What Future Holds For Ethereum Killer?

Avalanche (AVAX) has burned its way into the top-10 digital tokens list, despite the current slump in the cryptocurrency market, because of its exceptional performance. Despite a lack of interest for hazardous assets during chaotic times, Avalanche has witnessed considerable purchasing activity recently, and mood strengthened even more as investors snatched up riskier investments at reduced costs. Avalanche is a layer-one blockchain that may be used to build decentralised apps and custom blockchain networks. It’s a rival to Ethereum, with the goal of dethroning it as the most popular blockchain for smart contracts.

Roller Coaster ride for Avalanche

Avalanche has dethroned Polkadot and Dogecoin, with a market capitalization of more than $30.2 billion, and is followed by Terra (LUNA), which has a market capitalization of more than $34 billion. The token has risen more than 4,200% in the previous year, from $2.91 on December 22 to $127.42 on December 22. However, in the preceding week, it reached a high of $134.53, bringing the total increase to 4,500%.

After a Bank of America analyst note singled out Avalanche as a legitimate alternative to Ethereum owing to the platform’s “faster time-to-finality (settlement) and cheaper costs than rival blockchains,” investors have begun to pay attention to the blockchain. The token has gained roughly 80% in the last couple of weeks. It has increased by 35% in the previous week. However, the token’s volume has dropped by more than a quarter.

What Future Holds?

According to market analysts, there are several important reasons for the blockchain’s rise, both fundamentally and technically. A dramatic increase in Defi space decreased costs, and a novel protocol is among them. Tykhe Block Ventures partner Ganesh Kompella is positive on Avalanche. He views it as a potential Ethereum competitor. “It nearly tops the list of fastest-growing small platforms”, he adds, adding that once the token reaches the blue sky zone, it will reach new lifetime highs.

However, such achievement has yet to be accomplished. Despite this, as the scale and value of their Defi ecosystems rise, there’s a significant likelihood that assets and liquidity will continue to flow to chains like Avalanche.

Emin Gun Sirer, CEO of Ava Labs and inventor of Avalanche, has announced a new relationship with consulting company Deloitte to develop disaster relief software solutions based on the Avalanche blockchain. It is a clear sign, according to Kapoor of the India Blockchain Alliance, that the blockchain network and its Avax coin are receiving quick strong acceptance and investment. Avalanche aims to overcome the blockchain trilemma, which states that at scale, blockchains are unable to establish a sufficient level of decentralization. As is typically the case with Ethereum, this results in exorbitant gas fees. Before Web 3.0, Avalanche had a strong staff of cryptographers and researchers, according to Kompella.

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