Avalanche Foundation to Repurchase 1.97M AVAX from LFG

The Avalanche Foundation has announced a significant agreement to repurchase 1.97 million AVAX tokens from the Luna Foundation Guard (LFG), a move aimed at strengthening the Avalanche ecosystem amidst ongoing bankruptcy proceedings for LFG. This repurchase, which is pending approval from the bankruptcy court, involves tokens that were originally sold to LFG in April 2022 as part of a $100 million deal intended to bolster the now-collapsed Terra ecosystem.

The value of these tokens has declined by approximately 44%, now estimated at $56 million, reflecting the tumultuous market conditions following the collapse of Terra's UST stablecoin and its associated token, Luna. By reclaiming these assets, the Avalanche Foundation aims to protect them from potential liquidation by LFG's bankruptcy trustee, ensuring compliance with original usage restrictions.

This strategic move not only safeguards the AVAX tokens but also enhances the Foundation's capacity to support various initiatives, including community grants and ecosystem development. The Avalanche Foundation has emphasized that this agreement aligns with its commitment to fostering stability and growth within its ecosystem, particularly in light of market instability linked to the previous collapse of Terra. The court's approval is anticipated soon, marking a pivotal moment for both organizations involved.