Luna Foundation Guard bought $1 billion worth of bitcoins
The funds will be used to create a reserve fund to maintain the stability of the UST stablecoin
28.03.2022 - 08:40
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What’s new? The Luna Foundation Guard (LFG), a non-profit organization, has bought $1 billion worth of bitcoins as part of increasing the stability of the algorithmic stablecoin UST. This was stated by Anthony Pompliano, the founder of venture capital company Morgan Creek Digital, on Twitter.
“Terra has officially bought $1 billion of bitcoin to back their UST stablecoin with the bitcoin standard. They will continue buying billions more in the coming months.”
What is known about LFG’s plans? The $1 billion bitcoin purchase is designed to increase the stability of UST by creating a reserve fund. The model involves providing liquidity in bitcoin to maintain a stable UST price. If the price of the stablecoin falls below $1, LFG will be able to place the accumulated assets in the BTC/UST pool and provide exchanges with 1 UST in exchange for $0,98 in bitcoin.
The Luna Foundation Guard (LFG), a non-profit organization, is dedicated to promoting open-source technologies and has two main tasks: supporting UST and developing the Terra ecosystem. Terra is a network of blockchains designed to create stablecoins with collateral in the native Luna token. For example, the mechanism for issuing a UST stablecoin involves the burning of LUNA’s native coins at the appropriate cost.
The LFG previously conducted the burning of 4 million LUNA tokens to acquire the external collateral of the UST stablecoin.
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