The fourth quarter (Q4) of 2023 brought about significant growth for Avalanche (AVAX), with the blockchain platform making substantial strides. According to a report from Messari, AVAX emerged as one of the top performers in the crypto space, driving the protocol to achieve remarkable gains in various key metrics.

Record-Breaking Milestones For Avalanche

The report reveals that AVAX experienced a substantial increase in its market cap, surging by 344% quarter-over-quarter (QoQ) and 326% year-over-year (YoY), reaching $14.4 billion by the end of the year. This remarkable growth boosted AVAX’s market cap rank among all tokens from 20 to 9, marking an impressive climb of 11 spots (currently standing 10th, behind Cardano (ADA).

The surge in market cap was primarily driven by the increase in inscriptions, particularly Avascriptions (ACS-20 tokens). The on-chain call data transactions experienced a significant boost, leading to a substantial increase in revenue. Avalanche witnessed a surge in revenue, with a 2,874% increase measured in USD, from $1.9 million to $56.5 million from November to December.

The significant increase in revenue was accompanied by a 450% QoQ surge in daily transactions, with the majority being driven by the emergence of Avascriptions. Avalanche’s C-Chain experienced a record-breaking 6.3 million transactions, with nearly 6.1 million being inscriptions, marking the highest number of transactions ever recorded in a single day for Avalanche.

While C-Chain saw a 50% QoQ decrease in daily active addresses, primarily due to decreased activity on LayerZero, the report highlighted a significant increase in active validators, growing 20% QoQ from 1,374 to 1,651 validators. According to Messari, this growth in validators, coupled with an 11% QoQ increase in AVAX stakes, indicates a promising long-term appetite for AVAX in the coming year.

Avalanche’s TVL Surges 78%

Avalanche’s Total Value Locked (TVL) denominated in USD experienced a substantial 78% QoQ increase, reaching $1.03 billion by the end of Q4 2023, positioning Avalanche as the 7th chain by TVL, denominated in USD. However, TVL-denominated in AVAX decreased by 71% QoQ, primarily due to AVAX price appreciation driving the increase in USD-denominated TVL.

The report also highlighted the performance of various protocols on Avalanche. AAVE, the largest protocol by TVL, witnessed a 60% QoQ growth, while Benqi and Trader Joe demonstrated strong gains of 205% and 131% QoQ, respectively. Together, these three protocols accounted for 79% of Avalanche’s TVL, showcasing their dominance in the ecosystem. Smaller-sized protocols, such as Pangolin and GMX, also showcased impressive growth, while Balancer, aided by Benqi’s sAVAX liquidity pool, attracted significant TVL on Avalanche. Q4 further witnessed a surge in average daily DEX volumes, rising by 245% QoQ.

Analysis of the 1-day chart reveals that Avalanche’s token trading pair AVAX/USD experienced significant growth during Q4, breaking free from a prolonged period of sideways price action. However, following a notable uptrend that propelled the token to reach $50, its highest level in 20 months, on December 24, AVAX underwent a sharp correction, plunging to the $27 price level. The cryptocurrency has rebounded in response to Bitcoin’s (BTC) rally and the prevailing bullish sentiment in the market. Over the past fourteen days, AVAX has witnessed a 13% price increase, currently reclaiming the $40 zone.

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FAQs

What contributed to Avalanche’s significant growth in Q4 2023?

Avalanche experienced significant growth in Q4 2023, primarily driven by a surge in market cap, revenue, and active validators. The emergence of Avascriptions and a surge in daily transactions were key contributing factors.

How did Avalanche perform compared to other protocols in terms of TVL?

Avalanche’s Total Value Locked (TVL) denominated in USD surged by 78% QoQ, positioning it as the 7th chain by TVL. The report highlighted the dominance of protocols like AAVE, Benqi, and Trader Joe, which accounted for 79% of Avalanche’s TVL.

What were the key developments in Avalanche’s token price during Q4 2023?

Avalanche’s token trading pair AVAX/USD experienced significant growth during Q4, breaking free from a prolonged period of sideways price action. The cryptocurrency reached its highest level in 20 months but underwent a sharp correction before rebounding amidst Bitcoin’s rally and prevailing bullish sentiment in the market.