- Avalanche user activity and revenue experienced growth in Q2.
- Its DeFi and NFT verticals suffered a decline.
House to over 350 decentralized applications (dApps), a new report from Messari revealed that Proof-of-Stake (PoS) smart contract platform Avalanche [AVAX] saw growth in its key ecosystem metrics and some corresponding minor declines in Q2 2023.
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Titled “State of Avalanche Q2 2023,” the on-chain analytics firm found that the 90-day period under review was marked by an uptick in Avalanche’s user activity and revenue, the launch of new products, and a few key partnerships secured.
Avalanche and its many tales of growth
The Avalanche network consists of several chains, including the Primary Network, which includes the P-Chain, X-Chain, and C-Chain. The P-Chain is responsible for all validator and Subnet-level operations. This chain serves as the primary chain in the network and is responsible for coordinating and managing the other chains. The C-Chain is an implementation of the Ethereum Virtual Machine (EVM), while the X-Chain is responsible for operations on digital smart assets known as Avalanche Native Tokens.
Messari considered user activity across the C-Chain and 15 Avalanche Subnets and found the count of daily average active addresses increased by 107.8% quarter-over-quarter (QoQ). By the end of Q1, Avalanche recorded 30,097 as its daily average active addresses count. By the end of Q2, this surged to an all-time high of 79,167.
Source: Messari
As for the count of transactions executed daily on Avalanche in Q2, Messari noted that the C-Chain saw a substantial increase of 162.2% QoQ. The C-Chain closed the 3-month period with a daily average transactions count of 1.58 million. This was “largely due to a rise in stablecoin liquidity and LayerZero,” Messari stated.
Source: Messari
On the other hand, transactions across subnets declined by 33.4%. This decline was primarily driven by a significant decrease of 31.7% in transactions on the DFK (DeFi Kingdoms) subnet.
Regarding network financials, Avalanche recorded revenue growth of 173.1% QoQ. This was due to an uptick in the chain’s user activity during that period. Likewise, the average transaction fee on the chain also jumped by 5.9%, contributing to the astronomical growth in revenue.
“The increase in revenue was partly due to a 5.9% increase in transaction fees, but it was primarily due to the activity stemming from LayerZero. Additionally, the spike in revenue in late April was driven by XEN Crypto, a free-to-mint token known for clogging networks. Given that Avalanche burns 100% of revenue (gas fees), the greater activity contributed to the burn of AVAX and token value accrual,” Messari found.
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Source: Messari
As for its DeFi vertical, Avalanche recorded a 19.4% decline in its total value locked (TVL) denominated in the US dollar. In contrast, its TVL denominated in AVAX rose by 9.7%. According to Messari, this suggested that “new capital inflow drove TVL versus asset price increases in USD.”
Lastly, as for its NFT ecosystem, there was a 38.3% shortfall in secondary sales volume and a 50% decline in unique NFT buyers on the chain in Q2.
