Is Terra Planning To Sell Its $92 Million Stake In Avalanche (AVAX)?

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Last Updated on May 20, 2022 by Bitfinsider

Terraform Labs and the Luna Foundation Guard (LFG) owned $92 million worth of AVAX tokens, according to Avalanche.

The blockchain stated that it does not believe Terra would sell its token holdings, but it is eager to support with any AVAX sales.

The holdings constitute a small portion of overall AVAX supply, but if dumped, it might trigger market instability. According to Avalanche, the LFG has roughly 1.97 million tokens, whereas Terraform Labs has about 1.07 million.

Many investors are unsure about Terra Luna’s prospects after its collapse. Terra’s CEO, Do Kwon, has offered several initiatives to resurrect the chain.

Terra now has about 3 million AVAX tokens

As a result of the community’s constant inquires, the team notified the AVAX community that they are currently immobilized. Terraform Labs (TFL) purchased about 1.09 million AVAX tokens and locked them up for a year, according to the report. This quantity of tokens equals 0.5 percent of AVAX’s last week’s volume, according to Avalanche.

LFG also purchased a further 1.97 million AVAX tokens for the reserve pool, according to a report. This amount is considered to represent 0.9 percent of Avalanche’s generated volume from the previous week. Meanwhile, AVAX appears to be doomed because LFG hasn’t announced any plans to use AVAX tokens as collateral during the scheduled chain fork.

Terra just revealed that LFG still has nearly 2 million AVAX tokens, 1.8 billion UST, and 222 million LUNA. If any token sales are required, Avalanche stated that they are willing to work with a reasonable trading plan.

Since LFG’s purchase, tokens have dropped by 60%

Terra had previously added $200 million worth of AVAX tokens to its reserves. The intention to construct a $10 billion reserve, on the other hand, was insufficient to preserve the LUNA and UST tokens from the unprecedented plunge. At the time of publication, the Avax token was trading at an average price of $30.10. In the last 24 hours, it has increased by more than 4%.

Meanwhile, after Terra’s buyout, the token has lost nearly 60% of its value. On the day of purchase, the Avalanche token was trading at roughly $84. In the meantime, the AVAX’s overall market value has decreased to $8.1 billion. Terra’s LUNA, on the other hand, has dropped by about 100% since then, while its stablecoin has dropped by 92 percent.

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