cryptojournalist
The Avalanche Foundation has repurchased almost 2 million AVAX tokens from Terra’s Luna Foundation Guard (LFG) for about $53 million. These tokens were originally bought by LFG in 2022 to support Terra’s UST stablecoin, but things went south after Terra’s major crash.
Why Terra’s LFG Bought AVAX in the First Place
In 2022, Do Kwon, the founder of Terra, set up LFG to protect the stability of Terra’s UST stablecoin. LFG bought $100 million worth of AVAX, along with Bitcoin and other assets, to help UST keep its value. But soon after, UST lost its dollar peg, which led to a huge drop in Terra’s value and ultimately its collapse.
Why Avalanche Decided to Buy Back the Tokens
The Avalanche Foundation wanted to bring these tokens back under its control to make sure they’re used responsibly. Buying them back also keeps the tokens out of any legal or bankruptcy issues that LFG might face. Avalanche now plans to use the tokens to strengthen its own ecosystem through community grants, events, and projects that support the Avalanche network.
