On Sunday, cryptocurrency coin Avalanche—which trades as $AVAX—reached an all-time high of $144.96 per token, making Avalanche one of the ten most valuable cryptocurrency coins globally with a peak market cap of $31.5 billion. The new record capped a rapid rise for the cryptocurrency token that has doubled in value in the last month and is up over 3,000% from one year ago.
As of Monday, Avalanche’s price had dropped roughly 7%, but it remains the tenth most valuable crypto token just ahead of Dogecoin with a market cap of $29.8 billion, according to CoinGecko.
A new deal that Avalanche struck with consulting firm Deloitte likely helped spur new interest in the coin and its underlying technology.
Last week, Deloitte announced that it would partner with Ava Labs, the firm that developed Avalanche and launched the coin in September 2020, to use Avalanche’s blockchain to support Deloitte’s work with the U.S.’s Federal Emergency Management Agency (FEMA).
Deloitte and Avalanche announced that they will deploy a new Close As You Go platform that will help streamline FEMA’s processes for aggregating and validating federal disaster claims.
“Close As You Go features a user-friendly interface backed by the cutting edge of blockchains, helping state and local governments focus on their recovery, rather than extensive claims processes,” John Wu, president of Ava Labs, said in a statement last week.
Avalanche’s coin is backed by its own blockchain platform that promises faster speeds, lower fees, and less environmental waste than competitors like Ethereum. Avalanche raised over $230 million in September from investors like U.S.-based venture capital firm Polychain and Singaporean hedge fund Three Arrows Capital, and launched its own $220 million fund called Blizzard to support projects on the Avalanche platform.
Avalanche calls itself the “fastest smart contracts platform in the blockchain industry.” Smart contracts are a blockchain-based technology that allows buyers and sellers to automatically input the terms of an agreement into self-executing contracts. Ethereum was crypto’s first smart contracts platform. Its coin is currently the world’s second-most valuable token behind Bitcoin with a valuation of nearly $500 billion. But Avalanche’s recent rise has some investors convinced that competitors are staging more formidable challenges to Ethereum’s dominance.
Zhu Su, CEO of Three Arrows Capital, wrote on Twitter on Sunday that he had “abandoned” Ethereum after spending years supporting the token. Zhu, a AVAX investor, said Ethereum platform users have been complaining about high gas fees, which refer to the costs of transactions, and may seek out other platforms like Avalanche or Solana if Ethereum does not adapt quickly enough. Avalanche claims that its gas fees are lower than Ethereum due to its ability to process transactions at a faster pace than its competitor. It says its blockchain can process 4,500 transactions per second, compared to 15 transactions per second on Ethereum.
But some users pointed out that recent upgrades to Ethereum’s technology—Ethereum 2.0 is expected to be fully rolled out by next year—will improve user experience and make it difficult for smaller competitors to keep up.
Ethereum may not be buried in an Avalanche just yet.