Coin News

Luna Foundation Guard buys additional $1.5 billion in bitcoin backing for UST

5 May, 20222 min readBitcoin
Luna Foundation Guard buys additional $1.5 billion in bitcoin backing for UST

The Luna Foundation Guard (LFG), a nonprofit created to support the Terra ecosystem, announced the purchase of $1.5 billion worth of bitcoin (BTC) for its stablecoin reserves on Thursday.

According to its announcement, LFG bought 37,863 BTC ($1.5 billion) via over-the-counter swaps with Genesis Trading and Three Arrows Capital. Of the $1.5 billion, $1 billion was an OTC swap with Genesis while the other $500 million was acquired from Three Arrows Capital.

Thursday's announcement means that LFG’s bitcoin reserves have grown to $3.5 billion, 30% of the way to the stated goal of $10 billion. The purchase also saw LFG’s wallet become the seventh-largest single BTC holder, according to data from BitInfoChart’s “Bitcoin Rich List.”

As previously reported by The Block, these bitcoin acquisitions are part of efforts by the LFG to build up reserves for the TerraUSD (UST) stablecoin. Terraform Labs CEO Do Kwon has contributed funds to enable the organization to proceed with its bulk BTC purchases.

Apart from bitcoin, the LFG has also bought $100 million in avalanche (AVAX) tokens for its stablecoin reserves.

The LFG’s play is part of an emerging trend of algorithmic stablecoins acquiring crypto assets as part of their collateral reserve. Tron’s USDD stablecoin is also about to launch with plans for a collateral reserve that may go as high as $10 billion.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Source

Subscribe to get our top stories

Coin News
App StoreApp Store