On-chain data continues to reach new highs; how can the Avalanche ecosystem "build a nest to attract phoenixes" amidst a sluggish market?

Since the fourth quarter of 2025, Avalanche's on-chain popularity has rebounded and its institutional implementation has progressed almost simultaneously.

On one hand, mainnet activity metrics repeatedly hit new highs at the end of the year and in January; on the other hand, events focusing more on institutional workflows and compliant distribution emerged in rapid succession. Even with a poor market, the story of asset tokenization continues to unfold at an accelerated pace.

Institutionalization promotes asset on-chaining

In January 2026, Galaxy Digital, a well-known crypto investment bank, announced the successful issuance of its first tokenized loan obligation (CLO) on Avalanche, with a total size of $75 million, of which $50 million was subscribed by institutional credit protocol Grove.

CLOs are structured credit products that package corporate loans and sell them to investors with varying risk profiles. The debt tranches are tokenized and issued by the regulated digital asset platform INX through the Avalanche network, and then traded with accredited investors.

This investment represents Grove's second major deployment on the Avalanche platform. Last July, Grove announced its launch on Avalanche, with an initial deployment strategy aimed at issuing approximately $250 million worth of Real-World Assets (RWA) on the network. Grove allocated funds to JAAA, issued on the Centrifuge native blockchain, and will distribute this token on the Avalanche C-Chain.

As a high-performance public chain designed specifically for institutional finance, Avalanche boasts advantages such as EVM compatibility, rapid deployment, and access to compliant distribution channels. In addition, it features the rapid deployment of customizable Avalanche L1 (Subnet), which is more conducive to meeting requirements such as accessibility, compliance, performance, and risk control. As a result, it has become one of the high-quality partners for financial institutions to deploy on-chain solutions.

For example, New Jersey-based real estate infrastructure company Balcony announced last May that it had deployed a scalable, dedicated Avalanche L1 service using the AvaCloud platform, aiming to digitize and tokenize title records for over 370,000 land parcels with a total value of approximately $240 billion. AvaCloud is the managed blockchain service provider for Avalanche L1, assisting enterprises in building, deploying, and scaling Layer-1 networks.

The "Two Extremes" of Data

Avalanche's institutionalization strategy has led to steady growth in its on-chain assets. According to Token Terminal data, the total market capitalization of stablecoins and tokenized funds on the Avalanche mainnet has increased by approximately 70% in the two years since January 2024.

According to data from RWA.xyz, as of January 21, the Avalanche network's stablecoin assets exceeded $2.2 billion, and RWA's total assets exceeded $1.351 billion—of which Distributed Assets accounted for approximately $636 million and Represented Assets accounted for approximately $715 million.

Distributable assets refer to tokenized assets that can be transferred peer-to-peer between wallets, focusing on market coverage, financial inclusion, and platform interoperability; represented assets, on the other hand, do not allow the assets to be transferred outside the issuing platform, and the blockchain network mainly serves as a shared ledger for accounting, clearing and settlement.

In December 2025, the total L1 transaction volume on the Avalanche network surpassed 10 billion. With this milestone, the ecosystem officially began its recovery at the end of the year. That month, Avalanche C-Chain set new records for the highest single-day and single-week performance in 2025, with 651.2 million active addresses and a weekly inflow of $43 million, briefly ranking second among all blockchains.

Entering the new year, Avalanche continued its growth momentum from the end of last year, with its main network (primarily C-chain, with P-chain and X-chain) seeing daily active addresses reach new highs, peaking at 1.71 million on January 18.

However, if we shift our focus from on-chain hype back to asset pricing and DeFi activity, we don't see a similarly large "recovery curve." According to CoinGecko market data, from mid-January to the present, the closing price of AVAX has fluctuated roughly between $12 and $15, closing at approximately $12.09 on January 20, marking its lowest value since November 2023.

Looking at DeFiLlama's chain-level metrics, Avalanche's native TVL is approximately $1.66 billion, and its bridged TVL is approximately $3.62 billion. Meanwhile, on-chain fees/revenue remain relatively low on a daily basis, which means that even if the number of transactions and addresses increases, it may not correspond to a substantial capture of protocol-level value.

However, considering the macroeconomic situation, cryptocurrencies, especially L1 tokens, have generally been under pressure throughout the year. Even with institutional collaborations or technological advancements in the ecosystem, the pricing issues of Avalanche are not unique to it, as they are overshadowed by stronger market betas and the long-standing problem of a lack of large-scale applications.

Attracting Talent by Building a Nest: Launching a Million-Dollar Construction Competition

For infrastructure, a downturn is also a good time to accumulate strength and make a breakthrough, allowing for more focused attention on ecological development.

Capitalizing on the recent resurgence in on-chain activity, Avalanche has significantly increased its efforts to support developers. On January 21st, the Avalanche Foundation announced the launch of the "BuildGames" builder competition, offering a total prize pool of $1 million. The competition will run for six weeks, with registration opening immediately and undergoing rolling review. There are no specific directions or restrictions on types or tracks within the competition. Outstanding teams will also have the opportunity to receive further guidance and funding from Avalanche's official incubation program.

From the foundation's existing system, Avalanche's developer support does not rely solely on attracting new users through a single competition, but is broken down into several parallel pipelines.

One is the official accelerator Codebase, which focuses on providing rapid mentoring and non-dilutive funding support to early-stage teams. Selected teams can receive a $50,000 grant and receive practical support ranging from product and token design, validator/infrastructure strategies, growth, and compliance.

Secondly, there's the foundation's Grants system, which focuses on allocating funds to infrastructure and AI projects. Finally, there's Retro9000, officially described as a $40 million funding pool, used to reward teams that have already achieved tangible deliverables and impact on Avalanche L1 or key toolchains, lowering the barrier to "funding first, then delivering" and directing resources towards builders who have proven their value.

At the infrastructure level, Avalanche completed the network upgrade codenamed "Granite" at the end of last year. This upgrade consists of three ACPs (ACP-181/204/226). The Granite upgrade introduced dynamic block times, biometric authentication, and a more stable validator view, improving the reliability and performance of cross-chain messaging.

Overall, the Avalanche ecosystem has introduced institutional scaling capabilities over the past month, laying the foundation for development in 2026 with the construction of infrastructure and developer incentives.