On-chain data hits new highs. In a sluggish market, how does the Avalanche ecosystem "build nests to attract phoenixes"?

Original: Zen, PANews

Since Q4 2025, Avalanche’s on-chain activity has almost simultaneously rebounded and been adopted by institutions. On one side, mainnet activity indicators hit multiple new highs at the end of the year and in January; on the other, a series of events focused on institutional workflows and compliance distribution have emerged intensively. Even in a poor market, the story of assets going on-chain continues to accelerate.

Institutionalization Drives Asset On-Chain In January 2026, the well-known crypto investment bank Galaxy Digital announced the successful issuance of its first tokenized loan claim (CLO) on Avalanche, with a total scale of $75 million, of which $50 million was subscribed by the institutional credit agreement Grove.

CLO is a structured credit product that packages corporate loans and sells them to investors of different risk levels. Its debt tranches are tokenized and issued via the regulated digital asset platform INX on the Avalanche network, offering trading to qualified investors.

This investment is actually Grove’s second large-scale deployment on the Avalanche platform. In July last year, Grove announced the launch on Avalanche, with an initial deployment strategy aiming to issue up to approximately $250 million in real-world assets (RWA) on the network. Grove allocated funds to JAAA issued via the multi-chain protocol Centrifuge’s native chain, and the share tokens were issued and circulated on Avalanche C-Chain.

As a high-performance public chain designed specifically for institutional finance, Avalanche offers advantages such as EVM compatibility, rapid deployment, and access to compliant distribution channels. Additionally, Avalanche emphasizes quick deployment of customizable Avalanche L1 (atomic subnetworks), which better meets requirements for access, compliance, performance, and risk control, making it one of the top-tier financial institutions on-chain.

For example, Balcony, a New Jersey-based real estate infrastructure company, announced in May last year that it used the AvaCloud platform to deploy a scalable, dedicated Avalanche L1 service, aiming to digitize and tokenize property records worth about $240 billion across over 370,000 land parcels. AvaCloud is a hosted blockchain service provider for Avalanche L1, assisting enterprises in building, deploying, and scaling Layer-1 networks.

Data Shows “Two Extremes” Avalanche’s institutional route has contributed to steady growth in its on-chain assets. According to Token Terminal data, the total market cap of stablecoins and tokenized funds on Avalanche’s mainnet has increased by about 70% over two years since January 2024.

Data from RWA.xyz shows that as of January 21, Avalanche’s stablecoin assets exceeded $2.2 billion, and RWA assets totaled over $1.351 billion — including approximately $636 million in Distributed Assets (tokens that can be transferred peer-to-peer between wallets) and about $715 million in Represented Assets (assets that cannot be transferred outside the issuing platform). Distributed Assets focus on market coverage, inclusive finance, and platform interoperability; Represented Assets serve more as shared ledgers for accounting, clearing, and settlement, with blockchain networks acting as a shared record.

By December 2025, total transactions on all Avalanche L1s surpassed 10 billion. With this milestone, the ecosystem officially entered a recovery phase at the end of the year. In that month, Avalanche’s C-Chain set new records for the highest single-day and weekly transaction counts in 2025, with active addresses reaching 651.2 million, weekly capital inflows of $43 million, ranking second among all blockchains at one point.

Entering the new year, Avalanche continued its growth momentum from late 2025. Its mainnet (primarily C-Chain, with P-Chain and X-Chain also active) saw consecutive new highs in daily active addresses, peaking at 1.71 million on January 18.

However, if we shift focus from on-chain activity to asset pricing and DeFi activity, the “recovery curve” is not as evident. According to CoinGecko data, from mid-January to now, AVAX’s closing price has fluctuated roughly between $12 and $15, closing at about $12.09 on January 20 — the lowest since November 2023.

Looking at chain-level metrics from DeFiLlama, Avalanche’s native TVL is approximately $1.66 billion, with bridged TVL around $3.62 billion. Meanwhile, on-chain fees/revenue remain relatively low daily, indicating that even with increasing transaction and address counts, protocol-level value capture may not be proportionate.

Considering macro factors, cryptocurrencies, especially L1 tokens, have generally been under pressure over the past year. Even with institutional collaborations or technological progress within the ecosystem, stronger market beta and the longstanding issue of lack of large-scale applications overshadow Avalanche’s pricing. Its valuation issues are not unique.

Building a Nest to Attract Phoenixes, Launches $1 Million Builders Competition For infrastructure, a bear market is also a good time to accumulate strength and focus on ecosystem development without distraction.

Taking advantage of the recent rebound in on-chain activity, Avalanche has intensified its developer support initiatives. On January 21, the Avalanche Foundation announced the launch of the “BuildGames” builder competition, offering a total prize pool of $1 million. The competition is set for six weeks, with a rolling review process, and opened for registration immediately. The competition has no specific theme or track restrictions. Outstanding teams may also receive follow-up guidance and funding from Avalanche’s official incubation program.

From the foundation’s existing support system, Avalanche’s developer support is not just a one-time event but split into several parallel channels. One is the official accelerator Codebase, which focuses on rapid mentorship for early-stage teams and non-dilutive funding support. Selected teams can receive $50,000 in funding and practical support covering product development, token design, validator/infrastructure strategies, growth, and compliance.

Second is the foundation’s Grants program, mainly targeting infrastructure and AI-related projects. Lastly, Retro9000, with an official fund pool of up to $40 million, aims to reward teams that have already delivered tangible results and impact on Avalanche L1 or key toolchains, lowering the barrier of “funding before delivery” and favoring builders with proven value.

On the infrastructure side, Avalanche completed a network upgrade codenamed “Granite” at the end of last year, consisting of three ACPs (ACP-181/204/226). The Granite upgrade introduced dynamic block times, biometric authentication, and a more stable validator view, improving cross-chain message reliability and performance.

Overall, in the past month, Avalanche’s ecosystem has incorporated institutional-scale capabilities. With infrastructure development and developer incentives, it has laid a solid foundation for growth into 2026.