Among the many reasons for the AVAX prices to go up, a new bridge that is low-cost, leading to Ethereum network, and a rapidly expanding decentralized finance ecosystem are some.
Layer-one networks of blockchain like Ethereum and Bitcoin constitute the basic foundation of cryptocurrency’s ecosystem and allows smart functionality which in turn allows the birth of new industries, examples of which are DeFi and nonfungible tokens, or commonly known as NFT.
AVAX is considerably a new layer-one solution that has recently experienced rapid growth in adoption as well as price. All while Ethereum, which happens to be the dominant platform continues its struggle when it comes to high costs of transaction and a processing time slower than that of its competitors.
According to data gathered from sources, AVAX hit a low on 3rd August standing at $12.24. This price got multiplied 205% making it a major high standing at $37.42 as of 20th August. The reasons for this massive growth experienced by AVAX are the rapidly expanding decentralized finance ecosystem, releasing the AVAX bridge to the Ethereum network, and the unique tokenomic design of the protocol which has dynamic fees and a mechanism of token burn.
How Do These Factors Affect AVAX?
The mining program called Avalanche Rush, which stood at $180 million, is one of the major reasons for the growth of AVAX since it growth the DeFi ecosystem rapidly. The first phase of the program is scheduled to start recently and would allow the company to be utilized as liquidity mining inducement.
The second reason for the growth is because Avalanche Bridge getting released which allows assets to be transferred between the Ethereum and Avalanche networks.
The third reason that led to the growth of Avalanche is the unique structure of the protocol which has a mechanism for burning transaction fees, which in turn helps in reducing the supply circulating over time.