Avalanche (AVAX) experienced a significant downturn in the final quarter of 2025, with its price falling from $30 at the end of September to $12.3 by December 31, representing a 58.3% decline quarter-on-quarter (QoQ) and 63.9% year-on-year (YoY).
Source: Messari
According to Messari report from January 29, the circulating market capitalization also dropped sharply, falling from $12.7 billion to $5.3 billion over the quarter. These are the results of a strong third quarter and reflect the volatility of the market at the end of the year.
This resulted in AVAX’s ranking being affected, moving from 14th to 21st in the list of tokens by market cap. Despite the massive price movement, the number of transactions on the Avalanche network continued to increase.
The average daily transactions on the C-Chain increased by 63% quarter-over-quarter to 2.1 million, thanks to increased user engagement and the massive liquidation event on October 10, which caused a market crash and resulted in the network earning $520,715 in fees, the highest in a single day since February 2024.
Source: Messari
The total fees paid in AVAX rose by 24.9% QoQ from 105,719 to 132,016 AVAX, although the fees in USD fell by 11.7% as the price declined.
The average daily transactions for all Avalanche Layer 1 networks increased to 38.2 million, which was up 4.5% QoQ and an astonishing 1,162.1% YoY. The daily active addresses increased by 25.1% QoQ and 16,360% YoY to 24.7 million.
Source: Messari
Also Read: AVAX Price Analysis: Avalanche Tests $11 Support as Momentum Weakens
Fixed Supply Guides Avalanche Economics
Avalanche has a fixed total supply of 720 million AVAX. By the end of Q4, 91% of the initial supply had been distributed, and all vesting is expected to be completed by December 2030.
Contrary to most other PoS blockchains, Avalanche burns transaction costs. Validator rewards are paid out from the inflationary component of the supply, not from the initial mint. The annual inflation rate decreased to 3.0% in Q4, down 5.0 percentage points from Q3 and 21.7% from last year.
The total amount of AVAX staked decreased slightly to 185 million, or 39.7% of the circulating supply (down from 188.9 million in Q3). In terms of USD, the value of staked AVAX decreased 59.9% from Q3 to $2.3 billion, reflecting the price drop.
Source: Messari
Staked AVAX Sees Minor Drop
The number of validators participating decreased. The number of active validators decreased by 23.3% from the last quarter, and by 55.2% from the same period last year, to 656.
The total amount of AVAX staked decreased by 2.6% from the last quarter. Avalanche’s dynamic proof-of-stake consensus mechanism gives each validator power proportional to the amount of tokens they stake and for how long.
Despite the decrease in the number of validators, Avalanche’s network remained highly decentralized. This is made possible by the P-Chain, which manages staking and validator tasks for the C-Chain and X-Chain.
Also Read: Avalanche (AVAX) 60% Plunge Despite $1.3B Institutional Uprise
