The Luna Foundation Guard (LFG) and Terraform Labs (TFL), both organizations supporting the Terra blockchain, announced to jointly acquire $200 million worth of Avalanche’s AVAX tokens from the Avalanche Foundation.
According to a spokesperson from Ava Labs, LFG purchased AVAX tokens worth $100 million using its UST stablecoins in an over-the-counter (OCT) trade with the Avalanche Foundation.
As per Terra’s tweet, TFL has executed a $100 million LUNA to AVAX token swap to “strategically align ecosystem incentives.” With this, the Avalanche Foundation now holds $100 million worth of UST and $100 million worth of LUNA.
LFG has been actively bolstering its crypto holdings, adding over $1.6 billion of bitcoin to its treasury reserves to back Terra’s UST stablecoin. In February, LFG announced the sale of a $1 billion private token sale off-exchange, to be used in the establishment of a UST Forex Reserve denominated in Bitcoin. Terra co-founder Do Kwon pledged LFG would purchase up to $10 billion worth of bitcoin in future,
The Avalanche collaboration marks the second layer 1 token LFG added to its treasury. Jon Wu, Ava Labs President also commented on this partnership saying – “AVAX is an excellent reserve asset to complement bitcoin [BTC] in the LFG treasury.”
The two communities are coming together to bring more assets, applications, and novel subnet collaborations. The news of this latest connection sent the price of AVAX up from $84 to $87 per coin, a gain of about 4%.
Terra is in talks to collaborate with Avalanche on a new gaming subnet with details to be released “at a later time.” Emin Gun Sirer, Avalanche Founder is also anticipating more native Terra applications to expand into Avalanche through this partnership.
