Avalanche (AVAX): Quarterly Activity Report Q3 2024

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Avalanche (AVAX) concluded Q3 2024 with mixed performance indicators. While the broader cryptocurrency market showed signs of recovery, AVAX experienced a slight price dip of 4.1%, closing the quarter at $28.1 from $29.4. Despite this, key ecosystem metrics—particularly Total Value Locked (TVL)—demonstrated strong growth, signaling renewed confidence in the platform’s decentralized finance (DeFi) infrastructure. This report dives into the financial, fundamental, and ecosystem developments that shaped Avalanche’s trajectory in Q3 2024.

Core Keywords

Avalanche Overview: A High-Performance Layer 1

Avalanche is a scalable, energy-efficient layer 1 blockchain built on a unique Proof-of-Stake consensus mechanism known as Snow. Developed by Ava Labs and launched in September 2020, Avalanche supports high throughput, sub-second transaction finality, and low fees—making it ideal for decentralized applications (dApps) and enterprise use cases.

The network operates through three interoperable blockchains:

One of Avalanche’s standout features is its subnet architecture, enabling developers to create custom, application-specific blockchains with tailored rules and governance. This flexibility has made Avalanche a preferred platform for institutional and DeFi projects seeking scalability without sacrificing security.

👉 Discover how Avalanche's subnet technology is reshaping decentralized application development

Financial Performance in Q3 2024

Price and Market Capitalization Trends

After a robust rally in late 2023 (+317.7% in Q4) and early 2024 (+40.2% in Q1), AVAX entered a correction phase in Q2 2024, declining by 45.8%. The momentum did not fully recover in Q3, as the token closed down 4.1% from $29.4 to $28.1.

However, when compared year-over-year, AVAX’s market cap surged by 188%, rising from $4.25 billion in Q3 2023 to **$12.1 billion** by the end of Q3 2024. This expansion was partly fueled by an increase in circulating supply—from 366 million to 407 million AVAX tokens—driven by quarterly inflation rates between 3% and 4.4%.

Despite short-term price volatility, the long-term valuation trend remains positive, reflecting growing investor interest and ecosystem expansion.

Revenue and Net Profit Analysis

Avalanche generates revenue through transaction fees paid on the C-Chain. Net profit is calculated as the difference between protocol revenue and the value of newly issued AVAX tokens distributed to validators and stakers.

In Q4 2023, Avalanche achieved peak protocol revenue of **$56.6 million**, but net profits remained negative (-$21.4 million) due to high staking rewards. As user activity normalized in early 2024, revenues declined sharply, leading to substantial deficits:

In Q3 2024, the deficit improved significantly to -$62.5 million, indicating better alignment between fee income and issuance costs—even amid lower transaction volumes.

This narrowing gap suggests the network is moving toward greater economic sustainability, especially as incentive programs attract new capital.

Fundamental Network Activity: Signs of Slowdown

While TVL surged, core usage metrics painted a different picture.

Transaction Volume and User Engagement

Average daily transactions on the C-Chain dropped by 22.5%, falling from 206,000 in Q2 to approximately 160,000 in Q3. Similarly, daily active addresses declined by 25.3%, from 51,700 to 38,600.

New user acquisition also slowed, with an average of 7,300 new users per day—a 33.2% decrease from Q2.

This downward trend began in early 2024 following the post-hype cooldown after Q4 2023's surge. The summer months typically see reduced blockchain activity across the industry, but Avalanche’s drop was more pronounced than some peers.

The decline in organic activity directly impacts fee generation, meaning a larger portion of staker rewards continues to come from token issuance rather than user-driven revenue—a structural challenge the network must address.

Ecosystem Growth: TVL Rebounds Strongly

Despite weakening fundamentals, Avalanche’s DeFi ecosystem saw impressive gains in Q3 2024.

Total Value Locked (TVL) Surge

Avalanche’s TVL jumped 48.2%, rising from $731.3 million** to **$1.084 billion—marking a major recovery after a 42.7% drop between Q1 and Q2.

Although TVL remains 14.9% below Q1 levels, the rebound signals renewed liquidity inflows and investor confidence.

The primary catalyst? The BOOST campaign launched by the Avalanche Foundation in July 2024.

👉 See how incentive programs are accelerating DeFi adoption on leading blockchains

Top Protocols Driving Growth

We analyzed the top five DeFi protocols by TVL:

Aave and Benqi benefited from broad-based demand for lending and liquidity services, while DeltaPrime’s explosive growth was likely amplified by its participation in the BOOST program, offering enhanced yield incentives.

Notably, LFJ (rebranded from Trader Joe) was the only major protocol to lose TVL despite strong community engagement around its rebranding—suggesting that sentiment doesn’t always translate into capital retention.

FAQ: Understanding Avalanche’s Q3 Trends

Why did AVAX price fall despite TVL growth?

Token price and TVL are influenced by different factors. While TVL reflects capital locked in DeFi protocols—often driven by short-term incentives—price is shaped by market sentiment, macro trends, and trading volume. The BOOST campaign attracted liquidity but didn’t immediately boost speculative demand for AVAX.

Is Avalanche becoming economically sustainable?

Progress is being made. Although net profits remain negative, the deficit narrowed sharply in Q3 to -$62.5M from over -$600M in Q2. As fee revenue stabilizes and issuance is optimized, Avalanche is moving closer to a balanced economic model.

What is the BOOST campaign?

Launched in July 2024 by the Avalanche Foundation, BOOST is a liquidity incentive program rewarding users across top DeFi protocols on Avalanche. It successfully reversed TVL decline and reignited ecosystem participation.

Why are active addresses decreasing?

Lower transaction fees and reduced speculative trading during summer months often lead to decreased user activity. Additionally, some engagement may be shifting to subnets or layer 2 solutions not fully reflected in C-Chain metrics.

How does subnet adoption affect mainnet activity?

Subnets can分流 mainnet traffic by hosting specialized dApps off the C-Chain. While this may reduce visible C-Chain metrics, it strengthens Avalanche’s overall scalability and utility—indicating healthy ecosystem diversification.

Can AVAX rebound in Q4 2024?

Given the improved economic fundamentals and rising institutional interest in subnets, AVAX is well-positioned for a potential rebound if broader market conditions improve.

Final Insights: A Tale of Two Trends

Q3 2024 revealed a dual narrative for Avalanche: declining organic activity versus resurgent DeFi liquidity.

On one hand, falling transaction counts and active addresses highlight challenges in sustaining user engagement outside of incentive-driven periods. On the other, the successful BOOST campaign demonstrates Avalanche’s ability to mobilize capital quickly and strengthen its DeFi ecosystem.

For long-term success, Avalanche must bridge this gap—converting incentivized liquidity into sustainable usage through compelling dApps, improved onboarding, and continued subnet innovation.

As one of the most technically advanced layer 1 blockchains, Avalanche remains a key player in the evolving Web3 landscape—with fundamentals poised for resurgence as market cycles shift.

👉 Explore how next-gen blockchains are driving the future of decentralized finance