The Avalanche Foundation recently announced the successful acquisition of 1.97 million AVAX tokens from the Luna Foundation Guard (LFG), marking a watershed milestone in the organization’s continuous efforts to improve the Avalanche ecosystem. LFG initially purchased these tokens for $100 million in 2022 to support TerraUSD, the Terra blockchain’s stablecoin, and they are presently worth around $53 million.
The Avalanche Foundation’s move to reclaim these tokens demonstrates its proactive approach to ensuring the integrity of the AVAX asset. This buyback not only avoids potential issues, such as asset liquidation in bankruptcy proceedings, but it also assures that the tokens are used in accordance with the original arrangement.
Following the collapse of the Terra ecosystem in May 2022, when TerraUSD lost its peg to the dollar, causing a dramatic drop in the value of Terra (LUNA) and a broader crisis within the Terra ecosystem, many view Avalanche’s plan as a precautionary measure. This strategic repurchase allows the Avalanche Foundation to reclaim control of these assets and protect them from future third-party claims.
We will now use the AVAX tokens to fund projects that expand Avalanche’s ecosystem, including grant funding, community events, and incubator programs that promote blockchain innovation. By retrieving the tokens, the foundation hopes to strengthen AVAX’s stability and promote future improvements in its blockchain network.
This move comes at a favorable time for AVAX, which has seen an increase in market confidence. The token has steadily grown, demonstrating investor confidence and the power of Avalanche’s ecosystem.
