Blockchain analytics firm Nansen released a comprehensive research report yesterday on the emerging EVM-compatible layer-1 platform Avalanche.
The Avalanche ecosystem aims to address Ethereum’s scalability challenges by offering sub-second transaction finality, a distinctive consensus upgrade, and high transaction throughput to deliver more cost-effective products. Major Ethereum projects such as Aave and Curve have already migrated to Avalanche, and more DeFi and crypto dApps are expected to follow.
Here are 10 key highlights from Nansen’s report:
- Robust Ecosystem: Avalanche’s broad ecosystem serves a wide range of blockchain needs—from DeFi and NFTs to DEXs and play-to-earn games. Its compatibility with the Ethereum Virtual Machine (EVM) enables notable dApps across the blockchain spectrum to migrate without friction.
- Total Value Locked and dApps: Avalanche reports a Total Value Locked (TVL) of $13.9 billion, with over 25% attributed to Aave. Native applications such as Trader Joe and Benqi account for a large portion of the remaining TVL. Other notable native projects include the successful OHM fork Wonderland and the play-to-earn game Crabada.
- Avalanche Bridge: To support a multichain future, Avalanche built the Avalanche Bridge to enable fast, secure, and cost-efficient transfers of ERC-20 tokens between Ethereum and Avalanche’s C-Chain. The bridge supports transfers of many tokens including WETH, USDC, and WBTC. Transfers between Ethereum and Avalanche typically take around 15 minutes and cost roughly $3.
- Bridge Activity: Activity across the bridge reached $370 million in August following the Avalanche Foundation’s announcement of “Avalanche Rush,” a $180 million DeFi incentives program. Backed by reputable VCs and liquidity mining initiatives, activity peaked on September 23 when bridge volume hit $600 million.
- Transaction Throughput: Avalanche has demonstrated throughput above 4,500 transactions per second (tps) and transaction finality under two seconds. By comparison, Bitcoin manages around 7 tps with finality measured in nearly 60 minutes, while Ethereum averages roughly 14 tps with about six minutes to finality.
- Daily Transactions: Daily transaction counts rose significantly after the August announcement of Avalanche Rush, which attracted blue-chip DeFi projects. A similar upward trend occurred after Avalanche formed a strategic partnership with Deloitte. The recent partnership with Fireblocks is expected to further boost Avalanche’s daily transaction volumes in the coming months.
- Avalanche vs. Ethereum Gas Fees: High gas fees on Ethereum—especially since August—have been blamed for pricing out retail users and undermining business models. While Ethereum attributes some of the rise to increased NFT activity, Avalanche has remained committed to low-cost accessibility. The difference was stark on November 26, when daily gas fees paid on Avalanche totaled $1,311,682 versus $51,389,748 on Ethereum.
- Avalanche’s Focus on NFTs: Several NFT projects have leveraged Avalanche’s network, including sports NFT marketplace Topps, metaverse ecosystem Kalao, P2P NFT marketplace Venly Market, and play-to-earn game Crabada. The Avalanche Foundation has earmarked $200 million of recently raised funds for NFTs. Nevertheless, DeFi dApps remain the most impactful applications on the network.
- Transaction Ratio: Avalanche vs. Ethereum: The ratio of transactions between the two platforms rose from 1% in early August to a peak of 54% on November 26. This shift is largely attributed to Avalanche’s lower gas costs. On that day, Avalanche processed more than half the number of Ethereum’s daily transactions at a cost more than 20 times cheaper than Ethereum’s.
- Smart Money Share: Avalanche is among the leading alternative L1 chains attracting attention from prominent investment firms such as Three Arrows Capital and Polychain Capital. The network hosts 31% of overall “smart money,” 46% of smart NFT minters, and 24% of smart NFT traders, placing Avalanche among the top five chains by smart-money engagement.
While higher performance, faster transactions, and lower fees position Avalanche as a strong contender to challenge Ethereum, the long-term outcome will depend on whether its liquidity incentive programs sustain the momentum gained over the past 12 months. Its vibrant ecosystem of native apps, integration of popular Ethereum-based protocols, and shared security approaches make Avalanche a blockchain platform to watch in the crypto space.