Avalanche (AVAX) is a relatively new tier one solution with a considerable pricing and adoption increase recently. DeFi and NFT concepts have gained traction as a result of the creation of smart contracts in the Bitcoin and Ethereum blockchain networks.
The platform has seen significant development in terms of value and adoption. It happened mostly because Ethereum, the most popular smart contract platform, has suffered with high costs and inefficiency.
According to data from TradingView, the AVAX token increased by more than 200 percent from a low of $12.24 on Aug 3.AVAX’s trading volume has surpassed $1.4 billion, and the stock is currently trading at $42.37. On August 20, it reached a high of almost $49.80.
Reasons behind AVAX Price Rally
AVAX’s quick growth in the DeFi ecosystem is the major reason for its success. It’s a $180 million liquidity mining incentive programme announced via Twitter on August 18. This initiative permits new applications to be added to the platform’s DeFi ecosystem.
The bullish momentum of AVAX might also be due to the release of the Avalanche Bridge (AB) on July 29. Assets can be transferred between the Ethereum and Avalanche networks with this application. Over $100 million in token value was exchanged between the two networks within two weeks of the introduction.
AVAX’s success is also due to its excellent burning method, which regularly reduces the token’s supply. The platform burns transaction costs and greatly aids the project’s community.
If Ethereum is unable to handle the high transaction costs in the near future, assets and liquidity will likely continue to flow to chains like Avalanche as their DeFi ecosystems develop in size and value.