AVAX 3Q24 Review

 

Table of Contents

1. Project Overview

2. 3Q24 Highlights: Strengthening Foundations and Expanding Reach
2-1. Key highlights
2-2. Key metrics

3. Major Partnerships and Updates
3-1. Rebranding Subnets to 'L1': A Strategic Shift
3-2. Avalanche9000: Avalanche’s largest upgrade since mainnet launch
3-3. Grants and community support to accelerate L1 expansion
3-4. Avalanche leading Web3 adoption in the U.S. public sector and financial institutions
3-5. Innovating fan engagement through on-chain ticketing management and film production

4. On-Chain Performance
4-1. Network activity
4-2. Network security
4-3. Development activity

5. Closing Summary

 

 

1. Project Overview

Avalanche is a Layer 1 blockchain platform offering customizable blockchains known as “L1 chains” (previously referred to as Subnets). Each L1 chain operates as an independent network within the Avalanche ecosystem, with its own token economy, governance rules, and validators. Alongside these L1 chains, Avalanche’s Primary Network is composed of the P-Chain, X-Chain, and C-Chain, leveraging the Snowman consensus algorithm for efficient processing.

 

2. 3Q24 Highlights

2-1. Key highlights

Driving L1 ecosystem growth through technological upgrades and grant programs

• Rebranding of Subnets as L1 Chains
• “Avalanche9000” Upgrade: The most substantial upgrade since the mainnet launch, designed to enhance the scalability and functionality of the L1 ecosystem
• “Retro9000” Grant Program: A community-led initiative allocating $40 million in grants to support the rollout and adoption of Avalanche9000.
• infraBUIDL() Program: Launched to fund infrastructure developers and foster long-term growth in the Avalanche ecosystem.
• Codebase Accelerator Season 2: Provides funding and mentorship to Web3 startups, empowering entrepreneurs to build on Avalanche.
• Community Airdrops: Distributed rewards to Avalanche users to boost participation and engagement within the network.

Pioneering Web3 adoption in the U.S. public sector and financial markets

• California DMV: Digitalized 42 million vehicle ownership records on the Avalanche blockchain, demonstrating the platform’s potential in public sector applications.
• Franklin Templeton: Launched the BENJI tokenized money market fund on Avalanche, showcasing institutional adoption of blockchain technology.
• ParaFi Capital: Partnered with the Securitize platform on Avalanche to tokenize investment funds, unlocking new financial products for investors.
• Agora: Introduced the AUSD digital dollar, offering a blockchain-based financial model aimed at transforming traditional finance.

Innovating fan engagement through on-chain ticketing management and film production

• Passo: A leading Turkish ticketing company, Passo launched Tixbase, an L1 ticketing platform on Avalanche, revolutionizing ticket management services.
• Pressman Film: Transformed independent film financing by raising funds through the Republic platform on Avalanche, democratizing film production.

2-2. Key metrics

 

3. Major Partnerships and Updates

Avalanche’s key focus areas in 3Q24

In Q3, Avalanche prioritized two strategic directions: 1)The network invested heavily in strengthening its core ecosystem, including platform upgrades, developer support, and community engagement (accounting for 43% of activities) and 2) Enterprise and institutional onboarding to Web3: With another 43% of efforts focused externally, Avalanche sought to expand its influence and enable mass adoption of Web3 across various industries. A particularly noteworthy initiative was Avalanche’s collaboration in ticketing management and film production, aimed at redefining fan engagement within the art and cultural sectors through Web3 technology.

Source: Gaming on AVALANCHE

While no significant gaming-related announcements were made during the quarter, interest in the Web3 gaming sector surged in October with the early success of the Off the Grid (OTG) game. Given the growing momentum and anticipation for additional game launches, more developments are expected in Q4.

Despite the market’s volatility—including a sharp correction in August and gradual recovery in September—Avalanche maintained a steady focus on technological upgrades and strategic partnerships. Below are the most critical updates from Q3.

3-1. Rebranding Subnets to 'L1': A Strategic Shift

Source: @avax

One of the most significant developments this quarter was the rebranding of Subnets as “L1” chains to emphasize their independent blockchain network status. This shift highlights that these chains are no longer subordinate components but fully autonomous networks, each serving as a purpose-built Layer 1 (L1) blockchain.

Alongside this rebranding, Avalanche launched the Avalanche Interchain Token Transfer (ICTT) protocol to streamline token transfers between L1 chains. ICTT ensures that each L1 chain retains its operational independence while remaining interoperable within the broader ecosystem. This strategic shift positions Avalanche as a hub connecting specialized L1 blockchains optimized for specific use cases. The network’s Avalanche Interchain Messaging (ICM) system—introduced through the Avalanche9000 upgrade—enables seamless communication and resource sharing across these chains. Further details about Avalanche9000 are discussed in the next section.

3-2. Avalanche9000: Avalanche’s largest upgrade since mainnet launch

Source: Avalanche Official Blog

The Avalanche9000 upgrade represents the most comprehensive enhancement to the network since its mainnet launch, focusing on performance optimization, scalability, and interoperability. This upgrade provides developers with the flexibility to build customized L1 chains while maintaining economic efficiency.

Avalanche9000 introduced Avalanche Interchain Messaging (ICM) as the foundation for interconnecting all L1 chains within the ecosystem. The ICM protocol enables seamless communication and resource sharing among independent L1 chains, allowing them to function as if they were part of a single, unified network. This architecture ensures that each L1 chain retains its autonomy as an independent blockchain while simultaneously gaining instant access to Avalanche’s liquidity and infrastructure.

The Avalanche9000 upgrade includes significant protocol changes, such as ACP-77, along with various technical improvements. It also introduces the Retro9000 and Bounty9000 programs, which reward early developers based on their contributions to the upgrade process. Avalanche provides developers with access to customization tools, regulatory compliance support, and a variety of development resources to facilitate the creation of their own L1 blockchains. These tailored L1 networks allow Web3 projects to realize their visions by building within a multi-chain ecosystem, where they can maximize scalability and interoperability.

One of the most significant changes is that upon completion of this upgrade, the existing policy of staking a bundle of 2,000 AVAX to build an L1 chain will be replaced by an affordable subscription-based model with monthly fees. This transition is expected to significantly reduce the upfront costs for projects aiming to build new L1 chains, facilitating the onboarding of numerous projects onto the Avalanche ecosystem. The subscription fee is paid in $AVAX tokens, and the tokens paid are burned, which has a positive impact on boosting the token's value.

This upgrade aims to redefine the role of L1 blockchains within Avalanche’s multi-chain architecture, paving the way for new innovations by removing technical limitations that previously hindered blockchain ecosystems.

3-3. Grants and community support to accelerate L1 expansion

To accelerate the expansion of L1 chains, the Avalanche Foundation has implemented several grant programs and community support initiatives aimed at fostering ecosystem growth. These initiatives were designed to lower both financial and technical barriers for developers, making it easier to build L1 blockchains, while also enhancing community loyalty and engagement. The following table summarizes the key programs introduced during Q3 2024:

3-4. Avalanche leading Web3 adoption in the U.S. public sector and financial institutions

Avalanche is at the forefront of Web3 adoption through collaborations with renowned U.S. companies and institutions, delivering blockchain solutions across multiple industries. By integrating blockchain-based technologies, these initiatives enhance operational efficiency and foster a new digital asset ecosystem.

California DMV digitizes 42M vehicle titles on Avalanche blockchain

Source: Avalanche Official Blog

The California Department of Motor Vehicles (DMV) has digitized 42 million vehicle titles on the Avalanche blockchain, streamlining ownership transfer processes. This new system leverages smart contracts that function similarly to escrow, securely facilitating ownership changes. Users can now receive verified electronic certificates through the DMV’s mobile app, reducing paperwork and preventing fraud. This project marks a pivotal achievement as California becomes one of the first public entities to integrate blockchain technology to tackle inefficiencies and fraud.

Franklin Templeton launches BENJI Money Market Fund on Avalanche Network

Source: Avalanche Official Blog

Franklin Templeton has launched the BENJI tokenized money market fund on the Avalanche blockchain, making it the first on-chain money market fund in the U.S. This fund manages shareholder records by processing transactions on a public blockchain. Investors can use the Benji app to purchase fund shares with USDC and transfer them peer-to-peer. In the future, additional features such as secondary market trading and collateral transfers will be introduced, further expanding the fund's functionality. With this launch, alongside previous partnerships with JPMorgan and CitiGroup, Avalanche continues to create significant use cases, positioning itself as a key player in driving innovation for the future of digital finance.

ParaFi Capital tokenizes venture fund on Securitize Platform with Avalanche

Source: Avalanche Official Blog

ParaFi Capital, an alternative asset management and technology firm, has tokenized a portion of its venture fund on the Avalanche blockchain through the Securitize platform. This move allows ParaFi to lead in the digitization of traditional assets and the development of blockchain-based financial services while attracting a new group of investors. The Securitize platform enhances liquidity and settlement efficiency, and ParaFi's tokenized assets are expected to be traded on Securitize Markets in the near future. This initiative further strengthens Avalanche's tokenized asset ecosystem.

Agora drives DeFi innovation with AUSD Digital Dollar on Avalanche

Source: Avalanche Official Blog

Agora has introduced AUSD, a fully collateralized U.S. digital dollar, on the Avalanche network, marking a new innovation in the DeFi ecosystem. AUSD is backed by cash, U.S. Treasury bills, and reverse repos, ensuring high stability, which makes it a highly reliable digital asset for global users. AUSD will be integrated with key DeFi projects on Avalanche, including LFJ(formerly Trader Joe) and BENQI, enabling its use in liquidity provision, lending, and borrowing services. Through the synergy with Avalanche’s fast and low-cost network, AUSD is expected to play a key role in Agora's mission to innovate digital finance.

These examples demonstrate how Avalanche is leading the adoption of Web3 technologies in the U.S., accelerating the digitization of both public services and traditional financial infrastructure through blockchain. Avalanche’s collaborations and technical advancements contribute to the growth of the digital asset market and broaden the application of blockchain technology across industries.

3-5. Innovating fan engagement through on-chain ticketing management and film production

Turkish ticketing company Passo partners with Avalanche L1 ticketing platform, Tixbase

Source: Avalanche Official Blog

Passo, a leading ticketing company in Turkey, has entered into an exclusive five-year partnership with blockchain-based ticketing platform Tixbase, incorporating Tixbase’s Avalanche blockchain technology to innovate its ticketing system. This collaboration aims to strengthen the security and transparency of ticketing while addressing challenges in the secondary market, setting a new standard for the industry.

Built on Avalanche’s L1 blockchain, TixChain—a core feature of Tixbase—authenticates tickets and stores all records on an immutable ledger, reducing the risk of fraud and unauthorized resales. Tickets issued as NFTs not only offer fans exclusive content and experiences but also serve as digital collectibles that can be traded, further boosting fan engagement.

This partnership represents a pivotal shift by integrating blockchain into Passo’s existing infrastructure, providing event organizers and attendees with a secure and innovative ticketing experience.

Pressman Film revolutionizes independent film financing via ‘Republic’ Platform

Source: Avalanche Official Blog

The iconic independent film production company Pressman Film is pioneering a new model for film financing through the Republic investment platform, powered by the Avalanche blockchain. Known for producing classics like Wall Street and American Psycho, Pressman Film aims to raise funds for six upcoming film projects through this partnership.

In Pressman Film’s investment structure, funds are initially raised from the public during the early stages and used for film planning(development). As the project moves into full-scale production, financing is secured from institutions or professional investors to cover the production budget. A portion of this budget is allocated to repay the principal and a premium to early-stage investors. This structure allows early investors to recover their investment quickly during the development phase, while still participating in profit-sharing once the film begins generating revenue after release. When integrated with Web3, this model is expected to reduce delays in the early stages of film production, providing early fan investors with both rapid returns and long-term profit opportunities. The collaboration introduces a new funding model for the film industry, empowering fans to participate directly in production and hold ownership rights, thereby transforming fan culture.

These initiatives highlight how Avalanche is proving the value of blockchain in the cultural and creative industries, fostering a fan-centric culture. In both ticketing and film production, blockchain technology is empowering fans with real ownership and financial opportunities, transforming them from passive consumers to active participants in the creative process. Moving forward, Avalanche’s technological advancements and strategic partnerships are poised to drive continued innovation and create new value in the cultural content ecosystem.

 

4. On-Chain Performance

4-1. Network activity

In Q3, the Avalanche C-Chain’s average daily transaction count decreased by approximately 20% QoQ, reaching 160K transactions. The number of active addresses also declined by about 27%, down to 31K. It is important to note that this data only reflects activity on the C-Chain and does not include other Avalanche L1s.

During the quarter, six new L1s were launched, bringing the total number of projects utilizing Avalanche L1 to 131. Notably, in addition to Web2 companies creating new L1s to onboard into Web3, several Web2 companies also entered the Web3 industry by partnering with existing Web3 companies that are already operating on the Avalanche network. While the increase in Web3 and Web2 partnerships may not directly result in a surge of new L1s, these collaborations are still driving overall network activity across the broader Avalanche ecosystem.

The Total Value Locked (TVL) on the Avalanche C-Chain remained steady at around $1B, despite the mixed performance of the crypto market. The network’s staking ratio saw a slight decrease of 4 percentage points, ending the quarter at 53%.

4-2. Network security

The number of validators on the Avalanche network experienced a slight decline in Q3. In the first quarter of the year, the rapid growth in the number of new L1s contributed to an increase in validators. However, as the pace of L1 creation slowed post-Q1, this upward trend in validator numbers has also stabilized. With several new gaming-related L1s expected to launch in Q4, it will be important to monitor how these developments impact validator participation moving forward.

4-3. Development activity

While the number of newly deployed smart contracts on Avalanche saw a decline this quarter, development activity—measured by the number of commits—grew by approximately 23% QoQ. As the Avalanche9000 upgrade takes full effect, the expansion of L1s and increased service usage is expected to drive a rebound in smart contract deployments.

 

5. Closing Summary

In Q3, Avalanche focused on reinforcing its internal ecosystem through technological upgrades and various support programs while expanding its foundation for mass adoption in Web3, particularly via partnerships in the U.S. The Avalanche9000 upgrade and these support initiatives are critical steps for the network’s long-term development. Although these efforts may not immediately reflect in on-chain metrics, the steady groundwork being laid is expected to create significant synergies as the broader crypto market evolves.

As we look ahead to Q4, key developments in the gaming sector and major announcements from the Avalanche Summit are anticipated. These events are expected to significantly shape Avalanche’s trajectory, and a deeper analysis of the network's Q4 performance will be covered in Xangle's 4Q24 Review.