New Delhi: Luna Foundation Guard (LFG), a non-profit organization that supports the Terra ecosystem, has announced plans to compensate remaining users of the stablecoin TeraUSD (UST), starting with the smallest holders.
“The Foundation intends to use its remaining assets to pay first compensation to the remaining users of UST, the smallest holders,” LFG said in a Twitter statement on Monday.
The foundation is still debating the various distribution methods, and will update about its plans soon.
The compensation plan is part of the announcement where LFG documented how it disbursed millions of dollars worth of crypto in its failed attempt to maintain the peg of the stablecoin TeraUSD (UST).
In one of the most devastating events in crypto memory, the $40 billion Terra ecosystem collapsed last week.
UST de-pegged from its $1 value last week, while its sister token Terra (Luna) fell nearly 100% last weekend after large investors began dumping millions of dollars worth of UST.
UST is currently trading at $0.084853 against its normal price level of $1, while Luna was at $0.00018, down almost 100% against the $80 level 14 days ago.
The creators of Terra attempted to stabilize the token, but were unsuccessful in their efforts.
LFG said in a Monday statement that as of Saturday (7 May 2022), the foundation holds the following assets: 80,394 Bitcoin, 39,914 Binance Coin, 26,281,671 Tether, 23,555,590 USD Coin, 1,973,554 Avalanche, 697,344 TeraUSD and 1,691,261 Tera. ,
“In line with its non-profit mission and focused on the health of the Terra ecosystem, the Foundation began converting this reserve to UST starting on May 8, when the price of UST began to drop significantly below a dollar ,” the statement read on Twitter.
The Foundation did this by executing direct on-chain swaps and transferring the bitcoins to a counterparty so that they could enter trades with the Foundation at a larger size and at short notice.
Notably, LFG has announced that it has sold 33,206 bitcoins, indicating that UST is left with just 313 bitcoins after the crash.
The other tokens remaining in reserve are 39,914 Binance Coin, 1,973,554 Avalanche, 1,847,079,725 TeraUSD, and 222,713,007 Luna (of which 221,021,746 are currently with validators).
LFG’s statement comes amid criticism that Terra’s reserve fund was handled with a lack of transparency.