Luna Foundation Guard, the Singapore-based organization created by Terra to hold its Bitcoin reserves, revealed that it has sold almost all of its BTC.
Since Saturday, May 7, when UST's peg to the US dollar first faltered, the Luna Foundation Guard began selling its Bitcoin reserves.
The non-profit organization created by Terraform Labs to hold its crypto reserves has revealed on Twitter that currently holds only 313 BTC, out of a total reserve of 80.394 BTC that existed until last week. This amount of bitcoins was valued at $2.904 billion last Saturday, May 7.
Nearly all of the BTC that Terra had accumulated in the weeks leading up to UST's implosion was sold in an attempt to save the algorithmic stablecoin's peg.
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Both the price of Bitcoin (BTC) and Terra (LUNA), the native cryptocurrency of the Terra blockchain, have fallen following the news. LUNA is currently trading at around $0,00022, showing a 20% drop in the past 24 hours.
Terra's bitcoins were converted to UST
In a post on Twitter, the Luna Foundation Guard detailed that when the price of the UST stablecoin began to decouple from the dollar, the organization began selling the bitcoins it held. This move, converting BTC to UST, was done in a failed attempt to save the stablecoin's peg, it explained.
Its primary mission was to safeguard the health of the Terra blockchain ecosystem, so it was forced to convert the Bitcoin reserve into UST when the price of the stablecoin began to fall substantially below one dollar.
According to the report submitted by the Luna Foundation Guard, the reserves in LUNA, USDT and USDC were also converted to UST. The organization still holds its reserves in AVAX and BNB intact, while in Bitcoin, it holds only 313 BTC.
Less than $202 million in LUNA and UST
The breakdown of the Luna Foundation Guard's cryptocurrency reserves also shows that the organization still holds 1.847 billion UST and 222,7 million LUNA. However, due to the huge drop in these cryptocurrencies in the market over the past week, its reserves in LUNA and UST barely add up to $201,78 million to Terra's reserves.
At the current price of LUNA, the 222,7 million tokens held by the organization are valued at a mere $48.996, currently. A week ago, this same amount of LUNA would have been worth over $16.000 billion.
The data provided by the organization on Twitter is not yet reflected on the Terraform Labs reservations web portal.
Luna Foundation Guard Reserve Balance. Source: Lfg
Luna Foundation Guard further revealed that over $883 million was exchanged for LUNA to increase its network stake through various validators. This was done in order to protect against a potential governance attack as LUNA minting reached stratospheric levels and its price continued to fall on the market.
As of today, according to data from CoinMarketCap, the amount of LUNA in circulation exceeds 6,5 billion tokens.
Terra's plans: Reward those affected and create the new network
After further revealing the fate of Terra’s Bitcoin reserves, the organization noted that it is working on ways to use its remaining assets to compensate users affected by the crash of their cryptocurrencies. It noted that it will first focus on helping smaller UST and LUNA holders.
“We are still discussing through various distribution methods, updates will follow soon”, the organization detailed.
On the other hand, its founder, Do Kwon, has been tweeting about plans to fork the network to create a new blockchain. A few hours ago, he mentioned that the Luna Foundation Guard will open voting for A governance proposal for the Terra network fork and called on blockchain developers to commit and show their support for this new line of action.
If the governance proposal is approved by the community this week, the network fork will be coordinated with validators by next Friday, May 27, Kwon said.
Continue reading: Vitalik Buterin thinks Terra should forget about LUNA's whales
