> And so the LFG bought a bunch of Bitcoin and promised to use it to defend Terra’s peg to the dollar. If one Terra goes down to $0.90, instead of turning Terra

> And so the LFG bought a bunch of Bitcoin and promised to use it to defend Terra’s peg to the dollar. If one Terra goes down to $0.90, instead of turning Terra into Luna and selling them in a death spiral, the LFG can buy Terra for $0.90 and pay for it in Bitcoin. If the LFG has enough Bitcoin, and if Bitcoin’s price holds up, then it can defend the peg and keep the price of Terra close to $1. So they've basically re-invented fractional reserve banking, with Terra/Luna taking the place of bank notes in old-timey banking, and BTC being the gold bars sitting in bank vaults, in this metaphor.