Key Takeaways:
- 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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