Surge in Avalanche Contract Implementation – Is AVAX Feeling the Ripple Effect
Avalanche (AVAX) has seen progress on multiple fronts in recent months. In particular, one area that has grown the most is the adoption of smart contracts. A surge in contract adoption on the Avalanche network could imply greater use and acceptance of the protocol. More contracts are placed on the network indicating that more developers are building on Avalanche and developing decentralized applications (dApps) that can operate on the network.
This could lead to a wider range of use cases for the network and possibly attract more users and projects, increasing the demand for the native currency, AVAX. Despite an explosion in the use of smart contracts, Avalanche is unable to do so effectively in the DeFi sector.
Its DEX volume has dropped significantly in recent months, from 311 million to 13.74 million (currently). This impacted Avalanche’s TVL, which was also down. In addition, interest in BTC.b has waned. As background, BTC.b is a Bitcoin token wrapped in Avalanche used for DeFi reasons, where ‘b’ means ‘Bitcoin wrapped’. Bitcoins are kept in custody, and Avalanche issues matching encapsulated tokens for use in DeFi activities such as trading, yield farming, and lending.
According to Dune Analytics, all of the Avalanche network’s DEXs have seen their BTC usage drop.b.
Trader Joe’s, one of the most popular DEX protocols, has suffered the most. According to Dapp Radar, its total volume fell by 40.2% in the previous 24 hours. At the time of publication, the network’s total volume was $7.2 million.
The number of transactions on the protocol decreased by 1.06% in the previous 24 hours as a consequence of this decrease in volume. The influence of the protocol is also visible in the NFT industry. According to Santiment statistics, the total number of NFT transactions in Avalanche has dropped dramatically, reaching 581 at press time.