Cost of Failed UST Peg Defense: $2.9 Billion in Reserves Spent

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The cost of the failed attempt to prop up the TerraUSD stablecoin is coming into sharper focus.

The Luna Foundation Guard, the nonprofit set up by Terraform Labs to maintain TerraUSD's peg to the dollar, burned through nearly $3 billion in cryptocurrencies since May 7, trying to keep the token stable.

LFG held 80,394 Bitcoins as of that day, before TerraUSD started dropping from its peg. The value of the Bitcoins was based on the closing price on May 7. LFG said it now has 313 Bitcoins, worth $9.3 million.

LFG sold off holdings of the stable coins in order to bring UST back to its dollar peg. UST is trading at a low price. LFG did not reply to an email seeking comment.

On May 7, LFG's reserves stood at almost $3.2 billion. LFG said that the remaining reserves will be used to compensate UST holders with the smallest ones first in line.

This is how the terra stable coin collapsed.