Luna Foundation Guard, a non-profit, announced new measures that will keep UST (the flagship stablecoin in the Terra ecosystem), liquid in secondary market markets. Even though the protocol has exceeded the maximum issuance of UST per hour, demand is so strong that the foundation will need to spend more LUNA to maintain the supply in secondary markets.
Luna Foundation Guard Will Burn 4.2 MILLION LUNA to Support UST
Luna Foundation Guard, an organization that is dedicated to supporting Terra projects, decided to take action to boost UST supply in secondary markets. The best way to obtain UST (the Terra-pegged stablecoin), is to use LUNA from the protocol treasury. The increased demand for UST means that the highest possible amount of the stablecoin are not being released each day. Many investors have no access to the currency.
For investors to meet demand, they will have to look for secondary markets. The Luna Foundation Guard council was established. votedInstead, I would prefer to convert 4.2 Million LUNA into UST and sell it to Curve. Curve’s stablecoin pools are losing balance because of the high demand.
Anchor Attraction
It is the second attempt by the foundation to help restore balance to Curve pools. Recently, the foundation announced that they would burn 5,000,000 LUNA in order to issue UST to correct these imbalances.
The proceedings of that operation were used to buy bitcoin for the treasury, and the Luna Foundation Guard also decided to use funds from this latest operation to buy more bitcoin for the forex reserve used to support UST’s price in moments of market stress.
A large part of Terra’s attraction for investors seems to be Anchor, a protocol that lets its users earn interest of almost 20% on the UST deposited. Anchor had almost 10 million UST of deposits as at this writing. This action has also benefited LUNA (the Terra protocol’s stabilizing token). According to Coingecko data, LUNA now stands at nearly $100 with a more than 50% increase in value over the past 30 days.
What do you think about the movements of the LFG to balance UST’s secondary markets? Leave a comment below.
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