- Crypto Analyst reveals why he expects some massive upside for AVAX.
- The pundit outlines advantages of the network like scarcity and utility as indicators of future potential.
- AVAX has had a very bullish week, up 30% in the last 7 days.
Crypto analyst ‘CovDuk’ has in a Twitter thread given a breakdown of why he expects exponential growth for Avalanche (AVAX). It comes as the network is enjoying a very bullish week.
A ‘Bullish Case’ For Avalanche
A crypto analyst going by the pseudonym CovDuk on Twitter explained why he believes the Avalanche network has the potential for massive upsides. Notably, the breakdown comes as the Layer 1 blockchain enjoys a very bullish week.
Avalanche is a decentralized Layer 1 blockchain much like Ethereum, which is capable of executing smart contracts. It is open-source and uses a Proof-of-Stake (POS) consensus mechanism. The network boasts security on par with Ethereum and Bitcoin while offering faster and cheaper financial capabilities.
CovDuk, in his thread, noted that AVAX has a limited supply of 720 Million AVAX tokens, half of which were released at launch. The analyst also noted that by burning transaction fees, “there is no loss of value due to inflation,” effectively creating scarcity.
The pundit added that aside from being deflationary, the network provided a lot of utility. AVAX, he said, is “lighting fast, cheap, and very scalable through its subnet tech,” adding that it had “led to many devs coming on board and building on AVAX.” It was noted that there was a lot of DeFi protocol development on the network as a result of its transaction speed of about 6500 TPS.
This speed results from the network’s subnet technology. CovDuk explained that “subnets are essentially mini blockchains that make up a larger chain, drastically speeding things up,” adding that “through subnets, anyone can create a custom blockchain to suit the needs of their apps.” Notably, the founder of Ava Labs, Emin Gün Sirer, quoted CovDuk’s thread, calling it an “excellent thread.”
Multiverse Incentive And Price Action
Over the last couple of months, Avalanche has become notorious for creating funds to encourage developers to build projects on the base platform. To encourage developers to take advantage of the network’s subnet technology, they have created a fund of 4 million AVAX, worth over $348 million, going by today’s exchange rates to start developing what it has tagged the “Multiverse.”
The initiative is expected to encourage the development of blockchains for specific applications with use cases, including Web3, gaming, and DeFi. CovDuk’s thread revealed that several firms were choosing to build on Avalanche for this very reason, saying, “different institutes can build apps based on their needs, requirements, and rules.”
Avalanche’s native token AVAX has led the top ten digital assets by market cap in gains in the last 7 days. AVAX is currently trading at the $86.45 price point, up 1.9% in the last 24 hours and 30.4% in the last 7 days. The crypto asset is currently ranked 10th by market cap, with a market valuation of $23.6 billion.