While foundation has not announced the sale, there is no other way to support UST stablecoin
Luna Foundation Guard responsible for the stability of the UST stablecoin powered by Terra and its leader Do Kwon announcement a “loan” to market makers designed to defend the peg of the stablecoin.
While Do Kwon has not specifically mentioned what will happen with the provided funds, it is more likely that the “lend” to market makers looks more like a massive sell order. The foundation will use the proceeds from buying back the UST that lost its peg for a moment on the weekend.
Members of the Terra community have expressed their frustration with the situation that has emerged around the stablecoin. LFG has traded $1.5 billion of its total Bitcoin holdings, which is essentially more than half of total collateral at the market low, requiring no additional selling pressure.
Other users accused Do Kwon of a lack of transparency while deciding to affect all UST holders and demand more information and further explanation. But the co-founder of Terra argued that during situations like witnessed yesterday, speed is the key, and he decided based on the interest of the foundation and UST holders.
Following the market turmoil and the rapid fall of BTC, panic in the cryptocurrency market emerged, causing a massive outflow of liquidity from the UST stablecoin, which then led to the depeg, and the price of the stablecoin plunged into below $1.
On May 8, Bitcoin plunged to $33,563, which was expected by most Bitcoin bears like Peter Schiff, who expects the aggravation of market turmoil if the first cryptocurrency somehow plunges below $35,000.
