- John Wu, a 20-year fintech executive, is the president of Ava Labs, which created Avalanche.
- Wu told Insider about the layer-one protocol’s fast growth and shared 2 DeFi tokens to watch.
- Insider also asked 3 crypto traders and analysts about their thoughts on AVAX and the 2 altcoins.
Crypto analysts and traders do not view the Coinbase listing as a particularly bullish event for the token but they are positive about its ability to expand the AVAX token’s holder base and garner attention to the fast-growing layer-one protocol.
“Coinbase listings generally aren’t a good thing for tokens in the short to medium term because they are usually the final frontier for market access. There are no buyers left to conquer once a token is on Coinbase,” Joseph Edwards, the head of research at Enigma Securities, told Insider.
“We tend to expect a fall-off after listing, but there’s definitely potential for a surge in late October and November if crypto markets as a whole hold up decently,” he said.
Price outlook aside, it is the technology and infrastructure built by the Ava Labs team behind Avalanche that seems to have appealed to users the most.
Patrick Heusser, head of trading at Crypto Finance Brokerage, told Insider that he first thought of Avalanche as “just another one of those ecosystems that try to jump on the DeFi hype-train” about six months ago, but quickly changed his mind once he dived into the ecosystem.
“I started to use it privately and realized that the user experience is pretty good when you overcame the hurdle of moving capital over, [which] was not that easy with the MetaMask bridge,” Heusser said.
He adds that the protocol also benefits from its strong investor base including crypto heavyweights Three Arrows Capital and Polychain Capital, which led a recent $230 million investment round in Avalanche.
One of the fastest-growing smart contracts platform
A rival to Ethereum, Avalanche, which has been live on the mainnet for about a year, already counts 150 decentralized applications live on its blockchain, with another 200 of them in the process of integrating, according to John Wu, the president of Ava Labs and a 20-year fintech executive.
“Avalanche was developed with the explicit goal of digitizing and tokenizing not just the decentralized world of DeFi, but to ultimately help usher in the $700 trillion of financial assets that exist on financial balance sheet around the world,” Wu told Insider in an interview.
To accomplish that goal, Avalanche is built to not only service the decentralized finance world but also help enterprises create private blockchains. Using the same operating system, enterprises can create private blockchains that are both compliant and tethered to the permissionless world so that they can future-proof themselves, according to Wu.
2 DeFi projects thriving on Avalanche
By introducing Avalanche Rush, a $180 million DeFi incentive program, Avalanche has attracted blue-chip DeFi applications such as Aave and Curve to join the protocol. Meanwhile, the total value locked on Avalanche, which refers to the total value of assets staked on the protocol, has also skyrocketed to $3.7 billion from around $250 million in August when the program was announced, according to Marcus Sotiriou, a sales trader at UK-based GlobalBlock.
Benqi, which was trading at $0.088482 as of midday Thursday, is an algorithmic
market protocol with over $2.5 billion in liquidity.
“What is interesting about Benqi is that it offers services that one would find in the traditional finance world,” Wu said. “Lending, borrowing, and earning interest are familiar to all of us, but this time with no middlemen, and it can be implemented in a matter of minutes in a secure fashion.”
Yield Yak, which was trading at $8,678 as of midday Thursday, is a decentralized exchange aggregator that aims to help users earn more yield and save time with auto-compounding.
“Yield Yak allows individuals to grow capital by compounding the interest or yields coming from DeFi protocols participated in. It also helps users find the best price for certain assets across decentralized trading venues,” Wu explained. “You can think of it as your personal banker growing your yields, but completely automatically based on an algorithm.”
Outlook on Avalanche and its ecosystem
Despite the bullish market sentiment towards layer-one protocols, Avalanche is still young compared to other more established smart contract platforms, GlobalBlock’s Sotiriou said.
“However, its huge incentive program, as well as the institutional interest, may mean that Avalanche could soon become a blue-chip cryptocurrency,” he added.
Enigma Securities’ Edwards finds it harder to be overly optimistic because the market has not seen an outright decoupling between tokens of layer-one protocols and bitcoin or ethereum during times of elevated volatility.
“Nonetheless, tokens like AVAX and SOL are probably the best spot mechanism by which to express a bull view on crypto markets as a whole,” he said.
Crypto Finance’s Heusser believes that the tech or infrastructure of projects such as Avalanche count for a smaller part of their potential success. He thinks it is more important to see if they have a seed-investor base that has a good amount of capital that is ready to be deployed into the new ecosystem in order to attract more capital.
“Obviously the incentive needs to be right otherwise it will be difficult to attract more capital that is willing to migrate from other ecosystems,” he said.