Rising demand for Avalanche prompts $230m private token

Layer-1 blockchain platform Avalanche has raised $230 million in a private sale of its native AVAX token to an assortment of leading institutional investors.

Prominent investment firms Polychain and Three Arrows Capital led the $230m in the Avalanche ecosystem, with R/Crypto Fund, Dragonfly Capital, CMS Holdings, Collab+Currency and Lvna Capital also participating in the private sale. An unidentified group of angel investors and family offices also contributed to the token sale.

The sale was the second round of institutional investment for Avalanche and developer Ava labs and marks the interest and demand in the burgeoning ecosystem. The investment in the token, rather than equity in AVA labs, signals strong belief and demand for AVAX, which has seen incredible growth despite its relative infancy in the industry.

The AVAX token gives investors exposure to AVAX, allowing them to utilise the array of DeFi platforms on Avalanche, participate in governance and even manage validator nodes.

Launched in September 2020, Avalanche initially raised $12m in a private round via investors like Galaxy Digital, Bitmain and returning investor Dragonfly Capital. Ava Labs then raised a further $42m in a public token sale of AVAX.

The capital raised will be used by the Avalanche foundation to “support and accelerate the rapid growth of DeFi” within the Avalanche ecosystem and introduce more support for enterprise applications. The funds will also be used to support projects that wish to build on Avalanche with grants, token purchases and an array of investments and technology support.

Emin Gün Sirer, Director at the Avalanche Foundation and founder of AVA Labs expanded on Avalanche’s incredible growth and impact on the DeFi space within the crypto industry.

“Despite being years younger than its peers, Avalanche has quickly turned promise and potential into real-world impact and value creation for DeFi users and developers,” he said.

“There’s no signs of slowing down progress toward fast, low-cost, and easy-to-use DeFi applications.” 

The announcement of the private token sale pushed the price of AVAX to an all-time high of $65.75, with further growth expected due to upcoming incentives.

An ‘Aavelanche’ is coming

Avalanche is currently preparing for the second phase of its incentive program, Avalanche Rush. The incentives have attracted DeFi users to the chain in their masses via high-yield farms, low transaction fees and an array of intuitive platforms designed to make DeFi simpler.

The second phase of Avalanche Rush includes incentives from Etheruem-based DeFi platform Aave, which recently teased the upcoming integration of the Avalanche blockchain.

CEO Stani Kulechov took to Twitter to comment on a proposal for deploying Aave on the Avalanche network, calling it an “Aavelanche”.

The priorities of the proposal include the deployment of smart contracts in Avalanche C-Chain and activation of the liquidity mining program for Avalanche rush. The decision will be made based on a Snapshot of a YES/NO vote from the Aave community to signal the anticipated deployment on Avalanche.