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Avalanche lost $60 million to Terra

Due to the collapse of the Terra ecosystem, the Avalanche Foundation lost $60 million, Avalanche founder and head of Ava Labs Emin Gun Sirer told Forbes.

According to Sirer, Avalanche Foundation worked closely with Terraform Labs. He explained that the companie’s partnership was aimed at increasing the interoperability of the two blockchains.

As part of the collaboration, Luna Foundation Guard (LFG) and Terraform Labs (TFL) invested $200 million in AVAX. The former acquired the tokens in an over-the-counter transaction for UST, the latter exchanged them for LUNA cryptocurrency. The assets were to be used to stabilize TerraUSD.

The head of Ava Labs noted that the Avalanche Foundation also invested about $60 million in the Terra ecosystem at the current AVAX exchange rate.

Cyrer also said that TFL and LFG continue to hold on to AVAX:

“We’ve talked to them, they haven’t dropped AVAX even in a tough time, so it’s currently the most valuable thing they own. […] A significant percentage of the tokens are pretty much locked up, so they can’t move them.”

Earlier, the Avalanche Foundation clarified the amount of AVAX tokens Terra owns:

– TFL bought 1.09 million AVAX with a one-year lock-in period;

– LFG bought 1.97 million AVAX for use in a reserve fund;

– these amounts represent 0.5% and 0.9% of weekly trading volume, respectively.

The Avalanche founder stressed that he has no regrets about his investment in Terra. In his view, the partnership with the project could have yielded significant returns for Ava Labs.

“We knew the risks and thought, ‘These guys understand how to run [the project], their team is nimble and talented,'” he explained.

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