Avalanche ETF: U.S. Concept Dividend Boost, Executive Shake-up and Ecological Challenges Await Resolution

Author: Nancy, PANews

In the last bull market, Avalanche, which touted as an 'Ethereum killer', achieved ecological prosperity through strategic layout in DeFi and other fields, and its market value once ranked among the top ten. However, with the cooling of the cryptocurrency market and intensified competition, the former high-performance public chain's momentum has gradually faded. Now, Avalanche is exploring new growth paths through technological upgrades, ecological expansion, and real-world application exploration. Although the on-chain activity has recently picked up, challenges loom large for its ecosystem due to management turmoil and external market pressures.

On-chain activity has rebounded somewhat, but the challenges facing the ecosystem are hard to conceal

In this round of the cryptocurrency market cycle, most L1 public chains have gradually faded out of the mainstream view, with only a few remaining active. Avalanche is no exception. The overall ecological vitality of Avalanche has significantly declined from its peak, with on-chain activities gradually declining, and key indicators such as Total Value Locked (TVL), trading volume, and user activity showing a substantial drop.

According to DeFiLlama data, as of March 11th, Avalanche's TVL is about $1.02 billion, a sharp drop of about 91.1% from its all-time high. At the same time, Avalanche's daily transaction volume has dropped sharply from 6.36 million transactions in 2023 to the current 427,000 transactions, and daily revenue has fallen from $9.72 million at the end of 2023 to about $60,000. Although the decline of the Avalanche ecosystem is not an isolated phenomenon but a microcosm of the overall weakness in the current crypto market, this series of data still reflects the severe challenges facing the scale and economic activity of Avalanche's ecosystem.

However, recent technological and ecological adjustments have brought some signs of recovery. Official website data shows that as of March 11, the daily transaction volume on the Avalanche network surged to a year-high of 4.55 million transactions, with the total number of unique addresses climbing to approximately 28.66 million. The number of daily active addresses reached 359,000 at one point this year, marking the best performance since February 2024.

In addition, Avalanche's official website and Staking Rewards data show that as of March 13, nearly 250 million AVAX tokens have been staked, with a staking ratio as high as 56.16%, making it the tenth largest PoS blockchain network.

In the community's view, the rebound of data on multiple chains may indicate that Avalanche has not completely lost its competitiveness, but the comprehensive recovery of the ecosystem still faces multiple tests. Especially in the situation where the survival space of most L1 public chains is continuously compressed, the recovery of Avalanche not only needs to rely on the improvement of the external market environment, but also requires the revitalization and breakthrough of the ecosystem.

Technology, ecology and ETF narratives resonate, and internal crises may become hidden worries

From technical upgrades to practical application landing, to the potential ETF narrative, the recent market dynamics of Avalanche demonstrate its attempt to revitalize ecosystem vitality through multidimensional efforts. However, Avalanche is also facing uncertainty due to internal governance crisis and external market pressures.

On a technical level, at the end of December 2024, Avalanche announced the launch of the Avalanche9000 upgrade, which can significantly reduce the cost of deploying 'subnetwork' blockchains and running smart contracts, while optimizing the validation mode and reducing the basic fee of the C chain (from 25 nAVAX to 1 nAVAX). Moreover, this upgrade supports independent chain operation through the 'Etna' module, significantly reducing project startup costs and meeting different regulatory requirements. It is worth mentioning that the Avalanche Foundation also raised $250 million from investment institutions such as Galaxy Digital, Dragonfly, and ParaFi Capital to support the upgrade deployment in that month, and it is expected that hundreds of primary blockchains will go live in the coming months.

Earlier this month, Avalanche also unveiled its 2025 roadmap, with key updates including the Etna network upgrade, global adoption plan Avalanche9000 Campaign, and renaming subnets to Avalanche L1 to enhance flexibility, further demonstrating Avalanche's ongoing deep optimization in technology.

On the ecological application level, Avalanche is showing a diversified development trend. On the one hand, Avalanche is polishing its own products. For example, the Avalanche core wallet Core welcomed a comprehensive upgrade at the beginning of this month, including a brand new logo, UI optimization for mobile and browser plugins. The new version is expected to be released in early spring, aiming to reduce the threshold for new users and enhance the ecological stickiness through a simplified user interface and enhanced features (such as AI-driven interaction). On the other hand, Avalanche is expanding real-world use cases. For example, in February of this year, Avalanche Visa card was launched, allowing users to use AVAX, wrapped AVAX, and stablecoins USDT and USDC at any store that accepts Visa. Additionally, Avalanche has cooperated with technology companies Republic, New York Red Bulls football team, Dantewada County in India, encryption disclosure solution provider Bluprynt, and encryption payment solution NOWPayments to implement real-world application scenarios in movies, sports, land, and payments. In addition, Avalanche is also expanding its ecological footprint. In the AI field, in addition to the Avalanche Foundation partnering with Aethir to launch a $100 million infraBUIDL(AI) Program to support ecological AI innovation projects.

As a U.S. conceptual project, Avalanche's parent company, Ava Labs, is a domestic U.S. company, benefiting from the gradual opening of the U.S. crypto regulatory environment. Ava Labs' founder and CEO, Emin Gün Sirer, revealed last year that Avalanche is in discussions with the incoming U.S. government, but the team will not flaunt political relationships with the government on social media. Instead, they will directly showcase results in 'full Avalanche style' and advise the community to 'develop plans accordingly'.

In addition, according to the company registration information of Delaware, VanEck registered 'VanEck Avalanche ETF' on March 10, 2025. In addition to Avalanche, VanEck has also applied for spot ETFs such as Solana and Ripple. Although these cryptocurrencies may attract more institutional attention and capital inflows after the ETF applications are approved, they are currently generally considered to be in a speculative phase of creating topics rather than being based on solid ecological value, making it difficult to transform into long-term growth drivers.

Despite the bright external developments, Avalanche is facing internal turmoil. According to a statement recently released by former director Omer of the Avalanche Foundation on X, including Omer, Aytunç Yildizli, and Vikram Nagrani, three directors have officially resigned from the board of directors of the foundation and its subsidiaries earlier this week. Executive director Aytunç Yildizli ceased to perform his duties on February 28, 2025. This collective resignation was a difficult decision, and since then the board has been at a standstill, trying to find a way forward. The management turmoil may affect Avalanche's strategic execution and weaken community confidence, especially during market downturns.

Overall, the current technological upgrades and real-world applications inject vitality into the Avalanche ecosystem, while the regulatory dividend in the United States and the potential of ETFs add to the imagination space. However, whether Avalanche can sound the clarion call for a counterattack depends not only on the internal practice of technology and ecology but also on the market's warming trend.