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The Avalanche Foundation has acquired 1.97 million AVAX tokens from LFG

The Avalanche Foundation has completed the purchase of 1.97 million AVAX tokens from Luna Foundation Guard (LFG), which had previously purchased the tokens to support the Terra blockchain ecosystem.

According to the announcement, the Avalanche Foundation will buy back the tokens for $45.5 million. However, at the time of writing, the AVAX token price was $26.95, so the total 1.97 million tokens are valued at around $53 million.

In 2022, Terraform Labs founder Do Kwon founded LFG to secure the TerraUSD (UST) stablecoin. At that time, LFG purchased $100 million of AVAX tokens to stabilize UST, which was then worth $16.7 billion. In addition, Terraform Labs also exchanged $100 million of Terra (LUNA) tokens for AVAX to “strategically link ecosystems.”

However, Terra collapsed shortly thereafter. In May 2022, UST lost its peg to the dollar, leading to a sharp decline in LUNA’s price and the complete collapse of the Terra ecosystem.

The Avalanche Foundation said the buyback of these 1.97 million tokens was a “critical step” in its efforts to ensure the sustainability of the Avalanche ecosystem. These tokens will be used to power initiatives such as grants, events, and incubation.

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