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Due to the collapse of the Terra ecosystem, the non-profit organization Avalanche Foundation lost $ 60 million, Avalanche founder and head of Ava Labs Emin Gun Sirer told Forbes.
According to Sirer, the Avalanche Foundation worked closely with Terraform Labs. He explained that the partnership of the companies was aimed at increasing the interoperability of the two blockchains.
As part of the joint work, Luna Foundation Guard (LFG) and Terraform Labs (TFL) invested $ 200 million in AVAX, the first acquired tokens during an over-the-counter transaction for UST, the second exchanged them for luna cryptocurrency. The assets were to be used to stabilize the Rate of TerraUSD.
The head of Ava Labs noted that the Avalanche Foundation also invested about $ 60 million in the Terra ecosystem at the current rate of AVAX.
Sirer also stated that the TFL and LFG continue to hold AVAX:
“We’ve talked to them, they haven’t dropped AVAX even in a difficult moment, so it’s currently the most valuable thing they own. […] A significant percentage of the tokens are virtually blocked, so they can’t move them.”
Earlier, the Avalanche Foundation clarified the volume of AVAX tokens owned by Terra:
- TFL acquired 1.09 million AVAX with a one-year lockdown period;
- LFG bought AVAX 1.97 million for use in the reserve fund;
- these amounts are 0.5% and 0.9% of the weekly trading volume, respectively.
The founder of Avalanche stressed that he does not regret investing in Terra. In his opinion, the partnership with the project could bring Ava Labs significant profits.
“We knew about the risks and thought, ‘These guys understand how to manage. [проектом], their team is operational and talented,”he explained.
According to Sirer, the collapse of Terra has more serious consequences for the cryptocurrency industry than the attack on The DAO. He compared the incident to the hacking of the Mt. Gox exchange in 2014. The avalanche founder explained that the similarities lie in the negative impact of events on the industry.
Recall, Forbes called the collapse of LUNA and UST the “fifth reset” of the crypto market.
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