New York, Friday, October 18, 2024 –The Avalanche Foundation has announced plans to repurchase nearly 2 million tokens originally sold to Luna Foundation Guard (LFG) in a 2022 deal.
The tokens, currently valued at over $55 million, are set to be bought back, pending court approval. This follows the collapse of Terra’s ecosystem in May 2022, which cast uncertainty over the AVAX tokens held by LFG.
In April 2022, LFG, a nonprofit based in Singapore, acquired $100 million worth of AVAX tokens to support Terra’s UST stablecoin reserves. However, with Terra’s failure, the future of those tokens became unclear. The Avalanche Foundation’s repurchase deal aims to protect the tokens from liquidation by a bankruptcy trustee and prevent any violation of the original agreement’s terms.
While the financial details of the repurchase remain undisclosed, the 1.97 million tokens now hold a 44% lower value compared to the original $100 million purchase price. The court overseeing Terraform Labs’ bankruptcy must still approve the deal.
The news has impacted AVAX prices positively. Following the announcement and the growing popularity of the Avalanche-based video game “Off The Grid,” AVAX’s price rose over 13%, from $25.16 to about $28.50. This marks a significant uptick in market confidence amid a turbulent crypto environment.
Pending final approval, the repurchase solidifies Avalanche’s commitment to safeguarding its token supply and stabilizing its value post-Terra collapse.
