The Avalanche Foundation has disclosed the amount of reserves in AVAX tokens of the crashed Terra project to dispel fears in the community about the sale of the asset.

1/ Some members of the Avalanche Community, $AVAX Reserves held by the Luna Foundation Guard and Terraform Labs.

Tl;dr: AVAX is currently dormant. Below is a transparency report 👇

– Avalanche 🔺 (@aalancheavax) 19 May 2022

“Some members of the Avalanche community inquired about the reserves in AVAX owned by the Luna Foundation Guard (LFG) and Terraform Labs (TFL). In short: they are not currently in circulation,” the tweet wrote.

The nonprofit behind the development of the Avalanche ecosystem said in a caption:

• TFL purchased 1.09 million AVAX with a one-year lock-in;
• LFG purchased 1.97 million AVAX to use as a reserve fund;
• these amounts are 0.5% and 0.9% of the weekly trading volume, respectively.

“Given the proposed hard fork of Terra, LFG has not disclosed its plans to use AVAX,” said the Avalanche Foundation. In doing so, the team highlighted:

If any reserve sale is considered, we are prepared to work with LFG on a prudent trading strategy.”

4/ If any sale of LFG reserves is considered, the Avalanche Foundation is ready to work with LFG on a sensible trading strategy.

– Avalanche 🔺 (@aalancheavax) 19 May 2022

On May 16, LFG reported on the status of its reserve fund, whose crypto assets were worth over $3 billion at their peak. The organization spent its reserves entirely in USDT and USDC to keep the UST algorithmic stable currency pegged to the dollar.

Out of 80,394 BTC, 313 BTC remained in the balance. However, assets in BNB and AVAX remained untouched. Excluding UST and the native Terra token (LUNA), the value of the fund fell to ~$87 million.

TFL co-founder Do Kwon has proposed a Terra hard fork that includes a new network and an airdrop. He described it as “a chance to revive the project from the ashes”. Despite the community’s negative reception of the idea, validators voted to implement the idea.

Earlier, Binance CEO Changpeng Zhao said that the hard fork would not work because the new network would not have any value.

Recall that Mike Novogratz, founder of Galaxy Digital, called UST a “big idea that failed.”

According to Tether CTO Paolo Ardoino, Terra’s stablecoin has been a “badly designed product.”