Major Funding Round Drives Avalanche to New Heights
This Avalanche (AVA), is going up, up, and away. Avalanche announced on Twitter this morning that they have raised some major funds from some major players–over $230 million. This has sent the token up past all-time highs, surging beyond $67 and now hovering around there.
?? BIG News ??@Polychaincap and Three Arrows Capital led a $230M investment in the #Avalanche ecosystem to support growth of the platform.https://t.co/T141NFEoIG
— Avalanche ?? (@avalancheavax) September 16, 2021
The investors included Polychain capital, for example, which is a mover and shaker in the space. Olaf Carlson-Wee, the head at Polychain, and former very first ever employee of Coinbase led this funding round, which was done in exchange for AVA tokens. According to the announcement, Avalanche will be using these funds to pour into their DeFi ecosystem and other applications.
Founder of Ava Labs, Emir Gün Sirer, said the funding will “include grants, token purchases and other forms of investment”. Sirer has even stepped down from his position at Cornell University to focus full-time on building Avalanche. He admitted that his new “war chest” provides for a “very comfortable situation”.
Emin Gün Sirer, director at the Avalanche Foundation and Ava Labs founder and CEO
Avalanche has seen explosive growth in usage over the last few months as ETH gas fees have become wholly prohibitive for most people. In light of that, faster, cheaper blockchains are becoming more and more viable.
Moreover, chains with a unique identity and scholastic bent are winning out as well, like Avalanche and Algorand, compared to say, Binance Chain, who stole the stage early in the year but have lost their luster due to being a hub for rug pulls and is known for hosting a plethora of ‘copy-pasted’ Ethereum projects.
Also, the regulatory burden on Binance is shining the spotlight on other chains. As Gary Gensler harps on crypto being a wild, wild west rife with fraud and scams, many think of what launches on Binance Chain, many of which are outright scams, worthless meme tokens, and other junk.
Now, over 225 projects are building on Avalanche, and the TVL locked on the chain is now over 1.5 billion, as Avalanche declared near the end of August.
"Avalanche saw its TVL explode to over $1.6B from about $250M in mid-August. Avalanche’s DeFi ecosystem now boasts $1.55B in TVL" – @DefiantNews https://t.co/A7QdV76Yxo
— Avalanche ?? (@avalancheavax) August 26, 2021
In August, Ava Labs announced what they called “Avalanche Rush”–a liquidity initiative of $180 million to onboard users from other DeFi platforms, and lure over other DeFi platforms themselves, a strategy that was notably similar to Polygon’s, as pointed out by Forbes. The goal or playbook of this plan was the following:
- Foundation builds tech and partnerships behind the scenes for months as everyone sticks with the consistent yield in Ethereum DeFi
- Improve bridging technology to allow for the influx of new users if/when it happens
- Aave, Curve, and SushiSwap agree to deploy on the new network and begin technical preparations to do so
- Blockchain announces incentives program w/marketing blast from blue-chip protocols launching on the network
- Thousands of DeFi power users and more casual farmers flock to this new chain to capture the new incentives
It will be interesting to see just how many users Avalanche can poach from Ethereum and Binance, and whether their own native projects will do well. We have really yet to see a major Ethereum project migrate to another chain, such as AAVE, and make a major dent.
Regardless, the growth of Avalanche is snowballing, and this could be seen as early as August 20th, when their TVL began to go parabolic, as seen below. This was likely due to their bridge, which allows assets to come over from other ecosystems, which launched on Avalanche in late July.
Avalanche also has what are called subchains, which should let them easily integrate any virtual machine or smart contracting language. This is certainly an advantage for them going forward. However, it is clear there is a lack of stable coins on the network, but when Curve launches on Avalanche, all that should change. Avalanche looks to be poised for a great winter, very fitting. As Avi Felman from BlockTower put it:
13/ All in, the makings of the next MATIC / BSC mania combined with strong long term fundamentals make $AVAX an attractive place to bet on alternative layer 1s.
— Avi ?? (@AviFelman) August 20, 2021
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Text source: CryptosRus
