Crypto markets intelligence platform Messari has released its Q1 report on Avalanche. The report, published last week, noted that the blockchain saw more moderate growth in comparison to Q4 2021, given that most of its key metrics stabilized.
The market capital curve flattened out even though the daily transaction count broke to new heights. The report noted that the growth in Q1 was due to EVM subnet development, deployment of Avalanche Rush, the EVM subnet, and the incentive program funds.
Report: Avalanche is closing in on Ethereum’s daily transaction count
Messari explained that in Q1, Avalanche’s daily transaction count grew to 865,000 from 473,000 in the previous quarter, indicating that Avalanche conducts about 74% of the transactions on DeFi competitor Ethereum’s network – a vital indicator of a now-stronger chain.
A surge in network activity
Speaking DeFi, the launch of GameFi subnets played a part in this growth in addition to the dApps that rolled out on Avalanche. DeFi Kingdoms Crystalvale and Crabada subnets launched in this quarter.
The daily NFT traded volume also markedly rose above $1 million for the first time in this quarter. Significantly higher numbers in transactions and daily active addresses (reached an all-time high of 140,000 in January) caused the revenue generated in this quarter to spike 72.7% over Q4.
Evolution of the ecosystem
Messari observed that across Q1, the TVL of the Avalanche DeFi ecosystem declined but warned that the downfall would have been even worse were it not for the growth and development of smaller novel protocols on the platform.
While the TVL has since stabilized around $11 billion, its top three protocols in Trader Joe, Benqi, and Aave sat at 20%, 18%, and 4% loss in the quarter, respectively. After joining Avalanche’s liquidity mining program Rush in Q4, the protocols filed an even stronger claim for the top three positions in Q1. So much that they collectively pulled the TVL down by 12% – larger than the entire ecosystem did.
On the other side of the coin, Platypus Finance bulged from $10 million to more than $750 million in TVL. With about 7,500% growth, Platypus became the ‘most-improved’ protocol and now sits in the top 10 in transaction traffic. Developments around Pangolin and Terra in Avalanche also helped keep the network afloat.
What’s to come
The report said that going ahead; there should be more upgrades to come. The multiverse will enable subnets to keep on growing, more so if they gain extended functionality. So, Avalanche Rush and Blizzard will keep on boosting growth on Avalanche. Further, Avalanche’s on-chain governance development is expected to continue, as will key network updates.
Subnets are avenues of demand creation, not the contrary, explains Ava Labs CEO
The CEO of Avalanche’s Ava Labs, Emin Gün Sirer, has explained that subnets are a creation that will mean more value for AVAX rather than strip it away from the Avalanche-native ticker.
Via a Twitter thread, Sirer dispelled concern that value could trickle away from the Avalanche base network with the launch of subnets. First, the Ava Labs CEO explained that each subnet validator is required to stake 2000 AVAX, which in turn means massive demand as new subnets with multiple validators are created.
He added that subnets that run on their own tokens are required to provide liquidity for their gas tokens. Each gas and play-to-earn token is needed to tie down AVAX. For instance, Token Under Sea (TUS) and Crabada (CRA) have committed $3 million in AVAX each for automated market makers – a bullish factor for Avalanche. As competition becomes even more strict, the Avalanche founder believes there’ll be even higher demand as validators will claim for payments in AVAX besides the sunset specific gas tokens.
To wrap up, he echoed sentiments he has shared in the past – his belief that the best chain would be one that takes in all the massive growth expected to come in the blockchain space. Avalanche is well positioned to gain significantly from such an environment with its architectural structure.
Arweave’s immutable decentralized data storage lands on Avalanche
Decentralized storage network Arweave has stretched onto the Avalanche network. Arweave aims to store user data using a proof of access consensus mechanism to keep it safe for at least 200 years. Payments collected by the platform are distributed to miners over a long period – they gain AR tokens to help store the data.
Using the platform, users gain cheap storage ($5-$8 for 1GB, payable in AVAX) for their data, files, metadata, and other records. To maintain the integrity of the data stored on Arweave, any change conducted on the data equates to a separate transaction from the stored data.
The Bundlr Network is the module enabling interoperability of Arweave and Avalanche. It collects segments of data, bundles them to Arweave in single base layer transactions and also enables the payments from Avalanche wallets.
Going ahead, Arweave CEO Sam Williams believes this collaboration will foster a rise of a new generation of Web3 applications on Avalanche as developers can now use the storage solution as if natively available. Notably, this integration serves decentralized products, such as storing NFT metadata and will also work for other use cases requiring permanent storage.
To learn more about Avalanche, visit our Investing in Avalanche guide.
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