AVAX Price Soars Explained: Real-world Assets and GameFi

Active development of real-world assets and gaming on Avalanche are the key factors behind the growing on-chain activity and price surge, according to crypto analyst Alex Wacy.

Key Metrics Overview

Avalanche (AVAX) has enjoyed a remarkable 7-day rally, surging over 55%, according to CoinMarketCap data. This bullish momentum is also reflected on some ecosystem projects, with JOE witnessing a 4.35% increase in the past 24 hours and QI skyrocketing by over 130%.

DeFi researcher Alex Wacy highlighted in the latest threads that Avalanche’s focus on real-world assets (RWA) and gaming are the reasonable explanations behind the rally. A number of key metrics (from DeFiLlama) are:

• Active addresses surged by 300% in the last two months.
• DEX volumes increased from $10 million to $200 million.
• Avalanche’s total value locked (TVL) surpassed $800 million.

Avalanche Leads Real-world Assets and GameFi

As the heat surrounding AI tokens cooled off, the spotlight is now on real-world assets. According to a projection by private wealth management firm Bernstein, around $3 trillion could be tokenized in the next five years.

Tokenization and real-world assets have sparked interest of high-profile institutions like JPMorgan, Citi Bank, and Bank of America. These entities are reportedly exploring RWA tokenization using Avalanche’s solutions.

• Bank of America showed support for Avalanche’s TradFi-friendly approach in its June report. 
• In September 2023 Citibank announced that it was developing a foreign exchange (FX) solution on the Avalanche blockchain.
• In November 2023, Onyx by JPMorgan Chase announced its strategic collaboration with Avalanche Evergreen Subnet.

Additionally, Avalanche Foundation launched Avalanche Vista in July to fund $50 million in RWA development. The initiative, as stated by Ava Labs president John Wu, aims to ‘support and demonstrate the value of tokenization, the process of creating an on-chain digital representation of an asset, item or thing–something that Avalanche is designed to facilitate with greater speed, scalability, and customizability.’

With these major efforts, Avalanche has positioned itself at the forefront of RWA. Additionally, gaming on Avalanche holds immense promise. Researchers from AANC Research noted that the focus on gaming experience sets games built on Avalanche apart from those built on Ethereum.

Another advantage is Avalanche’s lower gas fees compared to Ethereum’s, which unfortunately represent a major pain point for Ethereum-powered games.