Avalanche’s AVAX Takes a $B Hit—But Its Ecosystem Just Hit Record Growth in Q1 2025

Avalanche’s native token bleeds billions as markets wobble—meanwhile, the chain’s DeFi and NFT sectors quietly rack up all-time highs. Classic crypto: the asset tanks while the builders keep stacking.

Subheader: Ecosystem Defies Token Slump

While AVAX holders panic-sold, developers deployed record-breaking dApps and institutional validators doubled down. Guess Wall Street’s ‘smart money’ still hasn’t figured out how to time the market.

Subheader: DeFi TVL Soars Amid Bloodbath

Avalanche’s Total Value Locked punched through previous ATHs—proving once again that in crypto, fundamentals and price action exist in parallel universes. Cue the VC tweets about ‘long-term horizons.’

Closing hook: Next time a token nosedives, check the chain activity. The real players are too busy building to watch charts.

• Avalanche (AVAX) market cap plunged 46.7% QoQ as fees and value saw steep declines due to protocol upgrades and falling prices.
• Avalanche’s C-Chain and L1s showed robust transaction and address growth, led by gaming and content platforms.
• DeFi metrics dropped in dollar terms but surged in AVAX, revealing deeper ecosystem engagement despite price pressure.

Avalanche’s Q1 2025 figures unveiled a paradox: plummeting market capitalization amid surging user engagement. As per the cryptocurrency intelligence platform Messari, the circulating market cap of AVAX plummeted by 46.7% on a quarter-to-quarter basis, reaching $7.8 billion.

This fall in rank among cryptocurrencies from 11th to 15th was due to a significant drop in the value of AVAX per token. Since that directly affected USD-denominated transaction fees, those fees dropped by 62.1%, from $4 million to $1.5 million, while AVAX-based fees fell by 44.7%, from 105,600 to 58,300.

The Avalanche9000 upgrade was critical in reducing the minimum base fee on the C-Chain by an astounding 96% to improve transaction throughput. While AVAX inflation remained constant at 3.9%, there was a slight increase in staking engagement from 45.6% to 46.5% of the eligible supply.

Pulsar Drives Avalanche Activity with 1.8M Daily Transactions

User activity on Avalanche Layer-1s increased significantly enough to indicate growing ecosystem engagement. Nearly all the transactions on Avalanche were driven by Pulsar, a real-time strategy blockchain game. The game recorded 1.8 million average daily transactions, growing 24% QoQ. Daily average transactions across Avalanche L1s grew by 21.3% to hit 3.4 million.

QChain was the leader with a daily transaction increase of 1,720%, whereas user addresses for Lamina1 grew by 139.5%. The two platforms accounted for two-thirds of the active L1 users. The Avalanche C-Chain was also up, with transactions increasing by 50.4% and token-related activity up 258.5%, indicating growing adoption.

DeFi and Stablecoin Metrics Show Mixed Signals

The DeFi landscape on Avalanche was of two stories. While the total value locked in USD terms fell 14.7% to $1.1 billion, TVL in AVAX tokens soared by 61.9% to 59.8 million tokens. AAVE remained the top protocol by TVL, edging up to $515.2 million from the previous month. On the other hand, TVL at Benqi and LFJ plummeted by 25% and 30%, respectively.

DEX activity decreased, reflected in the average daily volume that reduced by 17.8% QoQ. LFJ remained the leader with 50% of the total DEX volume despite a 34.2% decline. Stablecoin on Avalanche had similar dynamics, reducing from $2.3 billion to $1.9 billion. The supply of Tether alone fell by 34.5%, but USDC was an exception as it grew by 42.7% to $653.5 million.

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