Luna Foundation Guard promises to compensate investors of TerraUSD (UST)

Veny Cespedes West

Luna Foundation Guard announced on Monday its reserves in cryptocurrencies, including a promise of compensation for users who lost money in its UST stablecoin.

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// Veny West for Newsbreak

Last week Terraform Labs and Luna Foundation Guard were in liquidity problems after TerraUSD (UST) lost its US dollar parity.

An error in its decentralized algorithm caused an overproduction of Terra (LUNA), reaching 6 trillion coins issued, and therefore, a 100% devaluation reaching a minimum of $0.0000011 USD per Terra (LUNA) on May 12.

The foundation plans to use the remaining assets to compensate TerraUSD (UST) users, taking small investors as a priority, however, it is not yet known what the distribution method will be.

According to the official website of Luna Foundation Guard, AVAX is currently its largest cryptocurrency reserve, followed by BNB.

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Source: Luna Foundation Guard - https://dashboard.lfg.org

LFG had 80,394 Bitcoin (BTC) in its reserve, of which it used 80,000 (about 750 million USD at the time) to help protect TerraUSD's (UST) parity with the US dollar but it had no result.

The ecosystem of Terra (LUNA) and TerraUSD (UST) a week ago had a capitalization greater than 50 billion dollars, today the LFG fund only has a balance of just over 80 million dollars.

The Foundation is looking to use its remaining assets to compensate remaining users of $UST, smallest holders first. We are still debating through various distribution methods, updates to follow soon. - @LFG_Org

At the time of writing, the UST stablecoin is trading at USD 0.06.

Disclaimer: The information provided in this section does not represent investment advice. Sources: Twitter, CoinMarketCap, Luna Foundation Guard

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Hello, I'm Veny West, a journalist in the crypto world. I deliver unbiased news with valuable information about the world of web3. ¡Pura Vida! ₿ **No financial advisor**

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