What Is the Luna Foundation Guard (LFG)?

The Luna Foundation Guard is a non-profit organization founded in 2017 with the mission to safeguard the blockchain and cryptocurrency industry, particularly within the Terra ecosystem. The foundation supports a large, global security market and uses cutting-edge blockchain technology to enhance protection for cryptocurrencies. Its main objectives are to promote Initial Coin Offerings (ICOs) and to protect investors from fraud and theft.

Terraform Labs (TFL)

Do Kwon, Co-Founder and CEO of Terraform Labs, is determined to achieve his ambitious $10 billion goal. With recent successful transactions, he hopes to reach this target by the end of Q3.

Along with the latest acquisition, Terra also purchased 2,500 BTC in mid-April, valued at around $1 million, and donated $1.1 billion worth of LUNA to the Luna Foundation Guard for burning and minting more Terra USD (UST). This is in addition to the $200 million Terra and LFG invested in AVAX tokens. Terraform Labs swapped its LUNA, and LFG made an over-the-counter (OTC) purchase using its Stablecoin, strengthening its partnership with the Avalanche Foundation as a second Layer-1 token.

This week, the Luna Foundation conducted a $1 billion OTC transaction facilitated by Genesis, a leading prime broker. The unprecedented deal involved swapping $1 billion worth of UST for $1 billion worth of Bitcoin (BTC). Additionally, they purchased $500 million worth of BTC from Three Arrows Capital, a well-known cryptocurrency hedge fund.

“For the first time, we’re seeing a pegged currency that’s aligning itself with the Bitcoin standard, making a significant bet that holding substantial foreign reserves in a native digital currency will prove successful,” said Do Kwon, who remains optimistic about the future of cryptocurrency. This purchase raises the question: should we consider Bitcoin to be undervalued now, making it a potential investment opportunity? Bloomberg notes that Do Kwon is currently one of the most closely watched crypto whales, having spent $1.5 million on BTC and planning further acquisitions.

Terra’s strategic Bitcoin acquisitions have greatly bolstered its UST reserves, now amounting to about $3.5 billion, securing its position among the top 10 BTC holders. Moving forward, the Luna Foundation Guard plans to use $1.4 billion to purchase additional BTC, with the Terra protocol helping to secure the remaining $7 billion in Bitcoin through its users. This move strengthens UST’s prominence as users are required to add Bitcoin to the reserve to mint UST, further solidifying the Stablecoin’s role in the cryptocurrency ecosystem.

Genesis Trading

The Genesis Block, the first-ever block of Bitcoin mined in 2009 by Satoshi Nakamoto, serves as the foundational block of the Bitcoin trading network we know today. It’s also a fitting name for the well-established trading company now collaborating with the Luna Foundation Guard.

By facilitating this transaction with the Luna Foundation Guard, Genesis is increasing its reserves in Luna and UST, using them to engage with borrowing counterparties seeking access to the crypto market in a risk-neutral manner.

Additionally, this partnership allows Genesis to distribute some of Terra’s assets to counterparties who may find it difficult to accept these assets on an exchange. “Terra’s remarkable growth has continuously reshaped the crypto market over the past two years. Genesis is excited to serve as a liquidity partner for the Terra ecosystem, connecting it with a broader audience of institutional market participants,” said Joshua Lim, head of derivatives at Genesis.