Avalanche Surges, GameFi bull run incoming?

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By A D

Avalanche’s native cryptocurrency, AVAX, has seized the spotlight with an impressive 112% surge, soaring to $20, marking its highest point since April. This notable spike is attributed to a GameFi renaissance on the Avalanche blockchain.

The AVAX journey in 2021 witnessed a peak of $146.22 in November, followed by a tumultuous descent to a low of $10.90 in December 2022. Despite the rollercoaster, a November turnaround positioned AVAX at $17.79.

A pivotal moment in AVAX’s recent ascent occurred when it broke above the crucial $16 resistance on November 11. This breakout not only signified a turning point but also triggered a substantial buying spree. This momentum gained further traction as AVAX retraced to $16, solidifying its former resistance as a robust support level. This technical shift has significantly contributed to the prevailing bullish trend.

AVAX(Avalanche) price chart
AVAX is currently trading at $22, testing a crucial support level. Image Source

Building on this momentum, recent collaborations and institutional adoption have added substantial impetus to AVAX. The coin’s price, now at $22.3, showcases an 8% surge in the last 24 hours, affirming its resilience and growing prominence. With a market cap of $8.03 billion, AVAX has emerged as the 13th largest cryptocurrency, demonstrating its renewed strength.

Republic’s collaboration with Avalanche to introduce the Republic Note, a digital asset focused on profit-sharing and democratizing private market investing, adds another layer to AVAX’s expanding ecosystem.

Technically, AVAX’s current position above $22, coupled with robust support at $20.50, paints a positive picture. Resistance at $24.50 and $25, if breached, could trigger a substantial surge, potentially exceeding 20% towards the $30 level. Conversely, support at $22.50 and $20.50 acts as a buffer against downside corrections.

Noteworthy partnerships, such as the collaboration with JP Morgan and Apollo Global, underscore AVAX’s increasing utility in blockchain projects. The adoption by City, a global bank, of Avalanche’s AVAX Cloud for blockchain applications further amplifies AVAX’s significance.

What is Avalanche?

Avalanche positions itself as a high-performance, scalable, and secure blockchain with three primary use cases. These include building application-specific blockchains, launching decentralized applications (Dapps), and creating complex digital assets with custom rules.

Avalanche’s utilization of a Proof-of-Stake (PoS) consensus mechanism highlights how transactions and block verifications are based on participants’ AVAX holdings. The Contract Chain, Exchange Chain, and Platform Chain facilitate various functionalities within the Avalanche ecosystem.

Avalanche distinguishes itself with sub-second finality times, transaction fees of less than a penny, and an impressive portfolio boasting over 600 projects deployed on its network. The blockchain’s commitment to speed, scalability, and customizability positions it as a formidable player in the crypto space.

Recent Developments In The Avalanche Ecosystem

In a surprising turn of events, Ava Labs’ recent layoffs, impacting 12% of the team, have paradoxically bolstered investor confidence. The strategic move, as explained by Avalanche founder Emin Gün Sirer, aims to reallocate resources and prioritize ecosystem growth amidst the challenges posed by the recent crypto bear market.

Avalanche’s collaboration with JPMorgan’s blockchain arm, Onyx, within the scope of Project Guardian, adds another layer to its growth narrative. The project explores how tokenization can enhance the management of financial assets, allowing fund managers to tokenize portfolios on chosen blockchains. The involvement of Provenance Blockchain, Onyx Digital Assets, Axelar, and Oasis Pro in this initiative reflects a broader industry acknowledgment of Avalanche’s capabilities.

The partnership with JPMorgan aligns with Avalanche’s broader mission to digitize and tokenize global assets, marking a significant stride in reshaping traditional financial processes. Avalanche’s Evergreen subnets play a pivotal role in facilitating this collaboration, acting as individual blockchains tailored to meet institutional needs. Moreover, Avalanche’s foray into fractionalized real estate further expands its niche within the crypto space.

Will GameFi Score Big in The Next Bull Run?

The stage is set for 2023 to be the year of GameFi, with Avalanche emerging as a potential powerhouse in the blockchain gaming war. Traditional gaming and blockchain converge, driven by Play-to-Earn tokens, signifying a transformative gaming era, with significant shifts on the horizon. Investors prepare for the P2E bull market as strategic partnerships, network migrations, and institutional focus highlight Avalanche and innovative platforms shaping gaming’s future.

As we navigate the P2E bull market, the focus on alternative layer one tokens shifts to Play-to-Earn tokens and GameFi. The infrastructure upgrades during the bear market have paved the way for on-chain gaming experiences. Protocols building ecosystems around their games emerge as crucial players in the impending GameFi revolution.

The Web3 Gaming Industry Now:

81% of current blockchain games leverage non-gaming focus layer one solutions, necessitating a move towards layer twos for scalability. 74% of games opt for EVM Networks, with Binance Smart Chain and Polygon leading the charge. 60% of games leaving a layer one network shifted to a layer two scaling solution due to fee-related concerns.

Recent Developments:

  • Avalanche gains prominence as the go-to choice for AAA game studios, creating an environment ripe for blockchain innovation. The platform’s unique capabilities and developer-friendly ecosystem position it as a catalyst for the transformative intersection of gaming and decentralized technologies.
  • Facilitated by Avalanche, the Fusion Gaming Hub achieves a historic milestone as the first Web3 gaming platform available for download on the Microsoft Store. This feat not only underscores Avalanche’s technological prowess but also signifies a momentous step in bridging the gap between blockchain and mainstream gaming.
  • The collaboration among Ubisoft, Immutable, and Avalanche gains prominence, marking a pivotal step towards mainstream blockchain acceptance in gaming. Avalanche’s inclusion in this strategic partnership reinforces its pivotal role in driving the industry-wide shift towards decentralized gaming experiences.
  • Star Atlas, a space-themed RPG launched in 2021 on the Solana blockchain, has recently expanded its universe with the introduction of SAGE Labs. This early-access, browser-based web3 space economy game immerses users in a digital universe for resource gathering, crafting, and trading activities.

A Recap Of The GameFi Market in 2022

The GameFi landscape in 2022 was marked by its complexity, with numerous projects vying for attention and investment.

  • GameFi transactions peaked during the week of July 17–23, totaling 184.5K transactions. The largest monthly drop in volume, approximately 62%, occurred from April to May, coinciding with Terra Luna’s significant collapse in May. The most substantial monthly increase in volume, 28%, transpired from July to August.
  • As of December 2022, there were 62 active GameFi projects and 1,478 inactive ones. STEPN garnered the highest total users among GameFi projects, reaching 1.8 million. Cryptokitties boasted the highest total users on Ethereum, amassing 112.6K users.
  • Splinterlands and Alien Worlds led in active users, each dominating the leaderboard for six out of twelve months. Farmers World secured the third-highest number of active users consistently throughout the year.
  • The Sandbox experienced the most significant cash injection in a single month, gaining approximately $504M in volume in February. MOBOX demonstrated the best new user average retention rate at 56% during the peak of the market in January.
  • Wax emerged as the most active chain for GameFi in 2022, hosting 351K active users with a Daily Active User Ratio of 57%. BNB maintained dominance in the number of GameFi protocols, with 748 projects deployed on the chain.
  • Total investment in gaming surged by 84% from 2021 to 2022, despite challenges faced by the broader blockchain space. The total market cap of all GameFi tokens peaked at $25 billion on April 1st, 2022.
  • Developers launched 717 new blockchain games in 2022, mirroring the number launched in the previous year. GameFi volume reached its peak during the week of January 2–8, totaling $916.5 million.

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