Terra finally outlines reserve HODLings and is ‘looking to’ compensate UST users

Lavina Daryanani
Source: Daily Express

The wait is, perhaps, over. Unanswered questions now have firm answers, and the room for further speculation has been wiped out. Yes, the Luna Foundation Guard just released a thread outlining how exactly did it deploy its funds during the UST de-pegging phase.

Terra starts from square one

As of 7 May, the Foundation’s reserved consisted of the following assets:

Source: Twitter

On Sunday, 8 May, when the price of the UST started deviating from its $1 peg, the Foundation began converting its reserve to UST. The Foundation did so by directly executing on-chain swaps and transferring Bitcoin to a counter-party to enable them to enter into large-size, short-notice trades with it.

Per LFG, it

· Directly sold 26,281,671 USDT & 23,555,590 USDC for an aggregate 50,200,071 UST

. Transferred 52,189 BTC to trade with a counter-party, net of an excess of 5,313 BTC that they have returned, for an aggregate of 1,515,689,462 UST

Then, on 10 May, when UST had dipped into the $0.7 range, by a Master Services Agreement dated January 10, 2022, the TFL—on behalf of the Foundation—sold 33,206 BTC for an aggregate 1,164,018,521 UST “in a last-ditch effort to defend the peg.”

Post that, on May 12, LFG swapped 883,525,674 UST to 221,021,746 LUNA and “staked” this across a range of validators to shield it against a possible governance attack.

Currently, the Foundation’s reserves contain:

Source: Twitter

Reimbursement on the cards?

Well, per the announcement in the thread, the Foundation is looking to use its remaining assets to compensate the remaining users of UST and would prioritize the smallest HODLers first. At this stage, nonetheless, the team is debating upon the distribution methods, and would soon update HODLers when something is zeroed-down upon.

Also, the Foundation went on to add that all assets would “shortly” be returned to wallets tagged in its reserves.

People from the space, including Ethereum’s founder Buterin, had dropped their suggestions recently w.r.t. how Terra could relieve its small investors by using funds from its reserves. So now, with the same being proposed by the LFG, looks like UST HODLers can finally take a breather.