Luna Foundation Guard (LFG) will commit $1.5 billion in bitcoin and TerraUSD (UST) to protect the US dollar peg of its algorithmic steblecoin.
LFG will provide $750 million in bitcoin to merchants to help protect the steiblocoin peg, as well as a $750 million loan to UST to accumulate bitcoin to help normalize the market.
Founder Do Kwon said the $750 million bitcoin loan move should not be seen as an attempt by LFG to get out of its bitcoin position, but rather as an increase in liquidity for UST.
Over the weekend, UST briefly lost its peg to the U.S. dollar due to the massive withdrawal of Stablecoin from liquidity pools.