Let’s not sugarcoat it, the crypto markets are not looking good right now. But then again, what is? The NASDAQ is down 6.6% and the S&P 500 has dropped 4.5% in the last week. Those are amateur numbers in crypto, but big moves for the traditional markets. As the Fed raises rates and commodity shortages wreak havoc all over the world, investors are getting nervous and pulling their money out of the market.
As bad as the markets are right now, long-term hodlers have been here before. Crypto has seen worse days (looking at you March 2020) and the best coins have always bounced back stronger. We had to dig deep to find some silver lining for today’s news, but it turns out that even as prices are falling off a cliff there’s still hope on the horizon.
AVAX is one of Ethereum’s leading competitors in the smart contract space, and currently has $7.5 billion of total value locked in its ecosystem. That’s enough to make it the fourth largest smart contract protocol in the world.
To continue its rapid growth, the team is investing just under $300 million to promote the ongoing expansion of the Avalanche multiverse. A key focus for Avalanche’s developers will be implementing subnets to solve the scalability program.
A subnet is similar to a sidechain on Ethereum or a parachain on Polkadot. If someone wants to build an application or game that runs on AVAX, they can create their own subnet to validate transactions. Subnets are not affected by activity on the AVAX mainchain. Even if fees are high on mainnet, subnets will still be cheap to use.
According to Emin Gün Sirer, the director of the Avalanche Foundation, “Subnets will be the next growth engine in crypto, enabling novel functionality only possible with network-level control and open experimentation on a scale we haven’t yet seen.”
Apparently this isn’t just marketing hype, investors also believe in Avalanche’s potential. Two months ago the financial services firm Valkyrie launched the Valkyrie Avalanche Trust with $25 million in investor deposits. CIO Steven McClurg claimed that Valkyrie decided to launch the fund after fielding significant interest from investors looking to gain exposure to the AVAX token.
Nobody knows for sure when the markets will recover, however, once they do it looks like AVAX has a bright future to look forward to. In fact there are already a few very successful projects running on AVAX.
In terms of NFT sales, the play-to-earn game Crabada is Avalanche’s most successful enterprise. The game has reached just under a quarter-billion in sales, and growth continues unabated. Provided that Avalanche can scale with subnets we’re likely to see many more projects that want to build on this increasingly popular protocol.
This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.