Avalanche subnets see growth but AVAX struggles, here’s why
- Despite the fall in AVAX’s value, development activity saw steady growth.
- The number of transactions on subnets dropped precipitously on 16 May.
Like other cryptos in the market, Avalanche [AVAX] retreated sharply following the gains made in mid-April. AVAX experienced one of the steepest losses in value among L1 tokens during the past 30 days, falling more than 27% in total.
At the time of publication, it exchanged hands at $14.83, per CoinMarketCap data.
However, despite the downside, what could possibly pique investors’ interest was the steady growth in development activity. Development activity is used to measure a network’s commitment to upgrade its features and a high value could encourage greater adoption.
In Avalanche’s case, subnets were driving development activity.
Read Avalanche’s [AVAX] Price Prediction 2023-24
Subnets see demand
According to a Web 3 investor and advisor, the amount of AVAX staked on Avalanche’s subnets rose to 120,000, at the time of the tweet, which represented an increase of 33% from the previous day.
As a result, the subnet stake’s overall percentage of the total stake increased to 0.188%. Moreover, subnet validators accounted for more than 12% of the total validator count as of 16 May. All these indicators pointed toward the rapidly growing demand for subnets.
— :omer (@demirelo) May 16, 2023
Subnets are the preferred scaling solution for Avalanche which allows users to create and deploy application-specific blockchain networks.
Platforms have a lot to gain from leveraging these app-specific blockchains if they want more control over infrastructure, such as employing native tokens for transaction fees.
On the network activity front, the active addresses on all Avalanche subnets started to recover after falling sharply from its 7-month peak on 11 May.
On the other hand, after trending sideways since the latter part of April, the number of transactions dropped precipitously on 16 May.
Avalanche launches new NFT marketplace
Apart from its growing network of subnets, the Avalanche ecosystem also took steps in expanding its NFT landscape. In a recent tweet, Avalanche announced the launch of a new NFT marketplace, Peek NFT, which will focus on hosting NFTs that have demonstrable utility.
A new AVAX NFT marketplace & launchpad is coming from @AvalaunchApp – specializing in NFTs with utility.
Details in their announcement below. ? https://t.co/kAjkAsiyFA
— Art on Avalanche (@ArtOnAvax) May 16, 2023
The announcement could just be the catalyst Avalanche’s ailing NFT space was looking for. As evident from Santiment’s data, the NFT sales volume and the transaction count have contracted significantly since late March.
Realistic or not, here’s AVAX’s market cap in BTC terms
Investors turn bearish
The continuous fall in AVAX price prompted investors to bet on further losses. As per data from Coinglass, the number of short positions taken for the coin increased vis-à-vis long positions.