[Recap] Avalanche Q1 2024 State of the Ecosystem

Date and Duration: Tue, Jan 16, 2024 - 1:00:44
Speakers:
- Heidi Pickett, Chief of Staff & Senior Vice President of Strategic Initiatives, The Tie (Host)
- Morgan Krupetsky, Senior Director of Business Development Institutions and Capital Markets, Ava Labs
- Luigi D’Onorio DeMeo, Vice President of Business Development and Ecosystem, Ava Labs

This webinar, hosted by Heidi Pickett, features Morgan Krupetsky and Luigi D’Onorio DeMeo, as they discuss key topics:

You can watch the full Webinar here:

In 2023, Avalanche experienced notable expansion across various sectors through partnerships with companies like AWS, Shopify, and TSM. These collaborations demonstrate the versatility of blockchain solutions in different industries, where traditional businesses are either integrating parts of their operations onto blockchain or developing blockchain-enabled services.

Ava Labs' business development process involves extensive relationship building, often taking months or years, and can include high-touch infrastructure, education, and advisory support. 

In 2024, Ava Labs will focus on tokenizing financial and non-financial assets in gaming, decentralized finance (DeFi), social finance, and various consumer applications. Their overarching goal is to achieve mass adoption by making blockchain technology accessible and useful to users who are not yet familiar with crypto.

JP Morgan and Citi have developed notable solutions on the Avalanche blockchain. Both of these projects fall under the scope of Project Guardian by the Monetary Authority of Singapore, which facilitates large buy and sell-side institutions in advancing various blockchain initiatives including tokenization and on-chain finance.

In collaboration with Apollo and WisdomTree, JP Morgan's project focused on testing smart contracts as a vehicle for access to  alternative assets like private equity and real estate. These alternative assets can be managed and traded on the same infrastructure used for payments.

Citi's initiative involved bilateral foreign exchange requests for quotes and trade execution. This project brought on board Fidelity International and T. Rowe Price as clients. It utilized three Avalanche subnets to facilitate trade requests and quotes and record on-chain price quotes. This infrastructure provided robust post-trade analytics and auditability.

Republic also launched the Republic Note on the Avalanche blockchain, allowing retail investors to access previously inaccessible investment opportunities. The Republic ecosystem offers exposure to diverse industries and companies raising funds through their portal and access to Republic Capital, their venture investment arm. Furthermore, Republic listed the Republic note on INX, marking one of the first instances where a real-world asset has been launched and actively traded on a secondary marketplace, showcasing a new frontier in asset tokenization and trading.

When asked about Avalanche's appeal to large institutions, Morgan replied that it lies in its subnet customizability, especially with its evergreen subnets. Evergreen subnets combine the advantages of public blockchain infrastructure, such as DeFi innovation and extensive developer communities, while catering to the nuanced regulatory compliance and other considerations that drive institutions toward enterprise-focused blockchain solutions. Avalanche also stands out for use cases that demand high throughput or near-instant settlement, like high-frequency trading. 

Avalanche has further differentiated itself by introducing Avalanche Vista, a $50 million fund dedicated to real-world assets (RWAs). This fund signifies Avalanche's commitment to expanding the scope and accessibility of blockchain technology in traditional asset markets, bridging the gap between conventional finance and the burgeoning world of decentralized finance.

Avalanche has made significant strides in the gaming sector. A key aspect of Avalanche's appeal in the gaming industry is its emphasis on asset ownership, a concept highly valued in gaming and crypto communities. This synergy and the customizability of Avalanche's subnets make it an attractive platform for game developers and players.

Notably, 12 games have already signed up to operate on the Beam subnet, showcasing the growing interest and adoption within the gaming community. In addition, the TSM subnet and games like Shrapnel and Gunzilla's Off the Grid further exemplify Avalanche's growing influence in the gaming world.

Avalanche is making significant strides in DeFi and foreign exchange (FX) markets by tokenizing non-dollar-denominated stablecoins and reducing transaction costs, especially for cross-border payments. Traditional financial rails often incur high fees for currency conversion, but Avalanche's blockchain technology enables these transactions at a fraction of the cost, usually just a few basis points.

Avalanche's unique contribution to DeFi lies in developing subnets to reduce fees and eventually facilitate cross-subnet communication and unified liquidity. To support the growth of its DeFi ecosystem, Avalanche is actively backing native builders and projects, including projects like Dexalot, a central limit order book exchange, and Hubble, a perpetual swap exchange. 

Avalanche has seen significant growth in the Non-Fungible Token (NFT) market, driven by strategic initiatives and programs including:

Many platform developments coming in the near year can help Avalanche realize greater adoption. 

Luigi was especially excited about the Codebase program, similar to an Avalanche-specific Y-Combinator, which is set to be a major catalyst for the Avalanche ecosystem. Each cohort will consist of 10 to 15 teams, each receiving a $50,000 stipend to support their participation over three months. Additionally, teams can compete for up to $400,000 in prizes at the cohort's conclusion. Beyond financial incentives, participants gain valuable networking opportunities and marketing exposure associated with their projects.

Another exciting point of focus, Morgan pointed out, is on Real-World Assets (RWAs) outside of the financial and securities sector. There's a growing interest in leveraging blockchain to trade non-security RWAs such as wine, whiskey, trading cards, and luxury watches. 

Watch the full Webinar here:

This report is for informational purposes only and is not investment or trading advice. The views and opinions expressed in this report are exclusively those of the author, and do not necessarily reflect the views or positions of The TIE Inc. The Author may be holding the cryptocurrencies or using the strategies mentioned in this report. You are fully responsible for any decisions you make; the TIE Inc. is not liable for any loss or damage caused by reliance on information provided. For investment advice, please consult a registered investment advisor.