Avalanche is a smart-contract blockchain that was announced in a tweet that Luna Foundation Guard (LFG) – the entity behind the reserve fund set up to backstop the Terra blockchain’s now-failed UST stablecoin – has “disclosed no plans” for the 2 million AVAX tokens currently sitting in its treasury.
According to the tweet, “Given Terra’s proposed Terra chain fork,” LFG stated that it had no plans to use AVAX. “Should any sales be contemplated for the LFG reserves, the Avalanche Foundation is ready to work with LFG on a sensible trading strategy.”
With the token’s price fluctuating at $30 per token, the market value of the AVAX stash is about $60 million, making it the second-largest holding in LFG’s dwindling $240 million treasury.
Crypto traders have speculated on what the plans were for the AVAX tokens – and what the market impact might be from any sales.
The announcement comes as entities with strong ties to the Terra ecosystem, including the $8 billion layer 1 blockchain Avalanche, are facing demands for transparency from the community as they reckon with the market events of last week.
Avalanche further revealed that Terra Blockchain Developer Terraform Labs (TFL), which is a Terra blockchain developer, also holds 1.1million AVAX tokens. tweet.
TFL’s tokens are subject to a one-year lock up, according to the tweet.
The AVAX tokens held by TFL and LFG represented 0.5% and 0.9% of the token’s weekly volume, according to Avalanche.
According to the tweet, “The AVAX currently is immobilized.”
CoinDesk reported in April that the Luna Foundation Guard and Terraform Labs – both organizations supporting the Terra blockchain – announced they had collectively acquired $200 million worth of Avalanche’s AVAX tokens from the Avalanche Foundation.
As of Thursday afternoon, LUNA was trading at less than 1 cent and UST at 8 cents, marking a dramatic decline in the tokens’ value. The status of Terra-related tokens at the Avalanche Foundation were not mentioned in the tweet on Thursday.