Avalanche is emerging as a favored blockchain for governments and institutional investors, despite its native token still being significantly below its all-time high.
In the last quarter, Wyoming’s Stable Token Commission launched the first government-backed stablecoin, the Frontier Stable Token (FRNT), on Avalanche along with six other public blockchains, illustrating a rising adoption of blockchain technologies by government entities.
FRNT debuted as a fully collateralized stablecoin, secured by US dollars and short-term US Treasury bills with a mandated 102% reserve requirement, as reported by Cointelegraph in August.
Avalanche has also drawn interest from traditional finance sectors. SkyBridge Capital, led by Anthony Scaramucci, committed to tokenizing $300 million in hedge fund capital on the platform.
Crypto analytics firm Nansen described the phenomenon as “quietly turning TradFi and gov tech into onchain reality,” adding, “DeFi just got institutional.”
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By the end of the third quarter, Avalanche had risen to become the third-largest blockchain in terms of tokenized US Treasurys onchain, holding $638 million, trailing only BNB Chain and Ethereum, according to data from RWA.xyz.
Tokenized Treasurys are created on the blockchain to enhance investor accessibility and trading opportunities, contributing to the expanding real-world asset tokenization market.
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AVAX token down 86% from all-time high, despite growing network adoption
Avalanche’s onchain data indicates significant user engagement, averaging over 1 million daily transactions with a peak of 51.6 million during the past quarter, according to Nansen.
Nonetheless, the increased network activity has not translated into gains for Avalanche’s native utility token (AVAX), which has declined by 86% from its all-time high of $146 reached on Nov. 21, 2021.
Avalanche was trading at $19.66 at the time of publication, reflecting a 33% drop over the past month, as the broader crypto market faced a staggering $19 billion liquidation event early in October, prompted by US President Donald Trump’s 100% import tariff threats on Chinese goods.
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