Avalanche is concerned because Luna Foundation Guard has disclosed no plans for AVAX tokens
The Luna Foundation Guard (LFG) – the entity behind the reserve fund set up to backstop the Terra blockchain’s now-failed UST stablecoin – has “disclosed no plans” for the 2 million AVAX tokens currently sitting in its treasury, according to Avalanche, a smart-contract blockchain. The blockchain said it is open to working with the Luna Foundation Guard on a sound trading strategy if the organization makes an AVAX sale.
Avalanche said in a series of tweets on May 20 that the Luna Foundation Guard (LFG), the organization behind the escrow fund set up to support the UST co-stable, has now failed the Terra blockchain and this is a problem. This is a matter of concern because LFG is holding a large amount of AVAX tokens.
“Given the proposed Terra chain fork, LFG has disclosed no plans to use the AVAX,” according to the tweet. “Should any sales be contemplated for the LFG reserves, the Avalanche Foundation is ready to work with LFG on a sensible trading strategy.”
Until the accident, Luna Foundation Guard seemed to have sold off all the assets in its reserve to save the UST, which included $3 billion in Bitcoin (BTC), 26 million USDT, and 23 million USDC. The LFG stated that the meager amount remaining would be used to compensate UST holders, prioritizing the holders of the smallest amount first.
The market value of the AVAX stash is around $60 million, making it the second-largest holding in LFG’s dwindling $240 million treasury.
Because during the whole process of saving UST, LFG did not touch AVAX. As a result, the Avalanche team was forced to provide an update as most members of the Avalanche community raised concerns that LFG’s plans for AVAX would turn negative.
In order to compensate users for the remaining “rubble,” LFG is likely to release AVAX and this may create selling pressure on the project. Additionally, Avalanche revealed Terraform Labs (TFL) is holding 1.1 million AVAX for a one-year lockup period. The AVAX numbers owned by TFL and LFG represent 0.5% and 0.9% of AVAX’s weekly volume, respectively.
The announcement comes as organizations with close ties to the Terra ecosystem are facing demands for transparency from the community due to a series of disruptions last week. The story even goes beyond the market borders and touches the law.
As of Friday, LUNA was trading at less than 1 cent and UST at 7 cents, marking a dramatic decline in the tokens’ value. Thursday’s tweet did not address the status of the Avalanche Foundation’s Terra-related tokens.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Harold
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Avalanche is concerned because Luna Foundation Guard has disclosed no plans for AVAX tokens
The Luna Foundation Guard (LFG) – the entity behind the reserve fund set up to backstop the Terra blockchain’s now-failed UST stablecoin – has “disclosed no plans” for the 2 million AVAX tokens currently sitting in its treasury, according to Avalanche, a smart-contract blockchain. The blockchain said it is open to working with the Luna Foundation Guard on a sound trading strategy if the organization makes an AVAX sale.
Avalanche said in a series of tweets on May 20 that the Luna Foundation Guard (LFG), the organization behind the escrow fund set up to support the UST co-stable, has now failed the Terra blockchain and this is a problem. This is a matter of concern because LFG is holding a large amount of AVAX tokens.
“Given the proposed Terra chain fork, LFG has disclosed no plans to use the AVAX,” according to the tweet. “Should any sales be contemplated for the LFG reserves, the Avalanche Foundation is ready to work with LFG on a sensible trading strategy.”
Until the accident, Luna Foundation Guard seemed to have sold off all the assets in its reserve to save the UST, which included $3 billion in Bitcoin (BTC), 26 million USDT, and 23 million USDC. The LFG stated that the meager amount remaining would be used to compensate UST holders, prioritizing the holders of the smallest amount first.
The market value of the AVAX stash is around $60 million, making it the second-largest holding in LFG’s dwindling $240 million treasury.
Because during the whole process of saving UST, LFG did not touch AVAX. As a result, the Avalanche team was forced to provide an update as most members of the Avalanche community raised concerns that LFG’s plans for AVAX would turn negative.
In order to compensate users for the remaining “rubble,” LFG is likely to release AVAX and this may create selling pressure on the project. Additionally, Avalanche revealed Terraform Labs (TFL) is holding 1.1 million AVAX for a one-year lockup period. The AVAX numbers owned by TFL and LFG represent 0.5% and 0.9% of AVAX’s weekly volume, respectively.
The announcement comes as organizations with close ties to the Terra ecosystem are facing demands for transparency from the community due to a series of disruptions last week. The story even goes beyond the market borders and touches the law.
As of Friday, LUNA was trading at less than 1 cent and UST at 7 cents, marking a dramatic decline in the tokens’ value. Thursday’s tweet did not address the status of the Avalanche Foundation’s Terra-related tokens.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
Harold
CoinCu News
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