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2/ First, *LFG is not trying to exit its bitcoin position*. The goal is to have this capital in the hands of a professional market maker such that: 1) Buy UST if price < peg 2) Buy BTC if price >= peg thus significantly strengthening the liquidity around UST peg

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3/ While buys and sells of UST are not meaningfully directional now, we felt it was valuable to have capital ready to be deployed in the current market. As markets recover, we plan to have the loan redeemed to us in BTC, increasing the size of our total reserves.

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Discuss, organize, and grow decentralized communities

4/ We had hoped that the onchain bitcoin reserve system would be live by the time the Terra economy would contract, thereby obviating the need for LFG discretionary intervention Spec here:

agora.terra.money

Commonwealth

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5/ While this did not happen, allowing BTC to be redeemed against US on an onchain dex, we are just a few weeks away from a testnet launch developed by the

@astroport_fi

team. Until then, the LFG council decided to err on the side of caution.

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5:17 AM · May 9, 2022Twitter Web App

6/ The LFG council currently consists of

and myself, and we made this decision via an unanimous vote of the council.

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7/ This will be an important opportunity for the terra and wider crypto community to gather empirical data on how LFG operates & fits into the Terra ecosystem. Observe over the next few days not on whether LFG chose to deploy reserves, but on how.

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8/ I'll be hanging around this thread to answer any questions people may have.

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Centralized governance…. Decisions in the hands of a few.

Frederick Fungᵍᵐ

@clionly