VanEck Says Avalanche (AVAX) Faces A Number Of Problems

JAKARTA - In its latest report on the digital asset market, a large investment company, Vaneck, has revealed some of the problems faced by the Avalanche (AVAX) crypto project. They considered Avalanche to be experiencing a number of serious obstacles.

Analysis of the VanEck team shows that activity within Avalanche's network, called C-Chain, has decreased significantly. In September, the costs incurred in this network were only around $11,000 (Rp173 million) per day, down 98.9% from its highest level two years ago.

VanEck also noted how in the fall of 2021, Avalanche achieved financial success with a C-Chain that supports the virtual Ethereum (EVM) engine. At that time, C-Chain had more than $10 billion (Rp157 trillion) in total locked value (TVL) in its smart contract, costing around $1 million (Rp15.7 billion) per day, and had more than 100,000 daily active users.

However, in September 2023, the number of TVL worth IDR 157 trillion dropped drastically to $500 million (IDR 7.8 trillion) TVL, the daily cost was only around $11,000 (IDR 173 million), and the number of daily active users fell to 34,000.

VanEck said that while Avalanche has strong technology, the project does not have an advantage equal to Ethereum or any other Ethereum competitor. This is due to a lack of support from venture capital (VC) and a smaller developer community.

They stated, "Although we have confidence in Avalanche's technical capabilities, we doubt whether this project is capable of using its marketing power to attract the company's customers needed to revive Avalanche's network. In addition, with a reduced developer base fast and VC capital switching from major crypto projects, Avalanche's long-term prospects are becoming difficult."

One of the things revealed is that Avalanche does not have a strong developer base or support from Jump Capital to reach a transaction scale of 1 million transactions per second (TPS), and does not have a strong developer and capital ecosystem like Ethereum has.

Nonetheless, VanEck admits that in a moving market going up, anything is possible, and they continue to monitor to see if Avalanche will present interesting technical solutions to complex problems in the blockchain world. However, until Avalanche is able to attract new users with attractive applications, AVAX may face ongoing challenges.