[Recap] Quarterly State of Avalanche Recap: Q2 2025

On April 2, 2025, Heidi Pickett from The Tie hosted the Q2 Quarterly State of Avalanche Webinar featuring John Nahas (Chief Business Officer at Ava Labs) and Morgan Krupetsky (Senior Director of Business Development for Institutions & Capital Markets). The session covered progress post-Etna upgrade, new L1 activity, gaming expansion, stablecoin infrastructure, regulatory shifts, the Avalanche Card, and more.

Etna Upgrade: Avalanche's WordPress Moment for Blockchain

The Etna upgrade has proven to be a foundational shift for Avalanche, enabling permissionless L1s, eliminating the requirement to validate the Primary Network, and reducing L1 deployment costs by nearly 99%. C-Chain fees have also been reduced by up to 25x. John likens the Etna upgrade to blockchain’s Wordpress moment - where launching a blockchain is as easy and accessible as launching a website on WordPress. Infrastructure support has also expanded with new providers like Gelato, Zeeve, and Kaleido entering the ecosystem.

Gaming on Avalanche: The Gunzilla Effect

Gunzilla Games made waves with the launch of its AAA title Off the Grid and its token, now listed on Binance, Kraken, and Crypto.com. With over 15 million users and millions of transactions daily, Gunzilla showcases what’s possible when great gameplay is enhanced by blockchain—not defined by it. Off The Grid is on Playstation and Xbox, which distinguishes it from many other existing blockchain-based games. Other gaming developments include MapleStory Universe and Beam, which are building their own L1s, and Faraway, which is expanding Avalanche’s gaming footprint.

Inversion: Private Equity Approach Meets Blockchain

Spearheaded by Santiago R Santos, Inversion uses a private equity model to acquire real-world businesses—starting with telecom in Latin America—and integrates Avalanche L1s to improve backend operations and unlock new fintech experiences. This marks a departure from launching infra-first; instead, Inversion embeds crypto into real-world user bases from day one.

AI Layer 1: Kite AI

As John explains, Kite AI launched the first AI-focused L1 on Avalanche. Using a new consensus called Proof of Attributed Intelligence, Kite tracks and rewards contributions across models and data layers, ensuring fairness and transparency. It exemplifies the decentralized AI vision and is expected to act as the AI hub for the Avalanche ecosystem that aligns contributions from every contributor in the AI value chain in a privacy-preserving way. 

Octane Upgrade: C-Chain Performance and Liquidity Hub

Octane, the upcoming C-Chain upgrade, introduces dynamic fee adjustments and validator-driven gas targeting. This ensures predictable, low-cost gas even under heavy load. The Octane Upgrade helps solidify the C-Chain as the liquidity and data hub for the Avalanche ecosystem, where L1 tokens can be traded, borrowed against, and listed on exchanges without requiring individual integrations.

Avalanche Card: Real-World Stablecoin Utility

The Avalanche Card, powered by Rain, enables users to spend crypto or stablecoins directly without going through centralized off-ramps. As Morgan explains, it is available in the U.S. and Latin America, it offers lower foreign transaction fees and upcoming features like yield-bearing stablecoins and DeFi integrations. The card serves both Avalanche-native users and broader crypto-adopters.

Stablecoins and Open Trade Expansion

As Morgan highlights, Open Trade now supports euro-denominated IBAN accounts using Circle's EUROC stablecoin. Partner neobank Litto in Colombia enables access to both USD and Euro savings accounts. These offerings provide access to tokenized financial services, including remittances and yield-bearing accounts, abstracting away blockchain complexity for end users.

Global and Regulatory Tailwinds

As John explains, Ava Labs announced a partnership with SMBC (Sumitomo Mitsui Banking Corp), Fireblocks, and TIS to explore stablecoins and RWAs in Japan. Meanwhile, sentiment in the U.S. has improved with regulatory shifts like the repeal of SAB 121, allowing banks to custody crypto. Ava Labs continues to support jurisdiction-specific deployments. 

ETF Momentum

John notes that VanEck and Grayscale have filed for AVAX ETFs, a major signal of institutional confidence. These ETFs could significantly expand access to Avalanche by allowing exposure via traditional financial instruments like retirement accounts, RIAs, and brokerage platforms.

Avalanche Summit: London, May 20–22

The upcoming Avalanche Summit in London will bring together global builders, investors, institutions, and enthusiasts. Hosted at Hatfield House, the event aims to foster community and collaboration across sectors like DeFi, gaming, payments, AI, and more. Past Summits have focused on real-world connections over corporate conference vibes, and this year promises the same.

Looking Ahead

Morgan and John look ahead by saying that Avalanche is entering a new phase where gaming, AI, institutions, and public infrastructure projects coexist and build upon each other. With thousands of validators and new L1s emerging rapidly, Avalanche's vision of a highly interconnected, scalable, and inclusive ecosystem is starting to take form. 

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