (LUNA) crypto-project. The foundation successfully raised an initial $1 billion in February, which is aimed at securing its UST stablecoin (indexed to the US dollar), among other things. The LFG does not keep this financial windfall in dollars, however, and regularly buys bitcoins (BTC) with it.
Nearly 40,000 more BTC for Luna and its UST
At the end of March 2022, Luna Foundation Guard bolstered its collateral reserves for the stablecoin UST by purchasing an initial batch of 5,934 bitcoins. The latest purchase, which we’ll look at today, is even larger.
As reported by CNBC, among others, on May 5, LFG actually exchanged $1.5 billion in UST for 37,863 bitcoins, very exactly. That is to say, a unit cost price of around $39,600 per BTC.
The (very) big investors are fans of UST
We learn in detail that the exchange was made with two partners. First, $1 billion of UST with the specialist digital currency broker Genesis. And second, $ 500 million hedge fund Three Arrows Capital (also specialized in cryptocurrencies).
With this new massive purchase, the Terra project is getting closer to its goal, set by Do Kwon, co-founder and CEO of Terraform Labs. The latter is to reach $10 billion in reserves for the LUNA and UST ecosystem.
“For the first time, you’re starting to see a currency indexed (to the dollar) that’s trying to follow a [currency standard based on] Bitcoin…now that we’re living in a period where there’s an excess of fiat currency printing at all levels, and monetary policies are highly politicized, there are citizens who are self-organizing to try to bring the systems back to a healthier paradigm of money.”Do Kwon, co-founder and CEO of Terraform Labs
Although at first glance lofty, Terra’s ecosystem reserve goal appears to be on track. Luna Foundation Guard’s Bitcoin deposits are now reportedly approaching $3.5 billion. Furthermore, and despite the very sluggish Bitcoin and crypto market, the LUNA price is doing quite well, at least compared to others.