Luna Foundation Guard (LFG), a nonprofit organization, has promised to compensate TerraUSD (UST) holders.
LFG will use the remaining assets in the reserve to compensate UST holders. Compensation will primarily go to people who hold small amounts of coins. We’re still discussing ways to distribute the money and will have an update soon,” LFG said.
The organization said it has bitcoins, Binance Coin (BNB), Avalanche (AVAX), UST and Terra (LUNA) totaling $23.2 million in reserves at current exchange rates. LFG will transfer the 221 million blocked LUNA coins to its crypto vault in 20 days.
LFG’s digital assets in reserve
On May 7, the UST rate dipped below $1. To stabilize the value of the stabelcoin, LFG began converting its reserves into TerraUSD on May 8. The organization exchanged Tether (USDT), USD Coin (USDC) and bitcoins for 1.6 billion UST. However, the price of TerraUSD continued to fall and hit a low of $0.09466 on May 16.
Now there are 11.28 billion UST worth $1.4 billion in circulation, so it is obvious that LFG reserves are not enough to compensate all cryptocurrency holders.