Avalanche (Avax) has been under pressure as there is a possibility that Terraform Labs and the Luna Foundation Guard could sell its $92 million worth of AVAX tokens.
The blockchain stated that it does not believe Terra would sell its token holdings, but it is happy to help with any AVAX sales.
The holdings constitute a small portion of the overall AVAX supply and might trigger some instabilities in its prices if dumped. According to Avalanche, the LFG has roughly 1.97 million tokens, whereas Terraform Labs has about 1.07 million.
Many investors are unsure about Terra Luna’s prospects after its collapse. Terra’s CEO, Do Kwon, has offered several plans to revive the chain.
Terra owns over 3 million AVAX tokens
After a constant inquiry by the AVAX community, the team was notified that they are currently immobilized. It added that Terraform Labs (TFL) purchased about 1.09 million AVAX tokens and locked them up for a year. Avalanche stated that this quantity of tokens equals 0.5% of AVAX’s last week’s volume.
It further added that LFG also purchased an extra 1.97 million AVAX tokens for the reserve pool. This amount is considered to represent 0.9% of Avalanche’s generated volume from the previous week. Meanwhile, AVAX appears to be doomed because LFG hasn’t announced any plans to use AVAX tokens as collateral during the scheduled chain fork.
Recently, Terra revealed that LFG still has nearly 2 million AVAX tokens, 1.8 billion UST, and 222 million LUNA. Avalanche stated that they are willing to collaborate with a realistic trading plan if any token sales are required.
Avalanche tokens has lost over 60% since LFG purchase
Terra had previously added $200 million worth of AVAX tokens to its reserves. However, the plan to construct a $10 billion reserve was insufficient to preserve the LUNA and UST tokens from the historic plunge. The Avax token was trading at an average price of $30.10 at the time of writing. In the last 24 hours, it has increased by more than 4%.
Meanwhile, after Terra’s acquisition, the token has lost nearly 60% of its value. On the day of purchase, the Avalanche token was trading at roughly $84. In the meantime, AVAX’s total market valuation has decreased to $8.1 billion. However, Terra’s LUNA has dropped by about 100% since then, while its stablecoin has dropped by 92%.