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Avalanche, a blockchain of smart contracts, says it is ready to work with luna Foundation Guard on a “smart trading strategy” if the tokens are sold.
Avalanche, a blockchain of smart contracts, reported that the Luna Foundation Guard (LFG), the organization behind the reserve fund created to support the failing UST stablecoin, the Terra blockchain, “does not disclose any plans” for 2 million AVAX. The tokens are currently in its treasury. This raises concerns, against the backdrop of a possible fork of Terra (LUNA).
“Given the proposed Terra chain fork, LFG has not announced plans to use AVAX,” it said. “If any sales of LFG inventory are to be considered, the Avalanche Foundation stands ready to work with LFG on a sensible trading strategy.”
Because the token’s price hovers around $30 per token, the market value of the AVAX cache is around $60 million, making it the second-largest holding in LFG’s shrinking $240 million treasury.
Avalanche said it provided the update because “some members of the Avalanche community have requested details about avax dollar reserves.”
Crypto traders have been speculating about plans for AVAX tokens and what impact any sales could have on the market.
The announcement comes as organizations closely aligned with the Terra ecosystem, including the $8 billion Avalanche Level 1 blockchain, face transparency demands from the community as they take into account last week’s market developments.
In addition, in another tweet, Avalanche reported that blockchain developer Terra Terraform Labs (TFL) owns 1.1 million AVAX tokens. According to the report, TFL tokens are subject to blocking for one year.
According to Avalanche, AVAX tokens owned by the TFL and LFG account for 0.5% and 0.9% of the weekly token volume.
“AVAX is currently immobilized.” In April, Luna Foundation Guard and Terraform Labs, both organizations that support the Terra blockchain, announced that they had jointly acquired $200 million worth of AVAX tokens from the Avalanche Foundation.
In exchange, the Avalanche Foundation received a $100 million LUNA from Terraform Labs and a $100 million UST stablecoin from Luna Foundation Guard.
As of Thursday afternoon, LUNA was trading for less than 1 cent and UST for 8 cents, indicating a sharp decline in the value of the tokens. The message did not address the status of Avalanche Foundation tokens associated with Terra.
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