CJ - Cryptocurrency Enthusiast
A third-party audit revealed that TerraForm Labs (TFL) and Luna Foundation Guard (LFG) spent around $3.4 billion trying to protect the UST peg. The LFG is in charge of the UST algorithmic stablecoin and released a technical audit in May to ensure total transparency of crypto assets and TerraUSD re-peg operations (UST). LFG intends to answer all accusations with the audit.
According to JS Held's independent audit, the LFG spent $2.8 billion (80,081,000,000) LFG tweeted on May 16 that they will use (Bitcoin investment and $49.8 million in stablecoins) to safeguard the UST peg. A further $613 million of Terraform Labs' money were used to safeguard the peg of its algorithmic stablecoin crypto asset, according to the audit.
The $60 billion ecosystem came to an end when the value of UST neared zero, notwithstanding some advances made by LFG and TFL. As a result of the meltdown, several lenders, brokers, and exchanges exposed to the crypto market investment ecosystem filed for bankruptcy.
In order to boost openness in their peg defense campaign, LFG and TFL engaged JS Held in May 2022. According to the analysis, Do Kwon, a co-founder of Terraform Labs, did not steal money from LFG after UST declared bankruptcy, contrary to what is often believed. The audit also reveals that neither the Terra team nor the authorities ever took any LFG funding.
Contrary to common assumption, Do Kwon, the controversial developer of TFL, believes that Terra's decline is not comparable to "recent failures in crypto," alluding to the recent collapse of FTX cryptocurrency exchange. The executive, who received Interpol's red alert, said that whereas centralized custodial systems stole user money, TFL and LFG did all in their ability to prevent that result.
"Terra was not a centralized platform destroyed by financial mismanagement or fraud - it was one of the biggest layer 1 blockchains, with two native assets in the CMC top 10," Kwon said in a tweet posted shortly after the Audit report was made public. It will take more than rage and blanket bans of comparable protocols to figure out how to stop future failures similar to it.
The amount of Terra tokens, especially LUNA, LUNC, and USTC, increased quickly after the audit report was published.