The Avalanche Foundation is preparing a bold move to raise approximately $1 billion to acquire its own token, AVAX, using two new U.S.-based treasury companies. The Foundation aims to purchase AVAX from its reserves at discounted rates, offering institutional investors exposure through these dual entities, according to sources cited by Financial Times.
What the Plan Entails
The strategy involves creating two separate financial vehicles, each seeking around $500 million. One is set to be structured as a private investment company, while the other will take the form of a special purpose acquisition company (SPAC).
People familiar with the matter said the vehicles will purchase large volumes of AVAX directly from the Foundation’s reserves rather than from open markets. The tokens would be sold at negotiated discounts to participating investors, giving the Foundation a major infusion of capital while locking up a sizable portion of its supply.
A source described the initiative as “an opportunity to give Avalanche a stronger balance sheet and the tools to defend its ecosystem,” adding that “the vehicles would operate with strict treasury mandates rather than as speculative funds.”
The Foundation itself has so far declined to publicly comment on the ongoing plans.
Purpose and Motivation
Insiders say the Foundation’s objective is to reduce circulating supply and signal long-term institutional confidence in AVAX. By locking a substantial portion of tokens inside treasury-controlled entities, it hopes to create a base of stability, build investor trust, and regain momentum against rival smart contract platforms like Ethereum and Solana.
Internally, the dual structure is seen as giving Avalanche more flexibility to manage tokenomics without relying entirely on unpredictable market conditions or future external funding rounds. One person close to the discussions said, “This isn’t about short-term price action — it’s about building credibility. Having a real treasury gives them flexibility, and it tells institutions they’re serious about playing at scale.”
Risks, Regulatory and Market Concerns
Despite its ambition, the plan carries notable risks. Concentrating large amounts of AVAX in foundation-controlled vehicles could amplify exposure to market volatility and trigger concerns about transparency or governance.
Legal experts have warned that discounted token sales to institutional buyers could attract scrutiny from U.S. regulators, especially if such arrangements resemble securities offerings or appear to manipulate market pricing. A former U.S. regulatory official noted that “raising institutional money to buy your own token is a high-wire act. If it isn’t transparent, it could be interpreted as market support or even price manipulation.”
There are also market-related concerns. Treasury-style crypto entities have historically seen mixed results and volatile investor sentiment, particularly when structured as public SPACs. If AVAX prices underperform, the vehicles could become underwater, undermining the Foundation’s credibility.
Strategic Implications
If the fundraising succeeds, Avalanche could become one of the first blockchain networks to wield a large on-chain treasury specifically designed to manage its token economy. That would give it stronger influence over supply, price stability, and ecosystem funding while signaling to markets that the network has institutional-grade financial backing.
However, failure to deliver meaningful returns or preserve market trust could damage Avalanche more than help. If the effort is perceived as a gimmick or as artificial price support, it could erode confidence and make the network appear financially fragile rather than strong.
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