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Terra Backers Buy $200M in AVAX Tokens, Bolstering Crypto Reserves Beyond BTC
The Luna Foundation Guard bought $100 million in AVAX with UST stablecoins. Terraform Labs swapped an additional $100 million in LUNA for the same value in AVAX.
By Tracy Wang
Updated May 11, 2023, 5:31 p.m. Published Apr 7, 2022, 6:00 p.m.
The Luna Foundation Guard (LFG) and Terraform Labs (TFL), both organizations supporting the Terra blockchain, announced they had collectively acquired $200 million worth of Avalanche’s AVAX tokens from the Avalanche Foundation.
LFG purchased $100 million worth of AVAX tokens using its UST stablecoin in an over-the-counter (OTC) trade with the Avalanche Foundation, according to a spokesperson from Ava Labs.
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Additionally, TFL, the company supporting development of the Terra blockchain, has executed a $100 million LUNA to AVAX token swap to “strategically align ecosystem incentives,” according to a Terra tweet.
The Avalanche Foundation now holds $100 million worth of UST and $100 million worth of LUNA after the two deals.
LFG beyond just BTC
LFG has been on a crypto buying spree of late, adding over $1.6 billion of bitcoin to its treasury reserves to back Terra’s UST stablecoin. Last month, Terra co-founder Do Kwon pledged LFG would purchase up to $10 billion worth of bitcoin for its treasury.
The Avalanche partnership marks the second layer 1 token LFG has added to its treasury.
“AVAX is an excellent reserve asset to complement bitcoin [BTC] in the LFG treasury,” Ava Labs President Jon Wu told CoinDesk via Telegram. “This is just the beginning for these two communities together. We’ll see more assets, applications, and novel subnet collaborations flourish out of this new connection.”
The news, announced midday Thursday, sent the price of AVAX up from $84 to $87 per coin, a gain of about 4% as of press time.
LUNA, the native token of Terra, was changing hands at $104.32, per CoinGecko data.
Terra also announced that it would be collaborating with Avalanche on a new gaming subnet with details to be released “at a later time.”
Avalanche founder Emin Gün Sirer tweeted that he was expecting more native Terra applications to expand onto Avalanche as a result of the partnership.
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