When I was a kid, my father tried to use a broom handle in a last ditch effort to support a roof that was collapsing from the weight of nearly three feet of snow. You can guess how well it went. According to a report, TerraBlockchain spent $3.5 billion to keep the roof from collapsing. We know how much it cost to fix the faulty broom handle.
The nonprofit Luna Foundation Guard, which oversees and supports the TerraUSD stablecoin and its native coin Luna, said in a statement Monday that it had over 80,000 different coins in its wallet on May 7. If Terra ever dropped below $1, the reserve was built to support it. The LFG lent and traded thousands of reserve coins to keep the peg in its stable coin after TerraUSD started to fall.
The TerraUSD system is tied to a currency to provide financial security. One TerraUSD was equivalent to $1, but unlike other stable coins, Terra was not backed with assets, and it worked with its sister coin Luna to maintain the price of the currency. Terra began to fall around the weekend of May 8, which caused people to sell off their Luna in droves, creating a death spiral for both token. TerraUSD is being traded for 9 cents on the dollar.
After the rush to trade its reserves last week, the LFG said it is left with just 313 bitcoins. It has 222,700,000 Luna coins in its reserves as well, and the majority of them are staked with a proof of stake model. The Luna should be returned to stakers within 20 days.
The foundation had gone from $3.1 billion in reserves to just $87 million, according to researchers at The Block. Users of TerraUSD will be compensated with their remaining token first, according to the foundation.
G/O Media may get a commission
Next-Level Sound can be experienced.
Theater-like sound surrounds you with spatial audio with dynamic head tracking.
All Rights Reserved © 2024
