Avalanche Stages Comeback Amid Growth In Memecoins, GameFi, and RWAs

Activity is heating up on Avalanche, a leading Layer 1, with memecoins, web3 games, and real-world assets driving significant growth for the network.

A Feb. 21 report from Flipside Crypto, a crypto analytics firm, Avalanche-native memecoins driving up on-chain activity in Q4 2023. Avalanche’s daily on-chain transactions peaked at $6.4M on Nov. 22, followed by a secondary spike to 6.3M on Dec. 19.

Flipside reports that a surge in GameFi activity drove up daily active users on Avalanche subnets by more than 300% since October. The report estimates 9,994 were active on Avalanche subnets on Oct. 1, compared to 40,497 active wallets on Feb. 7. Monthly subnet transaction count has also increased 36% since October, with 19.2M transactions processed during January.

DeFi Kingdoms, an Avalanche subnet-based web3 game, accounted for 81% of daily transactions over the past four months, but has recently been overtaken by Shrapnel.

The market cap of real-world assets (RWAs) on Avalanche also posted impressive growth in recent months, with the sector’s market cap growing by nearly 45% between October and February.

While Flipside noted that public data on Avalanche’s RWA ecosystem is limited due to most protocols existing as dedicated subnets, the report said EUROC, Circle’s Euro-backed stablecoin, accounted for more than 98% of RWA volume last quarter with $856M worth of trades. Avalanche launched a $50M fund in July to support the purchase of Avalanche-based RWAs.

“Strong liquidity, fresh competition in gaming, outsized token burns, and a surprising foothold for RWAs have all contributed to a healthy, even booming ecosystem,” Flipside said.

Avalanche’s recent growth follows a protracted downtrend for the network, with the total value locked (TVL) in Avalanche-based DeFi protocols crashing 92% from its December 2021 all-time high, according to DeFi Llama.

Still, Flipside reported that the network’s TVL tagged a high of $1.5B in late December after doubling in Q4 and has since held above $1B. Benqi, an Avalanche-native money market protocol, accounts for nearly 40% of network TVL worth more than $550M after growing roughly 250% since mid-October.