BCGAME - Free 5BTC Daily Bonus!- Buyback strengthens Avalanche ecosystem
- AVAX appreciates after strategic buyback
- AVAX buyback protects foundation from litigation
In a pivotal move for its ecosystem, the Avalanche Foundation has completed the buyback of 1,97 million AVAX tokens from the defunct Luna Foundation Guard (LFG), marking an important chapter in the recovery and stability of its blockchain ecosystem. The transaction, which was valued at around $53 million at current market prices, was a move to recover the tokens that LFG had acquired in 2022 to support the Terra blockchain.
AVAX tokens were originally purchased by LFG for $100 million to stabilize Terra’s US dollar-pegged stablecoin TerraUSD (UST). Terraform Labs, the developer of the Terra blockchain, created LFG as a reserve fund to protect UST by staking Bitcoin and other altcoins, including AVAX.
However, the collapse of the Terra ecosystem in May 2022, precipitated by the de-pegging of UST to the dollar, resulted in a sharp drop in the value of LUNA, and the project that initially showed promise collapsed. Following the crisis, Avalanche began negotiations to buy back the 1,97 million AVAX tokens, ensuring that LFG would fulfill the original agreement made with the Foundation, especially regarding the use of the tokens.
This buyback not only protects the tokens from potential bankruptcy litigation by preventing them from being liquidated in court, but also raises the value of the tokens to $53 million, up from the original purchase price of $45,5 million. This move underscores Avalanche’s commitment to the long-term sustainability of its ecosystem.
The recovered tokens will be used to support various initiatives in the Avalanche ecosystem, including grants, events, and incubators, representing an essential step in maintaining the stability of AVAX and strengthening the foundation’s efforts to promote innovation and growth in the blockchain space.
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