Avalanche has completed the repurchase of 1.97M AVAX tokens from LFG

Avalanche bought 1.97M AVAX tokens from the defunct Guardian of the Luna Foundation. The repurchase, valued at $53M, will strengthen Avalanche's ecosystem and long-term goals. The price of AVAX rose 4.0% last week, indicating strong market confidence.

In a significant step towards strengthening the ecosystem, the Avalanche Foundation has successfully purchased 1.97 million AVAX tokens from the now defunct Luna Foundation Trust (LFG).

This repurchase, valued at $53 million at current market value, marks the culmination of a strategic effort to support the Terra blockchain ecosystem with tokens acquired by LFG in 2022.

The tokens were initially purchased by LFG for $100 million, with the aim of establishing the Tera Tera USD (UST) stablecoin pegged to the US dollar.

Terraform Labs, the parent company of Terra Blockchain, has established LFG as a reserve to protect UST by storing both Bitcoin and other altcoins such as AVAX.

However, following the collapse of the Terra ecosystem in May 2022, as the UST lost its dollar currency, LUNA's value plummeted, and the once-promising strategy unraveled.

After this crisis, the Avalanche Foundation moved to negotiate an agreement to buy back 1.97 million AVAX tokens. By doing so, Avalanche ensured that LFG would not violate the original agreement with the Foundation, specifically regarding the use of tokens.

The buyback protects the tokens from bankruptcy proceedings, preventing them from being liquidated in court.

At the time of the repurchase, AVAX tokens were valued at $26.84 each, pushing the total value to $53 million, from the original purchase price of $45.5 million. This action demonstrates Avalanche's commitment to the long-term sustainability of the ecosystem.

Repurchased tokens support the initiative of the Avalanche ecosystem

The returned tokens will be used to support various initiatives within the Avalanche ecosystem, such as grants, events and incubators.

The strategic acquisition represents a critical step in strengthening the foundation's efforts to maintain AVAX's stability and encourage innovation and growth in the blockchain space.

By completing the buyback, Avalanche will not only mitigate the risks from a Terra collapse, but also confirm its position as a leading force in the blockchain industry.

AVAX token on strong bullish momentum

The token repurchase comes at a time when AVAX is experiencing high prices. At its current price of $26.84, AVAX continues to rise, reflecting investor confidence and the continued strength of the Avalanche ecosystem.

The token increased 4.0% in the last week and showed an impressive 108.8% increase in the last year.