The Avalanche Ecosystem: Top 3 Tokens Poised for Growth
With the arrival of spring, the seemingly dormant Avalanche network has breathed new life, signaling that interest in this blockchain is just beginning to peak. Traditionally, advancements in blockchain technology tend to positively influence not just the native token of a network but all tokens within its ecosystem.
Launched in September 2020, Avalanche has quickly climbed to become the sixth-largest blockchain in terms of total value locked (TVL), boasting $1.2 billion. It enables users to create their own blockchains, termed "subnets," which can perform specific delegated functions.
The network's native token, AVAX, is the tenth most capitalized asset in the market ($20 billion). Remarkably, AVAX exhibits minimal direct correlation with Bitcoin. For instance, in mid-March 2024, while BTC saw a decline of 0.8% and ETH dropped by 6%, AVAX experienced a 39% increase.
The price dynamics of major ecosystem tokens significantly influence the pricing of smaller capitalized assets, a trend that can be observed within the Ethereum (ETH influences ARB and OP) and Solana (SOL affects the price movement for JUP and JTO) ecosystems. This principle is equally applicable to Avalanche.
A significant portion of Trader Joe's total value locked is in the Avalanche network, amounting to $170 million. Comparatively, its TVL in Arbitrum stands at $43 million, in BSC at $1.3 million, and in Ethereum at less than $1 million.
Despite Avalaunch's depiction as a platform for decentralized token launches, it still necessitates users to:
The platform's zenith of popularity was in 2022, after which the frequency of IDOs significantly dwindled: 2023 saw just two sales, and 2024 has hosted a singular one so far. The latest sale, for the GameFi project Aether Games, concluded on January 25, amassing $300,000.
After testing resistance at $1.9545, XAVA's price experienced a 25% decline. A firm establishment above this threshold would signal strong buyer interest and the potential for continued upward momentum. In such a scenario, the immediate targets could be set at $2.895 and $3.450.
Similar to BONK's role in the Solana ecosystem, COQ's mission is to foster development and attract new users to Avalanche. Within four months of its existence, dozens of projects based on Coq Inu have been launched, such as:
After a two-month accumulation period, COQ broke its previous high at $0.000003999. Using Fibonacci levels (a technical analysis tool for determining potential ends of corrective and impulsive movements) to analyze the COQ/USDT pair, we observe:
The nearest support zone lies between $0.000003300 and $0.000002200. If buyers can maintain COQ within this range, it could serve as the Bull Power indicator.
Top 6 Blockchains by TVL. Source: coingecko.com
These Avalanche subnets are sovereign entities, each with its unique tokenomics, operational rules, and validators. They operate independently, not just from each other but also from the Avalanche Primary Network, which comprises:
- P-Chain: Manages validator coordination, staking, monitors active subnets, and facilitates the creation of new ones.
- X-Chain: Dedicated to the creation and exchange of crypto assets.
- C-Chain: Supports the functioning of decentralized applications.
The network's native token, AVAX, is the tenth most capitalized asset in the market ($20 billion). Remarkably, AVAX exhibits minimal direct correlation with Bitcoin. For instance, in mid-March 2024, while BTC saw a decline of 0.8% and ETH dropped by 6%, AVAX experienced a 39% increase.
In January, AVAX broke out of its consolidation phase, which lasted from June 2022. Moreover, its price has firmly established above the critical resistance zone of $51, suggesting a strong buying interest. If this trend continues, the coin could aim for the $98.77 level.
AVAX/USDT Weekly Chart. Source: tradingview.com
In addition to AVAX's price increasing as others decline, potential growth indicators for the Avalanche ecosystem include:
- Open Interest: The volume of AVAX's derivative contracts increased by 60% since early March, reaching $411 million.
- Total Value Locked (TVL): During the same period, Avalanche’s TVL witnessed a 28.3% increase, compared to Ethereum's 11%.
- DEX Trading Volumes: Avalanche is the fourth-largest blockchain by daily DEX trading volume. Its weekly performance saw a 113% improvement, compared to Solana's 38.3% increase and Ethereum's 6.3% decrease.
The price dynamics of major ecosystem tokens significantly influence the pricing of smaller capitalized assets, a trend that can be observed within the Ethereum (ETH influences ARB and OP) and Solana (SOL affects the price movement for JUP and JTO) ecosystems. This principle is equally applicable to Avalanche.
Trader Joe (JOE)
Trader Joe is at the forefront of the Avalanche ecosystem as its largest DeFi protocol. Since its inception in August 2021, it has rapidly ascended to prominence, becoming one of the most sought-after DEXs. By March 2024, Trader Joe had clinched the 5th position in DEX trading volumes ($3.2 million).
Top 5 DEXs by Trading Volume in the Last 7 Days. Source: defillama.com
Expanding beyond the Avalanche network, Trader Joe also supports Ethereum, Arbitrum, and BNB Chain. The platform's capabilities extend far beyond mere token exchanges, offering users opportunities to:
- Add tokens to a liquidity pool. Contributors to these pools earn a portion of the trading fees from the token pairs they've provided, typically around 0.2%. These rewards are distributed in the form of liquidity provider tokens.
- Engage in yield farming. Users can opt to receive JOE tokens as rewards for their liquidity provision, as opposed to traditional trading fees.
- Benefit from staking. Staking JOE tokens enables users to accrue various derivative tokens like xJOE. For instance, sJOE provides a way to earn passive income in USDC, and holding veJOE can enhance farming rewards.
A significant portion of Trader Joe's total value locked is in the Avalanche network, amounting to $170 million. Comparatively, its TVL in Arbitrum stands at $43 million, in BSC at $1.3 million, and in Ethereum at less than $1 million.
March 2024 saw the JOE price increase by 200%, emerging from a two-year consolidation phase. This rise positioned JOE above a critical resistance level at $0.657, indicating a potential continuation of its upward trajectory. If the buying momentum is maintained, the asset's medium-term target could reach $1.624.
JOE/USDT D3 Chart. Source: tradingview.com
Furthermore, Trader Joe is continuously broadening its service range. A notable example is Joepegs, the largest NFT marketplace on the Avalanche network, where artists can mint a variety of NFTs encompassing community themes and memes.
Avalaunch (XAVA)
Avalaunch represents the first launchpad platform within the Avalanche network, designed to streamline and enhance the efficiency of raising funds through Initial DEX Offerings (IDOs). Over its three-year lifespan, Avalaunch has attracted around $22 million and successfully hosted 28 sales.
Avalaunch Statistics. Source: avalaunch.app
The XAVA token functions as a governance token, empowering its holders with the privilege to purchase assets. By staking XAVA, participants earn Experience Points (XP), which subsequently dictate their eligibility and the amount they can allocate towards IDO token purchases. The annual percentage yield (APY) for XAVA stands at 9.3%.
Despite Avalaunch's depiction as a platform for decentralized token launches, it still necessitates users to:
- Complete a KYC (Know Your Customer) procedure for identity verification;
- Connect their crypto wallet to the platform.
The platform's zenith of popularity was in 2022, after which the frequency of IDOs significantly dwindled: 2023 saw just two sales, and 2024 has hosted a singular one so far. The latest sale, for the GameFi project Aether Games, concluded on January 25, amassing $300,000.
After testing resistance at $1.9545, XAVA's price experienced a 25% decline. A firm establishment above this threshold would signal strong buyer interest and the potential for continued upward momentum. In such a scenario, the immediate targets could be set at $2.895 and $3.450.
XAVA/USDT D3 Chart. Source: tradingview.com
XAVA's market capitalization currently sits at $64 million, ranking it 600th. This valuation is seen as favorable for achieving significant returns with an influx of new investors. However, it also leaves room for potential Pump and Dump schemes.
Coq Inu (COQ)
Coq Inu is a meme coin created by Avalanche community enthusiasts in December 2023. Named playfully after the well-known Shiba Inu meme coin, Coq Inu differentiates itself with a rooster (COQ) as its mascot.
Coq Inu Homepage. Source: coqinu.com
The total supply of COQ tokens is 69 trillion, all of which are currently in circulation. The initial liquidity of COQ was set at 150 AVAX and was burned following the token launch, signaling that COQ is a community token without inherent value and not intended for financial return.
Similar to BONK's role in the Solana ecosystem, COQ's mission is to foster development and attract new users to Avalanche. Within four months of its existence, dozens of projects based on Coq Inu have been launched, such as:
- CoqvsHunters: A GameFi project by Coq Miner, the first community to allow COQ farming.
- The Bokcast: A daily podcast on X (formerly Twitter) discussing topics related to COQ. The project creators have also launched themed merchandise, including mugs, t-shirts, and hoodies.
After a two-month accumulation period, COQ broke its previous high at $0.000003999. Using Fibonacci levels (a technical analysis tool for determining potential ends of corrective and impulsive movements) to analyze the COQ/USDT pair, we observe:
- The price tested the 0.5 Fibonacci level, considered a balanced zone for asset purchase.
- In an upward trend, the price could reach levels of 1 ($0.000006465), 1.272 ($0.000008019), and 1.618 ($0.000009996).
The nearest support zone lies between $0.000003300 and $0.000002200. If buyers can maintain COQ within this range, it could serve as the Bull Power indicator.
COQ/USDT D1 Chart. Source: tradingview.com
Meme coins are known for their potential high returns, but their propensity for sharp price drops can be risky for investors. COQ is no exception: rumors within the community suggest a significant portion of tokens is held by a small number of users. If true, the asset's value could plummet dramatically.
Disclaimer
The information about tokens discussed in this article is not financial advice. Always do your own research and assess the risks before making any decisions. Remember, anything can happen in the crypto market, as in any investment landscape.
