Due to the collapse of the Terra ecosystem, the nonprofit Avalanche Foundation lost $60 million, Avalanche founder and Ava Labs president Emin Gun Sirer told Forbes.
Sirer says the Avalanche Foundation is working closely with Terraform Labs. He explained that the companies’ partnership aims to increase the interoperability of the two blockchains.
As part of the joint effort, Luna Foundation Guard (LFG) and Terraform Labs (TFL) invested $200 million in AVAX. The first received tokens for UST in an OTC transaction, the second exchanged them for the LUNA cryptocurrency. The assets were supposed to be used to stabilize the TerraUSD rate.
The Ava Labs president also noted that the Avalanche Foundation has invested approximately $60 million in the Terra ecosystem at its current AVAX rate.
Sirer also noted that TFL and LFG continue to hold AVAX:
“We spoke to them, they didn’t drop AVAX even when they needed it, so that’s the most valuable thing they have right now. […] A significant percentage of the tokens are virtually locked, so they cannot move them.”
Earlier, the Avalanche Foundation disclosed the volume of AVAX tokens owned by Terra:
- 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.
The Avalanche founder stressed that he has no regrets about investing in Terra. According to him, partnership with the project could bring significant profit to Ava Labs.
“We were aware of the risks and thought, ‘These guys know how to manage. [проектом]their teams are fast and skilled,” he explained.
According to Sirer, the collapse of Terra has more serious consequences for the cryptocurrency industry than the attack on the DAO. That event at Mt. Gox in 2014. The Avalanche founder explained that the similarity lies in the negative impact of events on the industry.
Recall that Forbes called the collapse of LUNA and UST the “fifth reboot” of the crypto market.
Source: Fork Log
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