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Home»ALTCOIN NEWS»How Avalanche Became the 9th Largest Cryptocurrency in Q4 2023
ALTCOIN NEWS

How Avalanche Became the 9th Largest Cryptocurrency in Q4 2023

By Crypto FlexsFebruary 16, 20243 Mins Read
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How Avalanche Became the 9th Largest Cryptocurrency in Q4 2023
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  • Interest in Avascriptions has led to an increase in transactions.
  • The supply of active addresses and stablecoins on the blockchain has decreased.

Moving up 11 spots from 20th to 9th by market capitalization is just one of the landmarks for Avalanche (AVAX) in the fourth quarter of 2023. During the same period, blockchain has also seen growth in other aspects. But that doesn’t mean there weren’t pitfalls.

AMBCrypto’s assessment of the fourth quarter report prepared by blockchain research firm Messari found that Avalanche’s daily transactions increased by 450%. The report noted that the introduction of Avascriptions was responsible for this increase.

Avascription is the inscription on the Avalanche C-Chain.

Inscriptions lead the way, but they are not enough

In the report, an inscription mimicking the Bitcoin ordinal appeared in November. By December 20, the blockchain had recorded daily revenue of $10.6 million. This is primarily due to increased demand for AVAX as interest in Avascription grows. The report read as follows:

“C-Chain hit an all-time high of 6.3 million transactions on November 22, surpassing the previous high of 1.1 million on January 27, 2022. Of these 6.3 million transactions, nearly 6.1 million were unsolicited.”

However, the increase in transactions did not automatically translate into a surge in active addresses. According to the assessment, the number of active addresses on the chain decreased from 89,400 to 44,400. This represents a 50% reduction. Nonetheless, the research company was able to determine the cause.

Source: Messari

According to Messari, Avalanche’s decline in user activity is related to growing interest in LayerZero. Like Avalanche, LayerZero also uses a sidechain structure. However, the latter focuses on cross-chain communication between more than 50 blockchains.

The main reason Avalanche lost users wasn’t the fundamentals of the project. Instead, there was a perception that LayerZero would soon announce an airdrop and launch a native token. Therefore, users flocked to the network so that they could become part of the eligible addresses.

Security is improved and the stables look the other way.

Meanwhile, Avalanche’s active validators increased by 20% during the quarter. When the fourth quarter began, the number of active validators was 1,374. But by the end of the year, that number had risen to 1,651. The Nakamoto coefficient improved with increasing

The Nakamoto coefficient is the number of node operators that control a large portion of the network. So the increase meant the Avalanche were increasingly resistant to attacks.

However, the supply of stablecoins on the chain has decreased. BTC.b, the token representing Bitcoin, also saw a decline in usage. The report noted:

“Despite the surge in the second quarter, the supply of BTC.b decreased by 12% year-on-year, from 4,271 BTC.b to 3,777 BTC.b in 2023. This decline can be partially attributed to the emergence of the 2023 ordinal number and the broader Bitcoin ecosystem. Avalanche’s stablecoins also ended 2023 down 30% year-on-year, from $1.56 billion to $1.09 billion.”

Chart showing how stablecoin supply decreased on Avalanche

Source: Messari


How much is 1,10,100 AVAX worth today?


There seems to be more for blockchain to achieve in the future. If things go according to plan, Avalanche could become a behemoth in the gaming and real-world assets (RWA) segment of the ecosystem.

The reason for this prediction may have to do with its association with some traditional institutions and its development with NFTs.

Next: Analysts Predict BlockDAG Will Get 5000x ROI Investors flock to BDAG pre-sale

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