- Avalanche purchased again 1.97 million AVAX tokens from the defunct Luna Basis Guard.
- The $53 million buyback strengthens Avalanche's ecosystem and long-term objectives.
- AVAX value is up 4.0% over the previous week, reflecting robust market confidence.
In a serious transfer to strengthen its ecosystem, the Avalanche Basis has efficiently purchased again 1.97 million AVAX tokens from the now-defunct Luna Basis Guard (LFG).
This buyback, valued at roughly $53 million based mostly on present market costs, marks the conclusion of a strategic effort to reclaim tokens initially acquired by LFG in 2022 to help the Terra blockchain ecosystem.
The tokens had been initially bought by LFG for $100 million to stabilize TerraUSD (UST), the Terra stablecoin, which was pegged to the US greenback.
Terraform Labs, the dad or mum firm of the Terra blockchain, established LFG as a reserve to guard UST by hoarding Bitcoin and different altcoins reminiscent of AVAX.
Nevertheless, following the collapse of the Terra ecosystem in Could 2022, triggered by the lack of the greenback peg by UST, the worth of LUNA plummeted and the once-promising technique fell aside.
Following this disaster, the Avalanche Basis determined to barter an settlement to purchase again 1.97 million AVAX tokens. By doing this, Avalanche ensured that LFG wouldn’t violate its authentic settlement with the muse, particularly concerning the usage of tokens.
The buyback additionally protects the tokens from potential chapter proceedings and protects them from judicial liquidation.
On the time of the buyback, AVAX tokens had been valued at $26.84 every, bringing the whole worth to $53 million, up from the unique buy value of $45.5 million. This occasion highlights Avalanche's dedication to the long-term sustainability of its ecosystem.
Redeemed tokens will help Avalanche ecosystem initiatives
The reclaimed tokens will likely be used to help numerous initiatives inside the Avalanche ecosystem, reminiscent of grants, occasions and incubators.
The strategic buyout represents a vital step to take care of AVAX's stability and strengthen the muse's efforts to drive innovation and development within the blockchain area.
By finishing the buyback, Avalanche not solely mitigates the dangers of a Terra collapse, but additionally reaffirms its place as a number one drive within the blockchain trade.
AVAX token on robust upward momentum
The token buyback comes at a time when AVAX is experiencing a surge in worth. With a present value of $26.84, AVAX continues to realize momentum, reflecting rising investor confidence and the continued power of the Avalanche ecosystem.
The token has gained 4.0% over the previous week and has seen a outstanding 108.8% enhance over the previous yr.
