- Lending BTC and UST to maintain consistency in LFG Reserve Pool.
- Attain a $10 Billion BTC target by the 2022 third quarter-end.
The LFG, the company backing Terra, has tweeted about their preventative action to avoid future market instability like the one they faced during the previous week. Insights on the incident are, that synchronized misevents have seemed to be made on the Terra ecosystem. It started with a considerable amount of UST being taken back from the Anchor protocol, followed by a withdrawal from Curve. On the weekend, a single account made a large dump of around $195 million worth UST on Ethereum and Binance, creating a shortage of LUNA tokens. Later this de-peg on UST was equalized by another wallet which exchanged $200 million UST for Tether, bringing the UST’s peg. After this rollercoaster, LFG released a thread on Twitter explaining their takeout and further steps.
1/ Over the past several days, market volatility across crypto assets has been significant.— LFG | Luna Foundation Guard (@LFG_org) May 9, 2022
The market turmoil is also reflected by the past week's uncertain macro conditions across legacy asset classes.
Further Course of Actions
LFG Council has voted out for two measures as stated in the tweet- one is lending $750 million of BTC to OTC trading firms to help protect the UST peg, and the other is, as market condition normalizes loan 750 million UST to accumulate BTC. It also points out that traders will trade both ways to maintain consistency in Reserve Pool. The $10 billion Bitcoin attainment goal by Terraform Lab is also well known, at the start of this month, $1.5 billion BTC was bought by Terra with $3.5 billion in-store.
Do Kwon, co-founder, and CEO of Terraform Labs, states:
“For the first time, you’re starting to see a pegged currency that is attempting to observe the bitcoin standard. It’s making a strong directional bet that keeping a lot of those foreign reserves in the form of a digital native currency is going to be a winning recipe.”
They estimate to achieve this goal by this year’s third quarter-end, which is believed to strengthen UST.