The avalanche (AVAX) jumped 43.8% between March 14 and March 31 to $ 97.50 per day, the highest level since January 5. The Level 1 scaling solution uses a Proof of Stake model and has raised a total of $ 9 billion. Locked value (TVL) deposited in smart network contracts.

AVAX / US dollar token on FTX. Source: Trading View
Adoption of subnets provides nourishment for the latest price increase
Some analysts have linked the rally to an avalanche stimulus program to accelerate the adoption of subnets, which was announced on March 9. According to the Avalanche Foundation, subnets provide features that are only possible through “network-level control and the open experience”.

The program will allocate up to four million AVAX, worth approximately $ 340 million, to fund decentralized applications focused on gaming, non-fungible tokens (NFT) and financial (DeFi) applications.

Wes Quinn, CEO of DeFi at Valkyrie Investments, added that “the avalanche subnet with KYC infrastructure would be a major step forward for institutional adoption.”

Even with the good news, AVAX’s price is still 33% lower than its record high of $ 147, with a market value of $ 26.3 billion. In comparison, Terra (LUNA) has a market value of $ 38.1 billion and a total Solana (SOL) of $ 43.8 billion.

Avalanche is also compatible with the Ethereum Virtual Machine (EVM) and does not suffer from the average $ 15 transaction fee and network load affecting the Ethereum network.

Related: Traders expect Ethereum to reach $ 3800, but several data points say otherwise

The use of avalanche-smart contracts is declining
Avalanche DApp’s core value began to show weakness in March after the network’s TVL fell below 94 million AVAX.

Total value of the landslide closed, AVAX. Source: Defillama
The chart above shows how Avalanche DApp deposits peaked at 132.9 million AVAX on March 14, but fell to its lowest level since January 3, with a maximum in December 2021.

Meanwhile, TVL Terra increased by 116% between January and March 2022, reaching $ 19.8 billion. Correspondingly, deposits in Wave’s smart contracts increased from $ 730 million to $ 4.5 billion in the same period.

To be sure that the TVL fall in the avalanche causes problems, you should analyze DApp usage calculations. Some DApps, such as games and collectibles, do not require a large deposit, so TVL does not play a role in these cases.

Avalanche DApps data for 30 days. Source: DappRadar
As of April 1, the number of Avalanche network addresses interacting with DApps is down 16% compared to last month, DappRadar revealed. In comparison, the Solana network saw a 6% increase in the number of users, while the Ethereum network saw a decrease of 11%.

Although TVL Avalanche has suffered the most compared to similar smart contract platforms, the network is widely used in the decentralized financial sector (DeFi).

The data above indicate that the landslide is losing ground compared to competing chains. With AVAX up 43.8% in 17 days, some of the owners may feel uncomfortable if the DApp network continues to release weak TVL and DApp usage data.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading movement involves risk. You should do research when making a decision.

Source: CoinTelegraph

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