Avalanche is increasingly being adopted as a preferred blockchain for governmental bodies and institutional investors, despite its native token, AVAX, trading significantly below its all-time high.
In the past quarter, Wyoming's Stable Token Commission launched the Frontier Stable Token (FRNT), the first government-backed stablecoin, on Avalanche and six other public blockchains. This development highlights a growing trend of governments utilizing blockchain networks.
The FRNT stablecoin was introduced as a fully collateralized asset, backed by U.S. dollars and short-duration U.S. treasury bills, with a mandatory reserve requirement of 102%, as reported in August.
Avalanche has also attracted significant interest from traditional finance players. SkyBridge Capital, an investment firm founded by Anthony Scaramucci, has committed to tokenizing $300 million in hedge fund capital on the network. Crypto analytics firm Nansen commented on this trend, describing it as "quietly turning TradFi and gov tech into onchain reality," and stating that "DeFi just got institutional."
By the end of the third quarter of the year, Avalanche had positioned itself as the third-largest blockchain for tokenized U.S. Treasurys on-chain, with $638 million in value. It trails only BNB Chain and Ethereum in this metric, according to data from RWA.xyz.
Tokenized treasuries are created on the blockchain to enhance investor accessibility and trading opportunities. They represent a growing segment of the real-world asset tokenization sector.
AVAX Token Performance Despite Network Growth
Avalanche's on-chain data indicates substantial user activity, with an average of over one million daily transactions. During the past quarter, the network even saw a peak of 51.6 million daily transactions, according to Nansen.
Despite this increasing network usage, Avalanche's native utility token, AVAX, has not experienced significant price appreciation. AVAX is currently down 86% from its all-time high of $146, which was reached on November 21, 2021.
At the time of reporting, Avalanche was trading at $19.66, marking a 33% decrease over the past month. This decline occurred as the broader cryptocurrency market faced a significant liquidation event totaling $19 billion at the beginning of October. This market downturn was influenced by threats of a 100% import tariff on Chinese goods by U.S. President Donald Trump.