Emin Gün Sirer, co-founder of Avalanche. Photographer: Matthew Busch/Bloomberg
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It’s starting to feel like 2021 again – at least for the Avalanche Foundation based in the British Virgin Islands. It recently raised $250 million through a private token sale for its blockchain platform, a type of big-money round that largely died out during the crypto winter. This time, the lead investors – Galaxy Digital, Dragonfly and ParaFi Capital – are joined by over 40 other firms, including SkyBridge and Morgan Creek Digital, who appear to think the market is warming up enough for a big bounce.
But the Avalanche Foundation insists it’s not about the money. In fact, the Treasury currently has its own AVAX token worth about $3 billion Forbes’ Estimates. Avalanche co-founder Emin Gün Sirer says: “The main goal was to achieve alignment and incentivize the right partners to build with.”
This isn’t the Avalanche’s first major fundraiser. Back in December 2021, at the height of the last crypto bull run, the foundation raised $230 million in a similarly splashy token sale.
On December 16, Avalanche will launch “Avalanche9000,” its most ambitious upgrade yet that promises to dramatically reduce the cost of adopting blockchains in its ecosystem. Previously, setting up a node required an upfront deposit of 2,000 AVAX, which is a large sum at $48 per token (as of December 11). Now validators have to pay 1.33 AVAX per month on a subscription-like basis.
The upgrade is intended to strengthen Avalanche’s multi-chain vision, which is based on the premise that there is no one size fits all. Gün Sirer expresses this philosophy: “A single chain cannot cover all use cases, no matter how quickly you create it. The only successful architecture is multi-chain,” he says. “The horizontal scaling we can enjoy is fundamentally different from Ethereum, Solana and others.”
This direction seems to be paying off. Battle royale game Off The Grid, developed on Avalanche’s infrastructure, became the most popular free-to-download game on the Epic Games Store just three days after its early access release in October.
In the financial sector, BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), the world’s largest token fund with a market cap of $561.5 million, originally launched on Ethereum, now operates alongside Franklin Templeton’s OnChain US Government Money Market Fund also on Avalanche. ParaFi Capital, one of the lead investors, also tokenized a portion of its venture fund on Avalanche in September.
“We are a large institutional player that wants to do business with other like-minded people,” says Jason Urban, Global Head of Trading at Galaxy, emphasizing the strategic importance of the deal. “By expanding Avalanche’s reach among institutional investors, we are accelerating its ability to innovate and scale” (Approximately half of the investors in the capital raise are counterparties to Galaxy).
Meanwhile, Dragonfly managing partner Haseeb Qureshi points out that potential regulatory clarity under the Trump administration could be a catalyst for the next wave of crypto adoption. “Avalanche is preparing to open the floodgates to new entrants,” he says. “Expansion of this magnitude, particularly for traditional companies, requires significant resources.”
