Avalanche is a leading Layer 1 (L1) provider known for its impressive performance and flexible Subnets, offering fast transaction speeds and high scalability. The platform leverages an innovative consensus mechanism called Avalanche Consensus, supported by a multi-chain architecture where each chain has distinct roles. Beyond its main network, Avalanche employs Subnet technology to deliver customized solutions tailored to diverse enterprise needs. This capability enables enterprises to build independent blockchain networks that meet their specific requirements.

The Avalanche Network is composed of the Primary Network (a public network) and Subnets, which are project-specific networks. The Primary Network includes the P-Chain, X-Chain, and C-Chain, each leveraging Avalanche Consensus's Snowman consensus algorithm.

A Subnet is an independent network within the Avalanche ecosystem, allowing for customizable blockchain environments. Each Subnet can define its own tokenomics, rules, and validators, which provides the flexibility to tailor blockchains to the specific needs of different organizations. In particular, Subnets prevent transaction processing issues that might arise from increased usage on the main network by other applications, ensuring reliable and transaction processing. This feature is particularly advantageous for large enterprises with high transaction volumes.

Avalanche's vision consists of three phases:

Avalanche's innovative vision and technical advancement fuel its growing enterprise adoption, with ongoing enhancements to the protocol. The Cortina upgrade in April 2023 aimed to optimize features and boost network efficiency, implementing improvements such as linearizing the X-Chain, introducing batch rewards for delegators, and raising C-Chain gas limits. The Durango upgrade in March 2024 is set to further enhance Avalanche's usability for users, businesses, and developers.

A key part of the Durango upgrade is the activation of the Teleporter, which maximizes cross-chain interoperability. The Teleporter is based on the Avalanche Warp Messaging (AWM) protocol, enabling seamless cross-chain message transfer between EVM chains. According to Avalanche Governance Proposal ACP-30, the Teleporter integrates AWM into the C-Chain and Subnet-EVM, facilitating native cross-chain communication between all EVM chains. This allows for cross-chain message communication without intermediaries, enabling organizations to move and integrate assets and data securely and cost-effectively compared to traditional bridge solutions.

By enabling secure and efficient interactions between different blockchain networks, the Teleporter opens up a wider range of business use cases for organizations using Avalanche. For instance, cross-chain swaps can be used to exchange assets across different blockchains, or NFTs created on one chain can be utilized on another. This allows gaming companies to provide a richer gaming experience by recognizing ownership of NFTs across different chains. In financial services, the same assets can be leveraged across multiple blockchain networks to develop complex financial products.

Teleporters not only facilitate building cross-chain functionality while maintaining security and reliability, but they are also cost-effective. They ensure message integrity and prevent repeated transfers, leading to lower fees. From a user experience perspective, moving assets between different chains is simplified, making it easier for businesses to attract more customers. In this way, teleporters enhance the flexibility and efficiency of cross-chain solutions, allowing enterprises to implement diverse business models.

However, the Teleporter has some potential limitations. Currently, it only operates between EVM-compatible chains within the Avalanche ecosystem, limiting direct interoperability with Ethereum and other major blockchains. Additionally, cross-chain solutions are inherently complex, and the Teleporter, being new to the market, may introduce unforeseen security risks. There is also the potential for performance degradation or delays when processing high transaction volumes.

Despite these risks, the Teleporter is an innovative technology that significantly enhances cross-chain interoperability within the Avalanche ecosystem, offering numerous possibilities for enterprises. Avalanche is committed to overcoming these shortcomings through continuous improvements and upgrades, aiming to provide a more secure and efficient solution. Businesses can evaluate the pros and cons of the Teleporter to choose the optimal solution that meets their requirements.

Subnets are independent networks within the Avalanche ecosystem that can have their own token economy, rules, and validators. This flexibility allows Subnets to cater to different business needs with tailored rules and validation mechanisms.

Compared to L2 solutions, Subnets offer distinct advantages in terms of customization and interoperability. The ability to deploy and use with one click is a notable strength of Subnets. This means that Subnets can establish entirely independent blockchains to meet various business requirements, providing the flexibility for companies to apply their own regulatory standards and operational practices.

However, despite these advantages in customization, Subnets are still perceived as lacking in infrastructure and capital scale compared to Ethereum L2 solutions, especially concerning bridges or messaging protocols within a single Subnet. These limitations may restrict the adoption of Subnets, yet Avalanche is actively addressing these issues. For instance, through tools like AvaCloud and HyperSDK, Avalanche streamlines the creation and operation of Subnets, simplifying the adoption and utilization of blockchain technology by enterprises.

Many organizations face challenges when first adopting blockchain, including complexities in initial setup, operational challenges, and compliance issues. Addressing these concerns, Avalanche enables enterprises to concentrate on core service components without investing excessive time and resources to underlying blockchain technology. In particular, Avalanche leverages tools such as AvaCloud and HyperSDK to streamline Subnet creation, facilitating easier development and management of blockchain networks by companies.

AvaCloud (Source: AvaCloud)

AvaCloud is a SaaS cloud service that simplifies the process for enterprises to build and manage blockchains. With AvaCloud, enterprises can quickly set up and operate their own blockchain network without any coding or technical complexity, utilizing a user-friendly "one-click" UI. AvaCloud provides automated infrastructure management and robust security features, enabling enterprises to reliably operate their blockchain solutions. From managing validator nodes, block explorer services, Glacier APIs, RPC nodes, and dedicated nodes, to automated software updates, security patches, and backup and recovery capabilities, AvaCloud streamlines the management of all blockchain elements, allowing organizations to focus on their core business objectives.

HyperSDK is Avalanche's high-performance virtual machine (VM) deployment framework that allows enterprises to quickly develop and deploy optimized Subnets. When building a blockchain on an Avalanche Subnet, HyperSDK facilitates specialized chain development and enhanced processing power through custom VMs. By simplifying complex programming elements, HyperSDK enables the creation and execution of virtual machines efficiently with just a few hundred lines of code, reducing custom VM development time from months to days. With HyperSDK, developers can scale existing Subnets, rapidly develop and deploy them, and implement high-performance, custom blockchain solutions while minimizing development time and costs.

With the growing interest in Web3 technologies, including Real-World Assets (RWAs) and Security Token Offerings (STOs) in the financial sector, Avalanche enables enterprises to leverage regulatory-optimized blockchain solutions through the EVM-based Evergreen Subnet. The Evergreen Subnet can be customized as needed while maintaining connectivity to the mainnet, allowing financial institutions to fully exploit blockchain benefits while meeting their specific regulatory requirements.

Private blockchains are particularly suited to the highly regulated financial sector by ensuring KYC (know your customer) and AML (anti-money laundering) compliance, along with enhanced user data protection. The Evergreen Subnet is designed to help organizations securely manage customer data and comply with regulatory requirements, while benefiting from interoperability with other Subnets and public blockchains through Avalanche Warp Messaging (AWM). The Evergreen Subnet allows financial institutions and enterprises to customize their blockchains with EVM compatibility, smart contract deployment, transaction-level permissioning, network privacy, and custom gas capabilities.

Avalanche offers an Evergreen Subnet testnet named Spruce, which allows institutions to experiment with on-chain finance in a low-risk environment. The Spruce testnet uses tokens with no real-world value, enabling institutions to safely test all blockchain features without the risk of capital loss. Financial institutions can use the Spruce Testnet to test different scenarios and validate the stability of their products before deploying their blockchain infrastructure to the market.

While increasing number of financial institutions are adopting Avalanche via the Evergreen Subnet, others continue to prefer chains like Ethereum due to its greater liquidity and longer history, and proven real-world stress testing capabilities under higher usage. For those seeking liquidity or tokenization on a public blockchain, Ethereum and similar chains might be suitable options. However, when it comes to regulatory-optimized solutions, high customizability, and enhanced privacy and security, Avalanche's Evergreen Subnet stands out. This is particularly relevant for KYC and AML compliance, data protection, and customizable gas features. Businesses must carefully evaluate these factors selecting a blockchain solution that meets their specific needs.

Core Wallet UI (Source: Core Wallet)

Optimizing the user experience (UX) is crucial for new entrants to Web3 when adopting blockchain technology. For those transitioning from a Web2 background, enhancing accessibility and usability is a key challenge. Avalanche's Core Wallet provides an innovative wallet solution that addresses these needs. Developed and actively used by Ava Labs, Core Wallet offers a user-optimized UX and has gained a large user base in a short period. Available as a Chrome extension and mobile app, Core Wallet enables ecosystem projects to extend their reach with a variety of features.

Core Wallet offers various features that enhance user accessibility and facilitate ecosystem expansion from a business perspective. While many Web3 wallets like MetaMask focus on simple functionalities for Web3 users, Core Wallet functions beyond a mere wallet, acting as a comprehensive Avalanche platform. In addition to easy account creation, staking, and cryptocurrency purchasing, it provides multi-chain support and a Discover feature to deliver the latest information about the Avalanche ecosystem. This allows users to experience more than just a wallet, enriching their interaction with the Avalanche ecosystem.

In addition to its functional benefits, Core Wallet offers convenience in integration and usage, supported by the Wallet Connector SDK, development documentation, examples, and third-party libraries. Although the user base is relatively small compared to other wallets like Phantom and Metamask, with approximately 60,000 users as a Chrome extension, it holds a distinct advantage by being tailored to the Avalanche ecosystem. With the ease of account creation feature, Core Wallet is expected to drive broader adoption over time.

Onyx by J.P. Morgan, under Project Guardian, leverages Avalanche to revolutionize portfolio management Source: Avalanche)

Blockchain technology is bringing innovation to the global financial industry. Major financial institutions such as JPMorgan, Citi, and the Australia and New Zealand Banking Group (ANZ) have garnered significant attention by implementing asset management and trading systems on the blockchain using Avalanche's high-performance Subnet.

Avalanche has a wide range of use cases, particularly in the tokenization of financial assets. Institutions such as the Diamond Standard investment fund, a fine wine investment fund, and a home equity platform are using Avalanche to tokenize various asset classes, making them tradable on the blockchain.

Major financial institutions choose Avalanche for its technical benefits and strategic initiatives, particularly those offered by its Subnets. The Evergreen Subnet not only enables compliance and customization but also ensures unparalleled performance and reliability through the C-chain, facilitating the launch of tokenized products. Avalanche has successfully tokenized $50 million in assets through its Avalanche Vista initiative. Avalanche's experts remain dedicated to advancing technology and business innovation, focusing on adoption in the financial sector.

Avalanche's high-performance blockchain network provides an optimal environment for game developers to develop and operate their games. The use of Subnets on Avalanche allows for greater development freedom, transaction speed, and reliability. This infrastructure makes it easy for developers, even without extensive blockchain knowledge, to build and manage Subnets, allowing them to focus on core game development.

Subnets can be customized with various features, effectively implementing systems that game developers need, including gas payment systems and virtual machines (VMs). This flexibility has led to the onboarding of numerous companies and studios working on major IP and AAA games, such as the MapleStory Universe. This allows game developers to minimize the challenges associated with blockchain and reduce development costs and resources. Companies like SHRAPNEL, Off The Grid, and MetaDOS have leveraged the Avalanche Subnet to create optimized gaming experiences.

MapleStory will be powered by an Avalanche Subnet tailored to their ecosystem (Source: Avalanche)

Nexon recently made headlines by onboarding its flagship game, MapleStory Universe, along with IPs from MapleStory, onto the Avalanche subnet. With MapleStory boasting over 180 million cumulative subscribers worldwide, the decision to integrate such a large user base into the Avalanche subnet is a strong endorsement of the subnet's performance and scalability. Given that major gaming companies generate billions of dollars in revenue daily, even brief periods of downtime can significantly impact both revenue and user experience. Hence, Nexon likely thoroughly tested the Subnet's reliability and processing capabilities before making this move. According to AvaCloud, the Avalanche Subnet can theoretically handle enterprise-level TPS of over 50,000. In practice, Defi Kingdoms (DFK), another game powered by the Avalanche Subnet, has managed to process up to approximately 3 million transactions per day. Based on this performance, MapleStory Universe is expected to seamlessly handle transactions of a similar scale.

Nexon's decision to adopt the Avalanche Subnet likely involved several factors beyond its performance. Unlike smaller Web3-native games, MapleStory boasts a strong IP and a vast fan base, reducing its dependence on Web3 users and liquidity, which is advantageous for building its own ecosystem. Additionally, with Polygon transitioning from Supernets to CDK, Nexon, which had initially chosen to build on Supernets, might have encountered roadmap challenges. The Avalanche Subnet, with its easy one-click deployment and management, likely emerged as a more suitable alternative. Thus, Nexon selected the Subnet based on Avalanche's proven performance and ease of management and other large-scale Web2 game developers are likely to favor Avalanche for similar reasons. For more details on MapleStory Universe, please refer to Xangle’s report, [ADOPTION] Application - NEXPACE, SK Planet.

In addition to Subnet-specific tools like the Avalanche CLI, AvaCloud, and HyperSDK, Avalanche offers a wide range of tools to simplify and accelerate game development. The Stardust Game Toolkit provides an easy solution for integrating NFTs into games with minimal code, while the Moralis Unity SDK facilitates the integration of Avalanche blockchain data into games, enhancing the interactive experience for players.

Subnets enable game companies to set up logic specific to their games and run independent chains in a customized environment. However, when resource and cost savings are necessary, companies can start development on Avalanche's main network, the C-Chain, and later move assets to Subnets as needed. This flexibility allows Avalanche to offer game developers various options to meet their specific needs.

Avalanche is at the forefront of transitioning users from Web2 to Web3, showcasing practical applications in the consumer and retail sectors. One notable example is Shopify’s loyalty solution, Thank You Bucks (TYB), powered by Avalanche. This program enables consumers to earn rewards through brand interactions, enhancing customer loyalty. Similarly, Alipay’s D-store Web3 voucher program has launched successfully in Southeast Asia, with over 500 stores participating, and plans to expand to over 100 million users.

In South Korea, SK Planet's Web3 project "UPTN," built on the Avalanche Subnet, has attracted significant attention. Designed to facilitate the shift from Web 2.0 to Web 3.0, UPTN achieved 100,000 sign-ups within its first month, and its stations have been expanding at a rate of 10% monthly. The Avalanche Subnet's high transaction processing capabilities have also led to collaborations within the SK Group, notably with SK Planet launching a ticketing platform in partnership with Dreamers Company, which operates the music platform FLO.

‘Solo Leveling: Unlimited’ Launches on Avalanche (Source: Avalanche)

OtherWorld, a Web3 social protocol, has recently launched a new digital collectibles platform based on the mega-hit webtoon "Solo Leveling" IP, capturing widespread interest and excitement. The platform, named "Solo Leveling: Unlimited" (SL:U), is currently available for closed beta on Avalanche. Users can immerse themselves in the game’s storyline to collect cards and develop their characters. SL:U has been designed to reflect the original story, where characters level up and grow by defeating monsters within gates. Users can obtain monster cards as loot through the gates. These monster cards can be leveled up and users with high-level monster cards will be rewarded with NFTs featuring the main character PFP. Leveraging Avalanche Subnet’s gasless transaction capabilities, OtherWorld is building a custom L1 blockchain focusing on addressing common barriers to Web3 adoption, such as weallet-based logins and transfer fees, ensuring all activity is stable on-chain. OtherWorld’s use of Avalanche technology to create a tailored blockchain demonstrates a strategic approach to enhancing user experience, setting it apart from other existing blockchain services.

Avalanche’s superior performance and transaction processing capabilities enable global retail and consumer companies to seamlessly transition from Web2 to Web3. The network continues to enhance its performance and develop infrastructure, empowering organizations to swiftly implement new business models in the evolving digital economy.

Avalanche is driving multifaceted ecosystem growth through various grant programs. These initiatives support developers, enterprises, artists, and others in creating innovative blockchain projects, further expanding the Avalanche ecosystem.

Each grant program is designed to encourage the practical application of blockchain technology, actively supporting innovative ideas and projects that contribute to the ecosystem’s growth.

An analysis of Avalanche's on-chain performance in 2Q24 revealed significant achievements across various metrics, including network activity, security, and developer engagement. In the token performance sector, the price fell to $27.73, a 47.68% decline from the previous quarter, reflecting overall market volatility. The market cap also decreased by 45.50% to $1.09 billion, while the supply slightly increased to 443.5 million.

In terms of network activity, the daily transaction count dropped by 57.13% to 201.49K, yet the number of active addresses remained relatively stable, declining by 20.64% to 43.48K. The total value locked (TVL) decreased by 27.18% to $924.87 million, which can be attributed to the decline in token prices.

For security, the number of validators decreased by 5.19% to 1,588, while the number of subnets increased by 3.31% to 125. The amount of AVAX staked in the network grew by 3.36% to 255.91 million, supporting the network's stability and reliability. In developer activity, the average number of commits and new contract deployments slightly increased to 2.88K and 12.98K, respectively, although the number of new contract deployments saw a significant decrease of 55.81%.

Avalanche has established itself as a key blockchain infrastructure option for global enterprises testing Web3 transitions, including JPMorgan, Citi, Shopify, and Alipay. Its Subnets offer customization and regulatory compliance, driving significant progress in the financial sector, particularly in RWAs and STOs. The network's high transaction speed and reliability have also attracted major gaming projects like Nexon's MapleStory Universe and SK Planet's retail transition initiatives, as well as platforms leveraging the "Solo Leveling" IP. These successful applications position Avalanche at the forefront of Web3 innovation, with continued growth and development anticipated. As evidenced by the Q224 data, Avalanche maintains stability in network activity and security, making it a reliable platform for enterprises. While the volatility in price and market capitalization requires careful monitoring in line with market conditions, Avalanche's foundational stability indicates promising prospects for its long-term growth.