Terra Backers Buy $200M in AVAX Tokens, Bolstering Crypto Reserves Beyond BTC

The Luna Foundation Guard bought $100 million in AVAX with UST stablecoins. Terraform Labs swapped an additional $100 million in LUNA for the same value in AVAX.

AccessTimeIconApr 7, 2022 at 6:00 p.m. UTC
Updated Apr 7, 2022 at 6:06 p.m. UTC

Tracy Wang is a senior reporter at CoinDesk. She owns BTC, ETH, MINA, ENS, various stablecoins, and some NFTs.

The Luna Foundation Guard (LFG) and Terraform Labs (TFL), both organizations supporting the Terra blockchain, announced they had collectively acquired $200 million worth of Avalanche’s AVAX tokens from the Avalanche Foundation.

LFG purchased $100 million worth of AVAX tokens using its UST stablecoin in an over-the-counter (OTC) trade with the Avalanche Foundation, according to a spokesperson from Ava Labs.

Additionally, TFL, the company supporting development of the Terra blockchain, has executed a $100 million LUNA to AVAX token swap to “strategically align ecosystem incentives,” according to a Terra tweet.

The Avalanche Foundation now holds $100 million worth of UST and $100 million worth of LUNA after the two deals.

LFG beyond just BTC

LFG has been on a crypto buying spree of late, adding over $1.6 billion of bitcoin to its treasury reserves to back Terra’s UST stablecoin. Last month, Terra co-founder Do Kwon pledged LFG would purchase up to $10 billion worth of bitcoin for its treasury.

The Avalanche partnership marks the second layer 1 token LFG has added to its treasury.

“AVAX is an excellent reserve asset to complement bitcoin [BTC] in the LFG treasury,” Ava Labs President Jon Wu told CoinDesk via Telegram. “This is just the beginning for these two communities together. We’ll see more assets, applications, and novel subnet collaborations flourish out of this new connection.”

The news, announced midday Thursday, sent the price of AVAX up from $84 to $87 per coin, a gain of about 4% as of press time.

LUNA, the native token of Terra, was changing hands at $104.32, per CoinGecko data.

Terra also announced that it would be collaborating with Avalanche on a new gaming subnet with details to be released “at a later time.”

Avalanche founder Emin Gün Sirer tweeted that he was expecting more native Terra applications to expand onto Avalanche as a result of the partnership.


Read more about

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Tracy Wang is a senior reporter at CoinDesk. She owns BTC, ETH, MINA, ENS, various stablecoins, and some NFTs.

CoinDesk - Unknown

Tracy Wang is a senior reporter at CoinDesk. She owns BTC, ETH, MINA, ENS, various stablecoins, and some NFTs.

Trending

1
CoinDesk - Unknown
Three Arrows Capital's Su Zhu Looks to Sell $35M Singapore House

Zhu and his wife purchased the property late last year for S$48.8 million ($35 million) and now they are selling it in what analysts call a slowing market.

CoinDesk - Unknown
2
CoinDesk - Unknown
Bitcoin, Ether Futures Rack up Nearly $200M in Liquidations on Short Squeeze

Price volatility arose as signs of looming recessions were renewed among investors, one analyst said.

CoinDesk - Unknown
3
CoinDesk - Unknown
Blockchain.com, Deribit Among Creditors That Pushed for 3AC Liquidation: Report

Blockchain.com has also said it is cooperating with ongoing investigations into the hedge fund, which "defrauded the crypto industry."

CoinDesk - Unknown
4
CoinDesk - Unknown
El Salvador Purchases 80 Additional Bitcoin at $19K, President Bukele Says

The last purchase by the Central American country had been in May.

CoinDesk - Unknown