State of Avalanche Q2 2025

Key Insights

• Average daily active addresses increased 210.4% QoQ to 519,954 across Avalanche C-Chain and L1s, driven by the launch of new L1s and applications boosting onchain activity.
• FIFA selected Avalanche for its dedicated L1. In Q2, FIFA launched a purpose-built Avalanche L1 to power its FIFA Collect digital collectibles platform.
• Nexpace launched MapleStory N on Avalanche. The title debuted on Henesys, Nexpace’s Avalanche L1, and attracted over 1.1 million users in anticipation of its launch.
• VanEck launched VBILL, a tokenized U.S. treasury fund, on Avalanche. VBILL provides onchain access to short-term U.S. Treasury debt through tokenized shares.
• Euler Finance launched on Avalanche in Q2 and quickly gained traction, ending the quarter with over $137.0 million in TVL. Euler Finance is a modular lending protocol that allows users to lend, borrow, and swap.

Primer

Avalanche (AVAX) is a Proof-of-Stake (PoS) smart contract platform for decentralized applications. Avalanche differentiates itself by creating and implementing a consensus family known as “Avalanche consensus.”

Following years of research, the Avalanche mainnet was launched in September 2020 and featured the release of a multichain framework utilizing three chains: the P, X, and C chains. Each chain plays a critical and unique role within the Avalanche ecosystem, and when combined, they create the Primary Network. Avalanche consensus and the Primary Network are designed to support sovereign, interconnected blockchains known as Avalanche Layer-1s (L1s).

Avalanche L1s run the same Virtual Machines (VMs) with their own customizations. L1s enable different properties of reliability, efficiency, and data sovereignty. They allow the creation of custom networks for different use cases while isolating high-traffic applications from congested activity on the Primary Network. To stay up-to-date with all things Avalanche, visit the Avalanche Portal.

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Key Metrics

Financial Analysis

AVAX experienced a moderate price decline in Q2, falling 4.2% QoQ from $18.77 to $17.99, while its circulating market cap declined 2.6% from $7.8 billion to $7.6 billion. Despite the drop, AVAX’s price experienced reduced volatility relative to prior quarters.

Market Cap and Transaction Fees

AVAX’s circulating market cap fell 2.6% QoQ to $7.6 billion, decreasing its rank amongst all tokens from 15th to 16th. Transaction fees (AVAX) increased 28.87% QoQ from 58,300 to 75,170. Transaction Fees (USD) increased by 3.07% QoQ from $1.50 million to $1.54 million.

Supply Dynamics

AVAX has a fixed supply of 720.0 million. At the genesis block, 360.0 million AVAX was minted. This genesis supply was distributed to various allocations over differing vesting periods. Over Q2 2025, the liquid genesis supply increased from 89.8% to 90.0%. The genesis supply is projected to be fully vested by December 2030, when the Foundation’s allocation fully vests. A full breakdown of AVAX vesting schedules can be found on Messari’s Token Unlock page in the new Avalanche Messari Portal.

All transaction fees on Avalanche are burned, and validators and stakers are rewarded with the other half of the initial supply that was not minted, which is 360.0 million AVAX, this supply is distributed as inflationary staking rewards. Inflation is according to a dynamic schedule depending on the amounts staked and the time staked. As more users stake AVAX for more extended periods, more AVAX is issued as inflationary staking rewards. The annualized inflation rate in Q2’25 stayed relatively flat at 3.8%, while the eligible supply staked grew from 46.5% to 47.9%.

Network Analysis

In Q2 2025, when aggregating transactions across the C-Chain and all Avalanche L1s, average daily transactions grew 169.91% QoQ to 10.1 million, up from 3.7 million in Q1’25. Over the same period, average daily active addresses (DAAs) increased by 210.45% QoQ to 519,954, up from 167,356 in Q1’25.

Avalanche C-Chain

In Q2 2025, Avalanche continued to reduce transaction fees, with average fees declining 42.7% QoQ from $0.05 to $0.03. This reduction likely reflects the impact of the Octane upgrade, which introduced a dynamic fee mechanism on Avalanche’s C-Chain to enable real-time fee adjustments and lower transaction costs.

Usage

In Q2 2025, Avalanche’s C-Chain recorded strong usage growth. Average daily transactions rose 493.4% QoQ, from 244,995 at the end of Q1 to 1.4 million at the end of Q2. Daily active addresses also increased, rising 57.0% QoQ from 29,554 to 46,397. Notably, daily active addresses spiked to 419,619 on May 11, likely driven by users’ increased activity to prepare for the May 15 launch of MapleStory N.

Security and Decentralization

Avalanche uses a Proof-of-Stake (PoS) consensus mechanism known as “Avalanche Consensus.” Avalanche’s P-Chain is responsible for validator coordination and staking operations. Both C-Chain and X-Chain utilize the entire P-Chain validator set for consensus. To determine if a transaction is valid, validators on Avalanche use repeated sub-sampling voting of a minor, random subset of all validators. Consensus occurs once a sufficient majority of validators agree over consecutive rounds. Both the necessary majority and consecutive rounds are configurable. Additionally, the more tokens staked/delegated to a validator, the more influential that validator is in the consensus process.

Avalanche’s validator count increased 2.5% QoQ in Q2, from 1,401 to 1,436. Total staked AVAX also grew, rising from 211.9 million AVAX to 221.4 million AVAX, a 4.5% increase.

Technical Developments

Octane Upgrade

On April 8, 2025, Avalanche implemented the Octane upgrade on mainnet, activating ACP-176. This upgrade introduced a dynamic fee mechanism designed to reduce gas fees and improve the C-Chain’s ability to handle future increases in network demand.

Prior to Octane, the C-Chain used a modified EIP-1559 model with a static gas target of 15 million per 10-second rolling window. This setup often caused volatility in fees, as large blocks would trigger elevated gas prices across subsequent blocks, even if they were relatively small.

Octane mitigates this issue by incorporating the fee calculation method introduced in ACP-103. By adjusting how base fees respond to gas consumption, the upgrade enhances fee predictability and significantly reduces average transaction costs on the C-Chain.

Validator Voting on Target Gas Consumption

The Octane upgrade also introduced dynamic target gas consumption adjustments through validator voting. Previously, modifying the C-Chain’s static gas target required a full network upgrade, limiting responsiveness to hardware improvements or changing network conditions.

With ACP-176, block proposers (validators) can now independently vote on their preferred target gas consumption rate. This flexibility allows the network to adjust resource usage more efficiently, without the need for disruptive upgrades. Validators may either adopt the default network configuration or define their own target rate based on operational considerations.

Circle’s Paymaster protocol

Circle expanded its Paymaster protocol to the Avalanche C-Chain, enabling users to pay for gas fees using USDC instead of AVAX. This integration introduces native support for Externally Owned Accounts (EOAs) via EIP-7702, streamlining the user experience and abstracting away the need to manage native gas tokens for transaction execution.

Ecosystem Analysis

In Q2 2025, Avalanche’s DeFi ecosystem remained diverse, with its DeFi diversity score increasing 16.7% QoQ from 12 to 14. DeFi TVL rose 37.1% QoQ, from $1.1 billion to $1.5 billion. In contrast, stablecoin market cap on Avalanche declined 23.8%, falling from $1.9 billion to $1.5 billion. Try Your Best (TYB), a Web3 loyalty engagement platform, raised $11.0 million in Q2 from investors including Coinbase Ventures, Offline Ventures, and Strobe Ventures. TYB is built on the Avalanche blockchain.

DeFi

In Q2 2025, Avalanche’s C-Chain DeFi TVL (USD) increased 37.0% QoQ from $1.1 billion to $1.5 billion. TVL in AVAX rose 43.1% QoQ from 59.8 million to 85.4 million.

The top three protocols by TVL on Avalanche C-Chain represent over 70% of the TVL in Q2’25:

Aave: The largest protocol by TVL, saw an increase of 38.7% QoQ from $515.2 million to $714.4 million. Additionally, Aave’s TVL dominance increased from 45.9% to 46.2%.

Benqi: The second-largest protocol by TVL increased 21.6% QoQ from $236.0 million to $287.0 million. By the end of Q2’25, Benqi’s TVL dominance decreased from 21% in Q1’25 to 18.5%.

Euler Finance: The third-largest protocol by TVL, Euler Finance launched in April and ended with $137.6 million in TVL, taking the third spot from previous holder LFJ.

Average daily DEX volume on Avalanche C-Chain declined 17.2% QoQ in Q2’25, falling from $175.1 million to $144.8 million. Despite the broader contraction in onchain trading activity, Pharaoh emerged as the leading decentralized exchange by volume, recording a 208.2% QoQ increase from $38.3 million to $69.7 million. In contrast, LFJ experienced a 38.2% decline in average daily volume, decreasing from $87.5 million to $54.0 million. The top five DEXs by average daily trading volume in Q2 were:

Notable DeFi updates in Q2’25:

Silo Finance: On June 25, 2025, Silo Finance launched their V2 product on Avalanche. Silo quickly gained traction on the Avalanche blockchain attracting over 25.0 million in TVL to end Q2’25. Silo Finance is a decentralized lending protocol that creates isolated lending markets for individual tokens, minimizing systemic risk by siloing each asset with a base token like AVAX or USDC. This architecture allows for customizable risk parameters and preserves composability across DeFi.

Avant Protocol: Avant Protocol experienced a meteoric rise in TVL in Q2, going from below $40.0 million to reaching above $80.0 million by the end of Q2’25. Avant Protocol is a DeFi platform on Avalanche designed to offer stable-value and bitcoin-backed tokens. It provides products such as avUSD (USDC-backed stablecoin), savUSD (staked version with yield), avUSDx (junior tranche of savUSD), and avBTC (BTC-backed token). Avant aims to democratize access to advanced yield strategies and decentralized financial tools.

Avalanche C-Chain’s stablecoin market cap declined 23.8% QoQ in Q2’25, falling from $1.9 billion to $1.4 billion. It remained the ninth-largest chain by stablecoin market cap. USDC ended the quarter as the leading stablecoin on Avalanche, comprising 41.6% of the total with $612.2 million in supply, down 6.3% QoQ. USDT followed, representing 34.7% of the stablecoin market with $511.5 million, a 51.9% decrease from $1.1 billion. USDT’s share fell from 55.1% in Q1, marking a shift in dominance to USDC.

Enterprise and RWA

In Q2, Avalanche continued to make advancements in RWA and enterprise adoption. Notable partnerships and announcements include:

• In April 2025, Nonco launched a foreign exchange (FX) onchain protocol with backing from VanEck. Nonco, a digital asset trading firm, aims to bridge FX liquidity with the active stablecoin market.
• In April 2025, Watr, the blockchain infrastructure, announced it would be moving to an Avalanche L1. Watr is a purpose-built platform to handle the $20.0 trillion global commodities industry.
• In April 2025, WisdomTree expanded its tokenized fund offerings to Avalanche. With their WisdomTree Connect, they are able to offer equities, money markets, fixed income, and asset allocation model funds all onchain on Avalanche.
• In April 2025, it was announced that SMBC would partner with AvaLabs and Fireblocks to develop a stablecoin for release in 2026.
• In April 2025, financial infrastructure provider Axiym surpassed $132.0 million in global payments volume settled on the Avalanche C-Chain. Axiym offers real-time liquidity to licensed money service businesses.
• In May 2025, VanEck launched its first tokenized fund, the VanEck Treasury Fund (VBILL), that allows for Avalanche users access to short-term U.S. treasury debt.
• In May 2025, music platform EVEN announced the launch of a dedicated Avalanche L1 built with AvaCloud to support its direct-to-fan distribution model. EVEN aims to enhance scalability and enable token-gated access, real-time revenue sharing, and high-throughput music drops.
• In May 2025, real estate infrastructure firm Balcony signed a five-year agreement with Bergen County, New Jersey, to digitize over 370,000 property records, representing approximately $240.0 billion in real estate value, on a dedicated Avalanche L1 built. The system reduces deed settlement times from 90 days to one and offers tamper-proof, searchable records for 70 municipalities.
• In May 2025, fractional real estate investing platform Mogul Club announced it had built its backend infrastructure on Avalanche to streamline investment, recordkeeping, and title management. Mogul Club plans to bring title records onchain and integrate community-driven rewards.
• In June 2025, compliance platform Blockticity launched a custom Avalanche L1 using AvaCloud to authenticate over $1.2 billion in real-world goods through programmable Certificates of Authenticity (COAs). Migrating from Avalanche C-Chain, the new network enables tamper-evident, AI-enriched COAs that meet U.S. and EU trade standards across agriculture, fashion, and energy sectors.
• In June 2025, VanEck launched its Purpose-Built Fund on Avalanche. The fund will focus on investing in liquid tokens and venture-backed initiatives across sectors such as AI, payments, gaming, and finance. Idle assets will be allocated into Avalanche-native real-world asset products, like tokenized money market funds, to promote liquidity and ecosystem growth
• In June 2025, digital engagement platform Fan3 launched on Avalanche to deliver authenticated fan experiences through onchain ticketing, rewards, and loyalty programs.
• In July 2025, the Detroit Pistons partnered with Uptop to launch Pistons Rewards, a blockchain-powered fan engagement program built on Avalanche. Uptop allows fans to earn redeemable points through linked card purchases, product offers, and game-related activities.
• In July 2025, Tous Les Jours partnered with Avalanche for a campaign that would allow users to redeem onchain vouchers for items from their cafes in Vietnam.

Gaming and others

• In Q2 2025, DomainFi integrated with Avalanche through native support for .avax domain names. The integration allows .avax domains to function as user-readable identifiers and financial assets, tradable, lendable, and composable within Avalanche DeFi protocols.
• In April 2025, the popular battle royale game announced GUN token compatibility across multiple chains, beginning with a launch on Avalanche C-Chain.
• In April 2025, Magic Eden began supporting Avalanche. This enabled the listing and purchase of Avalanche-native NFT collections on its platform.
• In May 2025, Pixelmon announced a strategic partnership with Ava Labs to launch its flagship mobile game, Warden’s Ascent, on Avalanche C-Chain.
• In May 2025, FIFA announced the launch of a proprietary blockchain network built on Avalanche to power its digital collectibles platform, FIFA Collect, and future fan engagement initiatives.
• In May 2025, Gold Fever, a free-to-play survival MMO, launched on a dedicated Avalanche L1 called High Octane. Set on a contested island rich in gold and danger, players join as either adventurers or tribal defenders, engaging in full PvP combat over mining claims and in-game assets.
• In May 2025, Nexpace launched its first title in its MapleStory Universe, known as MapleStory N. MapleStory N is a massive multiplayer online role-playing game (MMORPG) that takes inspiration from the original MapleStory and utilizes NFTs to create a player-driven in-game economy.
• In June 2025, Avalanche launched the Avalanche Battle Pass. The free Battle Pass allowed users to explore the Avalanche gaming ecosystem and acquire exclusive NFT rewards and multi-game perks.

Avalanche L1s

In Q2, Avalanche continued to support an active L1 ecosystem, increasing the number of L1s by 54.8% QoQ from 31 to 48. Notable launches included FIFA’s dedicated L1, developed to support its FIFA Collect digital collectible platform.

There were 48 indexed Avalanche L1s that produced a block in Q2 2025.

In Q2’25, over nine new L1s were launched:

• CX Chain: CX Chain is a purpose-built Avalanche L1 focused on decentralized gaming infrastructure.
• FIFA: The FIFA Blockchain was launched to support FIFA’s suite of digital products. It underpins initiatives such as onchain collectibles, ticketing systems, games, and fan reward programs.
• Good Care: Avalanche L1 focused on mental wealth, transparency and regenerative care
• Koroshi: The Koroshi L1 was developed to serve as the foundational infrastructure for all Koroshi Studio products. The ecosystem includes an NFT collection, a competitive gaming platform, and plans for a multi-platform game, all designed to operate cohesively within a dedicated onchain environment.
• Lucid: Lucid is an L1 focused on luck-based gaming. Designed with provable fairness, instant settlement, and EVM compatibility, Lucid enables developers to launch transparent, verifiable games while offering players trustless and permissionless access.
• Marnisa: Marnisa L1 is focused on bringing transparency to shipping containers and the damages and repairs that are needed for them.
• Lylty Economy: FanHub is developing a personalized digital ecosystem for U.K. sports fans. It will use a data-driven engagement platform to reshape how value is generated and distributed across the fan experience.
• Titan: Titan is focused on bringing K-pop content and fan experiences onchain. Creating virtual worlds for fans to have more immersive experiences with their favourite K-pop artists and groups.
• Tixchain: TixChain powers the Tixbase ticketing platform with a dedicated blockchain infrastructure designed for secure, transparent, and scalable ticket management. It ensures ticket authenticity and transaction processing for event organizers and attendees alike.

Transactions

Avalanche L1s experienced heightened daily transactions in Q2’25, driven primarily by Coqnet, which accounted for 79.4% of all L1 transactions during the quarter. Although the exact cause is unclear, the spike likely stems from the launch of its first application, Dremes.fun, a gambling platform that lets users wager with meme coins.

Active Addresses

Daily active addresses (DAAs) across Avalanche L1s rose significantly in Q2’25, with the average DAA increasing 444.8% QoQ from 68,723 to 374,402. Lamina1 maintained its lead, growing 515% QoQ from 23,585 to 145,058. Notably, Henesys recorded a single-day high of over 1.0 million DAAs ahead of MapleStory N’s May 15 launch, becoming one of the top L1s by DAAs within its first month since launch.

Closing Summary

In Q2 2025, Avalanche recorded a 169.9% QoQ increase in average daily transactions across C-Chain and Avalanche L1s, alongside a 62.9% rise in daily active addresses. This growth was driven by the launch of high-profile projects such as MapleStory N and the FIFA Blockchain, both of which meaningfully boosted onchain engagement. Avalanche’s enterprise presence also expanded, with continued momentum in real-world asset tokenization and strategic developments like VanEck’s investment in Nonco. Relative to Q1, Avalanche delivered a materially stronger performance in Q2, reinforcing its ability to scale usage, attract institutional participation, and execute across gaming, enterprise, and infrastructure segments.

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This report was commissioned by Ava Labs. All content was produced independently by the author(s) and does not necessarily reflect the opinions of Messari, Inc. or the organization that requested the report. The commissioning organization may have input on the content of the report, but Messari maintains editorial control over the final report to retain data accuracy and objectivity. Author(s) may hold cryptocurrencies named in this report. This report is meant for informational purposes only. It is not meant to serve as investment advice. You should conduct your own research and consult an independent financial, tax, or legal advisor before making any investment decisions. Past performance of any asset is not indicative of future results. Please see our Terms of Service for more information.

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