State of Avalanche: Q1 2021
Avalanche has begun 2021 with great momentum on both the technology and ecosystem development fronts. In a nutshell, Avalanche is living through the timeline of Bitcoin at high speed, going through similar phases, except taking months to do what took years. This velocity will continue to set the pace for development in crypto and decentralized finance.
There’s a lot to be said about the growth since the beginning of the year, but there’s no better way to do that than to let metrics talk for themselves.
Ecosystem Development: Avalanche-Ethereum Bridge, Pangolin, and More
The Avalanche ecosystem took the next leap forward with the launch of the Avalanche-Ethereum Bridge, Pangolin, and several other DEXes for Avalanche and Ethereum assets. Unlike many other high ranked coins that barely support asset transfers, Avalanche is currently the only decentralized chain that fully supports the EVM, with many millions of dollars’ worth of digital assets on top. It is the place where cross-chain DeFi is taking place, with fast finality, high throughput, and significantly lower transaction fees.
Take Pangolin. This community-driven project brings the same automated market-making (AMM) model employed by crypto unicorn Uniswap to Avalanche. Whereas fees for Uniswap transactions regularly exceed $50 these days, Pangolin executes the same transactions for about a fraction of the fee with nearly instant finality.
In just the four weeks since these apps launched:
- Users have moved more than $100M in assets from Ethereum to Avalanche, including $8.2M within the first 24 hours.
- Pangolin alone has executed just under $400M in volume, and has reached over $200M in liquidity on the platform at peak, with even higher numbers across the multiple DEXes on Avalanche.
- Smart contract activity has boomed, with transactions increasing by 848% to over half a million.
- Unique wallet addresses engaging with smart contracts saw similar fast growth increasing by 1530% to exceed 35,000.
- Almost 25,000 $AVAX have been burned in transaction fees through smart contracts alone.
In the same time period, a number of integrations were announced:
- Congress of Mexican State of Quintana Roo — first government publicly using Avalanche
- TrueUSD — one of the largest and most trusted fiat-backed stablecoins
- Injective Protocol — decentralized derivatives (and Mark Cuban favorite)
- Copper — institutional custody & trading
- Axelar — cross-chain communication
- Router Protocol — cross-chain liquidity routing
- Coin98 — one of the most popular wallets in southeast Asia
- Frontier — wallet for staking, NFTs, and all native assets.
- SIMBA Chain — smart contracts as a service
- OIN Finance — stablecoin and staking derivatives issuance platform
- Cartesi — Layer-2 DeFi infrastructure
In a vacuum, each of these projects brings significant new functionalities to Avalanche. When combined with the Avalanche-Ethereum Bridge (AEB), Pangolin, and more applications launching on the platform, however, they make Avalanche the premier platform for DeFi.
As we’ve seen time and again in crypto, and now in traditional finance with Wall Street Bets and Reddit taking on Wall Street, passionate communities have exceptional power to catalyze movements and growth.
The Avalanche Community is the cornerstone of the entire project, and a key driver in making Avalanche a premier platform to build on. Better yet, it is growing at an unprecedented pace since the start of the year:
- Industry market data sites CoinMarketCap and Blockfolio have seen AVAX increase on users’ watchlists by over 3x to more than 55,000 combined.
- Avalanche Twitter alone has seen a meteoric rise in new followers, growing over 70% to more than 42,000 followers, while accounts associated with the project (including prominent team members) have grown to a combined 194,000 followers.
- Avascan, a third-party block explorer for Avalanche, reported recently almost 150,000 unique monthly active users.
What to Watch For
At a high level, we should all expect to see the most new activity and growth on Avalanche in the following pillars:
- Wallets — Wallet support is vital to expanding the Avalanche ecosystem, and improving user experience. In Q2, AVAX will be supported by some of the most downloaded crypto wallets in the world, bringing Avalanche to tens of millions of new users.
- DeFi — More applications will be expanding to Avalanche, including cornerstone functionalities like lending, collateral optimization, decentralized options, and most crucially fiat onramps for users to seamlessly access Avalanche’s DeFi ecosystem.
- NFTs — NFTs will be a huge area for growth on Avalanche, as creators can easily issue NFTs directly through the Avalanche Wallet. In Q2, we should anticipate core NFT infrastructure like auction and discovery platforms coming to Avalanche, and potentially a marquee brand in the collectibles world.
- Listings, Custody & Infrastructure — Two major qualified custodians are in the process of integrating with Avalanche. This will not only enable faster integrations with leading partners across the world, but also open AVAX to the institutional marketplace. Furthemore, more major listings, including large U.S. venues, are expected to be supporting Avalanche in Q2.
- Institutions & Enterprises — The Ava Labs team is exploring multiple proofs-of-concept with institutions and enterprises across the financial services, insurance, and pharmaceutical industries, including two publicly-traded companies.
- Crypto Infrastructure — Developers building on Avalanche will have more tools at their disposal, including popular solutions for data charting and smart contract optimizations.
We should expect this trend to continue as people continue to see what’s possible when technology breaks into new tiers of performance without compromising decentralization, and the passionate communities that are built when everyone feels part of the ecosystem.
Overall, it feels like 2010 again: exciting new technology has been unveiled, it has attracted grassroots support, and has done much better than anyone thought it would. And yet, there is so much more to come.
Per consensum ad astra.