- According to the company, the Avalanche Foundation has negotiated an agreement to repurchase around 2 million tokens that were sold to the Luna Foundation Guard, a group that maintained the now-collapsed Terra environment, in an April 2022 deal for $100 million, subject to court clearance.
- The deal’s financials were not made public, although the tokens’ full value is currently above $55 million.
To strengthen its reserves, the Singapore-based nonprofit Luna Foundation Guard, which had been supporting the since-collapsed Terra ecosystem with its stablecoin UST and token LUNA, acquired $100 million worth of Avalanche’s tokens in April 2022.
However, the future of the AVAX tokens it holds is uncertain due to the collapse of the Terra ecosystem in May 2022. The Avalanche Foundation has now declared that it has reached an agreement to buy back the 1.97 million tokens from the estate of the bankrupt Terraform Labs.
According to the Avalanche Foundation’s announcement post on X, this action guarantees that LFG will not go beyond the terms of the original agreement regarding the tokens’ use and protects the tokens from the intricacies of a bankruptcy trustee liquidation.
Although the Foundation did not disclose the financial details of the agreement in its release, the 1.97 million Avalanche tokens currently in circulation are worth roughly $56 million at list price, which represents a 44% drop from the stash’s initial $100 million value.
The release states that the arrangement will take effect subject to permission from the bankruptcy court overseeing the estate of Terraform Labs. After Terraform Labs’ lawsuit with the SEC was settled, a bankruptcy judge authorized the company’s decision to shut down in September.
The announcement and increasing popularity of the new video game Off The Grid, which features an in-game economy built on an Avalanche Subnet, have caused the price of Avalanche’s token, which was as low as $25.16 on October 10, to rise by over 13% to about $28.50.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
