The Luna Foundation Guard (LFG), a non-profit organisation that supports the Terra ecosystem, has announced plans to compensate remaining users of stablecoin terraUSD (UST), starting with the smallest holders.
“The Foundation is looking to use its remaining assets to compensate remaining users of $UST, smallest holders first,” LFG said in a twitter statement on Monday.
10/ The Foundation is looking to use its remaining assets to compensate remaining users of $UST, smallest holders first.— LFG | Luna Foundation Guard (@LFG_org) May 16, 2022
We are still debating through various distribution methods, updates to follow soon.
The foundation is still debating on the various distribution methods, and will update about the plans soon.
The compensation plan is part of the announcement where LFG documented how it disbursed millions of dollars-worth of crypto in its failed attempt to maintain the peg of stablecoin terraUSD (UST).
In one of the most calamitous events in crypto memory, the $40 billion Terra ecosystem collapsed last week.
The UST de-pegged from its $1 value last week, while its sister token Terra (Luna) slumped nearly 100% after big investors started dumping millions of dollars’-worth of UST over the last weekend.
UST is currently trading at $0.084853 against its usual price level of $1, while Luna was at $0.00018, down nearly 100% against the $80 level 14 days back.
The creators of Terra attempted to stabilise the token, but failed in their efforts.
In the statement on Monday, LFG said that as of Saturday (7 May 2022), the foundation held a reserve consisting of the following assets 80,394 bitcoin, 39,914 Binance Coin, 26,281,671 tether, 23,555,590 USD Coin, 1,973,554 Avalanche, 697,344 teraUSD and 1,691,261 terra.
“Consistent with its non-profit mission & focus on the health of the Terra ecosystem, beginning on May 8, when the price of $UST began to drop substantially below one dollar, the Foundation began converting this reserve to $UST,” the statement on Twitter read.
The foundation did so by directly executing on-chain swaps and transferring bitcoin to a counterparty to enable them to enter trades with the foundation in large size and on short notice.
Notably, LFG has declared that it has sold 33,206 bitcoin, showing it is as of left with just 313 bitcoin after the UST crash.
Other tokens left in the reserve are 39,914 Binance Coin, 1,973,554 Avalanche, 1,847,079,725 terraUSD, and 222,713,007 Luna (of which 221,021,746 is currently staked with validators).
The LFG statement has come amid criticism that Terra’s reserve funds were handled with a lack of transparency.