LFG provides loan worth $1.5 billion to keep UST stable
The LFG announced on Monday that it will lend $750 million worth of Bitcoin (BTC) to over-the-counter (OTC) trading firms to protect the UST peg and UST 750 million from BTC accumulation as markets market conditions would normalize.
As market conditions improve, traders will exchange money on both sides of the market to help achieve both offers, finally maintaining the parity of the LFG reserve pool (denominated in BTC).
Notably, the algorithmic stablecoin tied to the Terra crypto ecosystem, UST, recently saw a noticeable directional flow over the weekend, dropping below its expected $1 position, accompanied by similar volatility in LUNA and BTC. However, he quickly recovered from the sudden fall and is currently trade at $0.996 at press time.
Via a Twitter thread, LFG said it was “cautious to prepare for possible future volatility”. The organization added that it will “proactively advocate for the stability of the $UST peg and the broader Terra economy, particularly amid volatile and uncertain macroeconomic conditions in legacy markets.” .
Build a strong stable supply of coins
In February, LFG raised $1 billion to create a Bitcoin-based reserve that would serve as a backstop for UST pecking. The stablecoin of the organization dethroned the Binance USD (BUSD) to become the third largest stablecoin thanks to its constant efforts.
The Luna Foundation is known for its Bitcoin optimism. He spent $1.5 billion last week to buy 37,863 BTC. At the start of this week, LFG had over $3 billion worth of bitcoins in its reserve, putting it on track to amass $10 billion in stablecoin reserves by the end of Q3 2022.