One Month, 3x Growth: What's Behind AVAX's Value Surge?
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One Month, 3x Growth: What's Behind AVAX's Value Surge?
Avalanche (AVAX) is experiencing explosive growth reminiscent of early BSC and MATIC.
Navigating Web3 tides with focused insightsAuthor: Avi Felman, Co-Portfolio Manager at BlockTower
Translation: TechFlow
Interest in and adoption of Avalanche (AVAX) are surging, reminiscent of early BSC and MATIC.
In the past few days, we’ve seen TVL on Avalanche reach an inflection point—value locked nearly doubled overnight and tripled within 10 days. When MATIC’s TVL jumped from $200 million to $400 million overnight on April 14, MATIC subsequently rose fivefold within a month.
Previously, AVAX’s main issue was the lack of cross-chain bridges. However, on July 29, Avax introduced a new bridge that enables easy asset porting. In just the past five days, TVL surged from $50 million to $250 million.
A significant portion of this TVL growth has been driven by Avalanche Foundation launching major liquidity programs ($1.8 billion) and announcing that CRV and SUSHI will migrate. Additionally, the launch of Benqi—the first lending protocol on Avax—gained substantial TVL within days due to generous incentives.
From a technical standpoint, AVAX already features an EIP1559-equivalent fee mechanism, differentiating it from other public chains like MATIC and BSC. As activity increases, this creates a flywheel effect. AVAX has a fixed supply cap, meaning it will become deflationary over time.
An upcoming proposal (Apricot Phase 3), set to go live in four days, will not only reduce fees by over 50% but also make AVAX the first public chain to adopt the new EVM 1559 standard. These changes will also make it easier for new cross-chain projects to launch.
Given AVAX’s underlying infrastructure and strong technical talent, we expect it to be more reliable than current EVM implementations and more user-friendly for those accustomed to EVM-based platforms.
A key architectural decision enabling multiple subnets should allow AVAX to easily integrate any virtual machine or smart contract language. This flexibility represents a long-term competitive advantage, enabling AVAX to attract diverse developers effortlessly.
One remaining gap in the AVAX ecosystem is the lack of stablecoins on the platform. However, we expect this to change dramatically once Curve launches. Given the incentives, AVAX could become the best destination for stablecoin yield farming, potentially fueling a second wave of TVL growth.
Currently, some ecosystem projects are small but growing rapidly. Pangolin is the primary DEX, with both TVL and trading volume seeing strong growth. Trader Joe serves as a secondary AMM on AVAX, similar to the dynamic between UNI and SUSHI, while Benqi is the new lending protocol…
In summary, combining the excitement of the next MATIC/BSC-like cycle with strong long-term fundamentals makes AVAX the most attractive bet in the emerging layer-1 blockchain race.
Disclosure: BlockTower holds a position in AVAX and is long-term bullish.
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