Avalanche Doubles TVL to $2.1 Billion: Gaming Boom and Institutional Inflows Drive Growth

Avalanche (AVAX) is experiencing a strong rebound. Its total value locked (TVL) has more than doubled since April, now reaching approximately $2.1 billion, according to DeFiLlama. The surge is fueled by a combination of technological upgrades, institutional capital inflows, and a rapidly expanding gaming ecosystem.

Upgrades and institutional demand One of the key drivers was the Octane upgrade, which reduced gas fees and improved network efficiency. In June, VanEck launched a private digital asset fund called the VanEck PurposeBuilt Fund, dedicated to projects running on Avalanche. Another significant step came in August when SkyBridge Capital revealed plans to move around $300 million worth of assets to Avalanche, further strengthening institutional presence in the ecosystem.

Gaming ecosystem on the rise The gaming sector has also played a crucial role in Avalanche’s recovery. The game MapleStory boosted network activity, driving the number of transactions from 620 million in all of 2024 to more than 1.4 billion in just the first half of 2025. “A combination of lower fees, growing tokenization, and institutional inflows has made Avalanche cheaper and more attractive,” said Nic Puckrin, CEO and founder of Coin Bureau. He added that AVAX’s price reflects this momentum – currently trading at $29, marking a 52% increase over the past three months.

Avalanche as a hub for RWA and DeFi According to Puckrin, Avalanche is cementing its position as a hub for real-world asset (RWA) tokenization while also becoming a major player in DeFi. “With greater liquidity and cheaper transactions, both developers and users have stronger incentives to build and participate,” he noted. “This positions Avalanche to compete more directly with Solana and Ethereum Layer 2 platforms, especially in areas where tokenization is accelerating.”

Risks and challenges Experts, however, point to vulnerabilities. Puckrin warned that Avalanche’s growth is still heavily dependent on institutional demand – which could reverse quickly. Regulatory scrutiny of tokenized assets and the fragmentation of subnets also remain concerns. “TVL can be a misleading metric,” added Doug Colkitt, first contributor to the Fogo project. “But doubling in just a few months shows that Avalanche has found its niche, particularly in RWAs and DeFi derivatives.” Colkitt also cautioned that the key question now is whether liquidity will persist once incentives fade, or if this is just another wave of “mercenary capital.”

Conclusion After a challenging period, Avalanche is staging a comeback – its TVL has jumped from $1 billion in April to $2.1 billion in September. The rally has been powered by institutional inflows, gaming projects, and network upgrades. The challenge now is to turn this momentum into sustainable, long-term adoption rather than a short-lived boom.

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