Terra bought up more than $3 billion of the digital currency in order to back its failed stable coin. They have got their answer.
Luna Foundation Guard, a fund set up by Terra creator Do Kwon, said Monday it spent almost all of the digital currency in its reserve last week in a futile attempt to save terraUSD.
Last week, the foundation had accumulated more than 80,000 bitcoins, which was worth over $3 billion. In the event of a dramatic fall in the value of UST, Kwon had promised to use the bitcoin.
Luna Foundation Guard said in a series of posts that it transferred 52,189 bitcoins to a counterparty as UST fell below its intended $1 peg. The foundation said that Terra sold 33,206 of the virtual currency in a last ditch effort to defend the peg.
The Luna Foundation Guard had just over $9 million left in its reserve. The remainder of the firm's assets will be used to compensate remaining users of UST.
Luna Foundation Guard said that they are debating through various distribution methods.
UST is a stable coin. UST relied on a mix of code and a floating token called luna to balance supply and demand and keep the price stable.
When UST began to drop below $1 last week, luna also began to sell off, causing UST to plunge to less than 30 while luna became worthless. The UST is worth just 9 cents.
The collapse of Terra's token wiped out more than $200 billion of wealth in a single day. The price of bitcoin fell to its lowest level in over a year.
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