May 28, 2023

Avalanche: Avalanche as an investment in 2023

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Avalanche: Avalanche as an investment in 2023


Ethereum developers have just managed toupgrade Shapella, as one of the main competitors, Avalanche, announced the improvement of its ecosystem. What is it and how will it affect the price of AVAX?

Cortina Update

In mid-April 2023, Avalanche developers from Ava Labs announced that on Tuesday, April 25, they will hold a
an update called Cortina.The update is a protocol optimization that is not compatible with versions older than v.1.10.0. If you don't update your node before Cortina is activated, you will no longer be able to confirm new blocks, and you will be reflected offline to all other participants, putting your staking rewards at risk.

The Avalanche team testedupdate on the Fuji testnet on April 6, 2023. Everything went well. It is worth noting that the developers continue the mountain theme: Fuji is a mountain in Japan, and Cortina is a reference to the Italian ski resort Cortina d’Ampezzo.

Unlike Ethereum's Shapella, which allowedwithdraw tokens from staking, the Avalanche update is technical in nature. X-Chain will move from Avalanche Consensus to Snowman++ Consensus. Now all structures (also P-Chain and C-Chain) of the ecosystem will be on a single protocol. There will be a so-called linearization in X-Chain. This will reduce the computer power involved in the process, as well as increase the efficiency of research and development.

Avalanche Warp Messaging mechanism will be implemented(AWM), which will simplify the process of transferring coins from X-Chain to various exchanges. Another innovation will be the Batched Delegator Awards feature. She will allow
simplify the reward distribution system for validators with a large number of delegates. Batched Delegator Awards will be implemented on P-Chain. In addition, Cortina
will increase the maximum block size on C-Chain.

And how will the upgrade affect the value of the AVAX token?

Avalanche technical analysis

Cortina should have a positive impact on theAvalanche platform. It does not involve, like Shapella, token withdrawals and a large increase in supply. In this regard, we can assume that the price of AVAX will rise. Or at least stop falling. Since April 19, the coin has lost more than 20% in value. However, since the beginning of the year, the dynamics is still positive - growth is more than 57%.

From March 5 to April 16 in the Avalanche network, a day fromday the number of active addresses grew. This was accompanied by the growth of AVAX. However, from April 16 to April 22, the dynamics turned out to be negative. Perhaps a recovery in activity will restore investors' faith in Avalanche.

Avalanche: Avalanche as an investment in 2023


In terms of technical analysis, AVAX is nowis in a downtrend. So far there are no signs of a change in trend. The price recently moved below the 50-day moving average (marked in yellow), which should not add optimism to the bulls. A return to growth is possible if the $17 resistance level is overcome. The nearest support level is $16.2.

Avalanche: Avalanche as an investment in 2023


The market capitalization of Avalanche as of April 24 is about $5.5 billion. According to this indicator, the cryptocurrency ranks 16th between TRON and Dai.

Strengthening partnerships

Back in January, it became known that Avalanche would partner with Jeff Bezos's Amazon company in the field of cloud computing. However, the platform decided not to stop there.

Avalanche is about to launch a testnetSpruce subnet Evergreen to attract institutional investors. It is already known that at least four investment companies will participate in the trial: T. Rowe Price, Cumberland, Wellington Management Group and WisdomTree Investments. The test network will allow third-party investors to use the Avalanche platform without the risk of losing their investments.

At the initial stage, investors willuse DeFi applications for currency exchange and interest rate swap trading. At the next stages, it is planned to introduce additional functionality: credit insurance, trading, third-party financing. However, this just requires the above-mentioned institutional investors who will give feedback. By doing this, they will help to provide a high-quality and convenient service.

In favor of bringing their initiative to life Avalanche
cites as an example a report by Uniswap Labs, which is behindexchange of the same name and Circle Internet Financial, which is best known for its USDC stablecoin. The report found that about $2.2 trillion of customer funds were in daily danger on regular exchanges last year. The indicator tends to increase, since in 2019 only $1.9 trillion was at risk of loss every day. That is why Ava Labs consider it appropriate to introduce Spruce.

“This groundbreaking collaboration will createa safe, controlled and exciting prospect for the world's financial institutions. We look to Spruce, and more broadly the Avalanche Evegreen Subnetworks, as a significant step forward in digital finance exploration,” said John Wu, president of the company.

Total:Avalanche continues to evolve technically. Cortina will be updated soon. This may help slow down the fall in the price of the AVAX token. In addition, Ava Labs continues to build mutually beneficial business relationships with large companies.

This material and the information in it does not constitute individual or other investment advice. The opinion of the editors may not coincide with the opinions of the author, analytical portals and experts.