Avalanche Foundation Completes Acquisition of 1.97M AVAX From LFG
Key Points:
- The Avalanche Foundation has completed the repurchase of 1.97 million AVAX tokens from the Luna Foundation Guard, ending its association with the collapsed Terra blockchain.
- Originally sold to support Terra’s UST stablecoin reserve, these AVAX tokens are now valued at around $52 million and will not enter the market.
According to The Block, the Avalanche Foundation has officially cut ties with the now-defunct Terra blockchain, closing chapters on more than two years of partnership.
Read more: Avalanche Grant Program Launched to Boost Developers With $40MÂ
Avalanche Foundation Cuts Ties with Collapsed Terra Blockchain
In a recent statement, the foundation announced that it had purchased tokens from the Luna Foundation Guard (LFG), an entity created by Terraform Labs’ founder, Do Kwon. The LFG had been established to help stabilize Terra’s algorithmic stablecoin, TerraUSD (UST), which would go on to fail in its purpose.
In April 2022, the Avalanche Foundation sold 1.97 million AVAX tokens to LFG, supporting Kwon’s plan to build a crypto reserve for the UST model in an attempt to keep its dollar peg via a mechanism involving UST and LUNA.
At the time, valuations put the AVAX tokens at as high as $200 million, though but a fraction of more than $3 billion held in assets by LFG. Another way the LFG was implementing its strategy was through the purchase of Bitcoin and other crypto assets to underpin UST stability.
However, in May 2022, the Terra ecosystem totally collapsed, forcing LFG to liquidate up to $3 billion worth of Bitcoin in a week’s time to try and restore stability to the UST. Later, Avalanche tried to buy back its AVAX tokens to deter possible market disruptions. The process would encounter delays occasioned by various procedural hitches.
AVAX Token Buyback Shields Avalanche Ecosystem from Market Impact
Now, with court approval, Avalanche Foundation has finalized the buyback of 1.97 million AVAX tokens worth around $52 million. This ensures that the tokens are not dumped into the open market and thus shields the Avalanche ecosystem from any negative influence.
In June 2024, Kwon and Terraform Labs reached a settlement over civil charges with the U.S. Securities and Exchange Commission over $4.47 billion for being found liable for defrauding investors.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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Avalanche Foundation Completes Acquisition of 1.97M AVAX From LFG
Key Points:
- The Avalanche Foundation has completed the repurchase of 1.97 million AVAX tokens from the Luna Foundation Guard, ending its association with the collapsed Terra blockchain.
- Originally sold to support Terra’s UST stablecoin reserve, these AVAX tokens are now valued at around $52 million and will not enter the market.
According to The Block, the Avalanche Foundation has officially cut ties with the now-defunct Terra blockchain, closing chapters on more than two years of partnership.
Read more: Avalanche Grant Program Launched to Boost Developers With $40MÂ
Avalanche Foundation Cuts Ties with Collapsed Terra Blockchain
In a recent statement, the foundation announced that it had purchased tokens from the Luna Foundation Guard (LFG), an entity created by Terraform Labs’ founder, Do Kwon. The LFG had been established to help stabilize Terra’s algorithmic stablecoin, TerraUSD (UST), which would go on to fail in its purpose.
In April 2022, the Avalanche Foundation sold 1.97 million AVAX tokens to LFG, supporting Kwon’s plan to build a crypto reserve for the UST model in an attempt to keep its dollar peg via a mechanism involving UST and LUNA.
At the time, valuations put the AVAX tokens at as high as $200 million, though but a fraction of more than $3 billion held in assets by LFG. Another way the LFG was implementing its strategy was through the purchase of Bitcoin and other crypto assets to underpin UST stability.
However, in May 2022, the Terra ecosystem totally collapsed, forcing LFG to liquidate up to $3 billion worth of Bitcoin in a week’s time to try and restore stability to the UST. Later, Avalanche tried to buy back its AVAX tokens to deter possible market disruptions. The process would encounter delays occasioned by various procedural hitches.
AVAX Token Buyback Shields Avalanche Ecosystem from Market Impact
Now, with court approval, Avalanche Foundation has finalized the buyback of 1.97 million AVAX tokens worth around $52 million. This ensures that the tokens are not dumped into the open market and thus shields the Avalanche ecosystem from any negative influence.
In June 2024, Kwon and Terraform Labs reached a settlement over civil charges with the U.S. Securities and Exchange Commission over $4.47 billion for being found liable for defrauding investors.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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