Avalanche Foundation to repurchase 1.97M tokens in new deal

The Avalanche Foundation has reached an agreement to repurchase nearly 2 million tokens previously sold to the Luna Foundation Guard (LFG) in a $100 million deal made in April 2022.

According to the Foundation, the repurchase of the 1.97 million Avalanche (CRYPTO:AVAX) tokens is currently valued at approximately $56 million, marking a 44% drop from the original value of the deal.

The agreement is pending court approval, as Terraform Labs' estate is under bankruptcy proceedings.

The original deal saw LFG purchase the AVAX tokens to bolster its reserves, coming just before the Terra ecosystem collapsed in May 2022, which led to uncertainty regarding the tokens’ future.

Following Terra's collapse, the tokens were held as part of Terraform Labs' bankrupt estate.

In its announcement, the Avalanche Foundation emphasised that the repurchase would protect the tokens from any potential liquidation by the bankruptcy trustee.

"This action ensures that LFG would not violate the original agreement’s restrictions on the tokens’ use," the Foundation stated.

The financial specifics of the repurchase were not disclosed in the announcement, but the current market value of the tokens reflects a sharp decline from their initial worth.

The deal will be finalised once the bankruptcy court overseeing Terraform Labs approves the arrangement.

Following the news, AVAX saw a price increase of more than 13%, with its value rising from $25.16 on October 10 to around $28.50.

The price surge also coincides with growing interest in the new video game Off The Grid, which has an in-game economy built on Avalanche's Subnet.

At the time of writing, the Avalanche price was $29.15.