decrypt.co
Ethereum competitor Avalanche has continued to soar in value after nabbing a spot at the weekend in the top 10 biggest cryptocurrencies by market value.
The native cryptocurrency of the high-speed, low-cost blockchain, AVAX, today spiked by 10%, according to CoinGecko data. Earlier today, the crypto asset hit a daily high of $142.34. It has since corrected somewhat and is currently trading at around $138.
In the past week alone, it’s up 44.3%, while pretty much every other major cryptocurrency is down. Its market cap stands at over $30 billion.
Avalanche is designed to provide a network where decentralized finance (DeFi) products can be built, just like Ethereum. DeFi products are experimental apps that provide automated financial services but without an intermediary.
But building on Ethereum, the network behind the second biggest cryptocurrency by market cap, can be costly and slow when activity on the network ticks up. Ethereum can only process roughly 30 transactions per second, and it’s not uncommon for transaction fees on the network to reach hundreds of dollars.
This isn’t the case with Avalanche, which can process up to 4,500 transactions per second. Fees on the network can be lower than $1 for a simple transaction. Big transactions can be more costly, though. Ethereum developers are currently working towards a long-awaited ETH2.0 upgrade which aims to make the network faster and less expensive to use, and therefore more competitive with second and third generation blockchains such as Avalanche and Solana.
Investors eyeing up the “next Ethereum” could be part of the reason why Avalanche is soaring in value while Bitcoin and Ethereum continue to experience sell-offs.
Zhu Su, CEO of Singaporean crypto hedge fund Three Arrows Capital, said Sunday that he had “abandoned Ethereum despite supporting it in the past”—and that he is an AVAX investor.
Yes I have abandoned Ethereum despite supporting it in the past.
Yes Ethereum has abandoned its users despite supporting them in the past.
The idea of sitting around jerking off watching the burn and concocting purity tests, while zero newcomers can afford the chain, is gross.
— Zhu Su 🔺 (@zhusu) November 21, 2021
Su called the behavior of the Ethereum community “gross” and said that Ethereum users were “livid” at how expensive the blockchain had become. The price of the AVAX has continued to shoot up since he made those comments.
He may have a point, too: using Avalanche to make a DeFi transaction costs a fraction of what it does on Ethereum and is miles quicker—usually instant. Ethereum can take a long time, sometimes hours, while its miners prioritize to process larger, more expensive transactions.
And by looking at Avalanche’s recent ascent, it looks like investors and DeFi users are appreciating the blockchain’s benefits.