3 explanation why Avalanche (AVAX) value is up 200% this month
Layer-one blockchain networks like Bitcoin (BTC) and Ethereum (ETH) kind the muse of the cryptocurrency ecosystem and allow sensible contract performance that has allowed the creation of recent industries like decentralized finance (DeFi) and nonfungible tokens (NFT).
Avalanche (AVAX) is a comparatively new layer-one resolution that has not too long ago seen a major improve in value and adoption because the dominant smart-contract platform (Ethereum) continues to battle with excessive transaction prices and slower processing instances than its opponents.
Data from Cointelegraph Markets Pro and TradingView exhibits that after hitting a low of $12.24 on Aug. 3, the value of AVAX rallied 205% to a multi-week excessive at $37.42 on Aug. 20 as its 24-hour buying and selling quantity surged to greater than $1.4 billion.
Three causes for the numerous value progress from AVAX are its quickly increasing DeFi ecosystem, the discharge of the Avalanche bridge to Ethereum and the protocol’s distinctive tokenomic design that gives dynamic charges and a token burn mechanism.
Avalanche Rush expands the DeFi ecosystem
One of the largest developments to occur for the Avalanche protocol was the announcement of Avalanche Rush on Aug. 18, a $180 million liquidity mining incentive program launched along with Aave and Curve that’s designed to introduce extra purposes and belongings to its rising DeFi ecosystem.
Experience the facility of #Avalanche. Welcome to #AvalancheRush, the $180M liquidity mining incentive program in collaboration with main DeFi dapps–each on and off Avalanche– beginning with @aaveaave and @curvefinance. And, that is simply Phase 1! https://t.co/YGrrVB7Uqc
— Avalanche (@avalancheavax) August 18, 2021
Phase 1 of the Rush program is about to start within the close to future and will enable AVAX for use as liquidity mining incentives for Aave and Curve customers over a 3 month interval.
A complete of $27 million value of AVAX has been put aside by the Avalanche Foundation to fund the inducement program with extra allocations deliberate for section 2.
The program was designed to display the Avalanche Foundation’s dedication to scaling DeFi on the community and serving to to “create a more accessible, decentralized, and cost-effective ecosystem.”
Evidence of the expansion of DeFi on the Avalance community could be discovered within the growing complete worth locked (TVL) in protocols on the community, corresponding to Pangolin and Benqi Finance which not too long ago surpassed a TVL of $300 million.
Ethereum bridge facilitates asset migration
A second purpose for the bullish progress seen within the Avalance ecosystem over the previous few weeks is the discharge of the Avalanche Bridge (AB) on July 29. This “next-generation cross-chain bridging technology” enables the transfer of assets between the Avalanche and Ethereum networks.
The Avalanche Bridge (AB) launched just 3 weeks ago.
Today, AB officially transferred over $100M in tokens to and from Ethereum.
— Avalanche (@avalancheavax) August 19, 2021
As proven within the above tweet, within the three weeks for the reason that AB was launched, it has transferred greater than $100 million in token worth between the 2 networks as holders search lower-fee environments to conduct their transactions.
The AB is estimated to be 5 instances cheaper than the earlier Avalanche-Ethereum Bridge (AEB) and it’s purported to supply a “better user experience than any cross-blockchain bridges launched to-date.”
If Ethereum is unable to get a deal with on excessive transaction prices within the close to future, there’s a good probability that belongings and liquidity will proceed emigrate to chains like Avalanche as their DeFi ecosystems develop in measurement and worth.
Related: Avalanche (AVAX) in ‘overbought’ zone after 100% good points in every week — Correction forward?
Transaction burning improves AVAX tokenomics
A 3rd purpose for the growing curiosity within the Avalanche community is the protocol’s distinctive tokenomic construction that features a transaction payment burning mechanism that helps scale back the circulating provide over time.
#Avalanche burns all transaction charges.
See how a lot has been burned to date! https://t.co/LpxU9dtyXy
— Avalanche (@avalancheavax) August 20, 2021
As famous within the above tweet, all charges on Avalanche are burned for the good thing about everybody locally because the hard-capped provide of 720 million AVAX is assured to lower over time. This might assist improve the worth of the remaining tokens in circulation.
At the time of writing, greater than 163,000 AVAX have been burned, a determine which will increase extra quickly as extra customers transact on the community.
The community’s payment mechanism can be set to endure an improve to Apricot section three which can introduce C-Chain dynamic charges on Aug. 24.
⭐Apricot Phase Three: C-Chain Dynamic Fees
Apricot Phase Three improve will activate on @Avalancheavax Mainnet at 7 a.m EDT (11 a.m UTC) on Tuesday, August twenty fourth
— AVAX Daily (@AVAXDaily) August 16, 2021
The new integration will enable for the addition of a time-based, rolling window payment calculation, a capped payment vary of 75–225 nAVAX and a block gasoline restrict of 8 million gasoline.
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