- Avalanche has launched “Avalanche Vista” to purchase $50 million of tokenized assets minted on the network.
- AVAX’s price sees stunted growth as accumulation wanes.
In an announcement on 25 July, the foundation behind the Avalanche [AVAX] made known its plans to purchase $50 million of tokenized assets minted on the network.
How much are 1,10,100 AVAXs worth today?
Referred to as “Avalanche Vista,” Ava Labs president John Wu in the press release, noted that the program would “support and demonstrate the value of tokenization, the process of creating an on-chain digital representation of an asset, item or thing–something that Avalanche is designed to facilitate with greater speed, scalability, and customizability.”
Is your portfolio green? Check out the Avalanche Profit Calculator
A move to heal Avalanche’s ailing DeFi vertical?
At press time, the total value of assets (TVL) held across decentralized finance (DeFi) protocols housed within Avalanche was $1.426 billion, its lowest mark in two years.
The last time the network’s TVL was under $1.5 billion was in August 2021, data from DefiLlama showed. After peaking at a high of $13 billion in December of the same year, Avalanche’s TVL has since trended downwards.
On a year-to-date, the chain’s TVL has only grown by a mere 2%. Therefore, Avalanche’s decision to invest in tokenized assets minted on its chain is properly timed.
Source: DefiLlama
Tokenized assets offer a way to bring real-world assets (RWAs) onto the blockchain. This could make them more accessible to a wider range of users. According to DefiLlama data, the interest in the asset category has been steadily increasing.
Since April, RWAs have transitioned from being a relatively niche category within the DeFi space to one of the top 10 categories in terms of popularity and usage.
Source: DefiLlama
With continued demand for this new “shiny” asset class, it could drive traffic in the form of liquidity providers to Avalanche and the many protocols housed within it, thus increasing its TVL.
Further, tokenized assets can be used to create a variety of DeFi applications, such as tokenized lending, tokenized derivatives, and tokenized asset management. This could lead to increased activity on the Avalanche network, boosting its TVL.
Brace up for free fall in AVAX’s value
At press time, Avalanche’s native coin AVAX exchanged hands at $13.22. Trading within a narrow range in the last month, AVAX’s price rallied by a mere 1% in the last month. This could be because its shares have a statistically positive correlation with Bitcoin [BTC], whose price has oscillated between $28,000 and $32,000 since April.
Read Avalanche’s [AVAX] Price Prediction 2023-24
On a D1 chart, AVAX commenced a new bear cycle on 22 July when its MACD line intersected the trend line in a southbound move. Since then, daily trades have been represented by red histogram bars.
AVAX accumulation has dwindled in the past few days. Key momentum indicators were positioned downwards. The alt’s Chaikin Money Flow (CMF), especially, returned a negative -0.08 value at press time. A CMF value below the zero line is a sign of weakness in the market as it signals increased liquidity exit.
Source: AVAX/USDT on Trading View