- Avalanche has repurchased 1.97 million AVAX tokens from the now-defunct Luna Foundation Guard.
- The buyback, valued at $53 million, strengthens the Avalanche ecosystem and supports its long-term objectives.
- AVAX price rose 4.0% over the past week, reflecting strong market confidence.
In a strategic move to reinforce its ecosystem, the Avalanche Foundation has completed the repurchase of 1.97 million AVAX tokens from the defunct Luna Foundation Guard (LFG).
Estimated at roughly $53 million based on current market prices, the buyback closes a deliberate effort to recover tokens that LFG originally acquired in 2022 to support Terra’s blockchain ecosystem.
LFG initially purchased the tokens for $100 million with the aim of stabilizing Terra’s TerraUSD (UST) stablecoin, which was pegged to the U.S. dollar.
Terraform Labs, the company behind the Terra blockchain, had established LFG as a reserve intended to protect UST by accumulating both Bitcoin and other altcoins like AVAX.
However, following the collapse of Terra’s ecosystem in May 2022—triggered by UST losing its dollar peg—LUNA’s value plunged and the once-promising strategy unraveled.
After that crisis, the Avalanche Foundation entered negotiations to repurchase the 1.97 million AVAX tokens. By doing so, Avalanche ensured that LFG would not violate its original agreement with the Foundation, particularly regarding token usage.
The buyback also shields those tokens from potential bankruptcy proceedings, preventing them from being liquidated through court processes. At the time of the repurchase, AVAX was priced at $26.84 per token, bringing the total value to $53 million, compared with the original purchase price of $45.5 million.
This action underscores Avalanche’s commitment to the long-term sustainability of its ecosystem.
Repurchased tokens will support Avalanche ecosystem initiatives
The recovered tokens will be deployed to support a range of initiatives across the Avalanche ecosystem, including grants, events, and incubator programs.
This strategic buyback represents a key step in maintaining AVAX stability and bolstering the foundation’s efforts to drive innovation and growth in the blockchain space.
By completing the repurchase, Avalanche not only reduces exposure to risks stemming from Terra’s collapse but also reaffirms its position as a leading force in the blockchain industry.
AVAX token is on a strong upward trend
The token repurchase comes as AVAX is gaining value. With a price of $26.84 at the time of reporting, AVAX has steadily built momentum, reflecting growing investor confidence and continued ecosystem strength.
AVAX has risen 4.0% over the past week and has posted a significant annual gain of 108.8% over the last year.