Luna Foundation Guard (LFG), a Singaporean entity that is establishing a reserve protocol for the algorithmic stablecoin UST has announced that it will lend out $1.5 billion in bitcoin (BTC) and TerraUSD (UST) in order to defend the peg of the stablecoin to the US dollar.
<h2><strong>$750M in Bitcoin + $750M in UST</strong></h2>
In a tweet thread, <a href="https://www.cryptoknowmics.com/news/lfg-becomes-the-second-largest-corporate-holder-of-bitcoin-surpassing-tesla" target="_blank" rel="noopener">LFG</a> stated that it would loan out $750 million worth of BTC to trading firms to help protect the peg and also loan $750 million in UST to accumulate bitcoin to help normalize the market, especially under volatility and the uncertainty of macro conditions in legacy markets.’

https://twitter.com/LFG_org/status/1523512201088143360

LFG further added in the thread,

"The traders will trade the capital on both sides of the market to help accomplish both #1 and #2, eventually maintaining parity of the LFG Reserve pool (denominated in BTC) as market conditions progressively stabilize".
<h2><strong>Founder Do Kwon Explains the Rationale</strong></h2>
In a separate tweet thread, Do Kwon, the project's founder, said that the move to loan out $750 million of bitcoin shouldn't be seen as LFG trying to exit its BTC position but rather increasing the liquidity around the UST peg.

Infact, LFG will buy more BTC if UST expands from here, he added.

https://twitter.com/stablekwon/status/1523532476898897920

Amid a period of market volatility, the UST briefly lost its peg to the U.S. dollar, falling to <span class="tw-text-gray-900 dark:tw-text-white tw-text-3xl"><span class="no-wrap" data-price-btc="0.0000296541739816199" data-coin-id="12681" data-coin-symbol="ust" data-target="price.price" data-price-previous="0.9964141405032896">$0.996414 at the time of writing.
</span></span>

Luna Foundation Guard Will Lend Out $1.5B in BTC and UST for Its Stablecoin Peg

Luna Foundation Guard (LFG) has announced that it will lend out $1.5 billion in bitcoin (BTC) and TerraUSD (UST) to defend the algorithmic stablecoin UST.

Jafrin is a cryptocurrency journalist/researcher fascinated by the world of decentralization. She is hopeful towards blockchain’s innovation and its potential to reshape the world for good. Currently, she is bringing out the best of cryptosphere via covering the latest ins and outs of the blockchain space.

Luna Foundation Guard Will Lend Out $1.5B in BTC and UST for Its Stablecoin Peg

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