Why is Avalanche’s $180,000,000 Liquidity Support Important for DeFi Growth?

The new program comes in aid of encouraging more applications and assets to move to Avalanche’s DeFi platform.

Incentivizing Innovation

The Avalanche Foundation has announced ‘Avalanche Rush’, a new $180 million liquidity mining scheme that aims to lure innovation and highlight their Layer 1 capabilities.

The announcement follows a multi-stage deployment that’s begun with the Aave and Curve protocols, and will grow to include other assets in the near future. In this initial stage Avalanche has pledged up to $20 million AVAX tokens for Aave and $7 million AVAX tokens for Curve over three months. 

“Avalanche is a wonderful ecosystem to experience, both as a user and as a builder,” Benqi Co-founder J.D. Gagnon, told Cointelegraph. “The fast finality, low fees, and security guarantees make it 10x better than many other networks.”

The Avalanche Foundation has also simultaneously sponsored the launch of Benqi’s DeFi protocol native to the Avalanche network. A $3 million allocation commenced on August 19th, which was confirmed by Avalanche via a Medium blog post. 

Quick & Effective

The significant liquidity support on offer alongside the capabilities of the Avalanche Network means that there is serious potential for innovation, a net positive for DeFi growth.

“This is an allocation for effectively a fund that will be disbursed over time, not all of that amount has been allocated,” Luigi D’Onorio, director at Ava Labs, explained to Blockcrypto. “This is really our effort to showcase what Avalanche can do as a Layer 1 technology and bring over some of the largest protocols that exist.”

The foundation is distinct from Ava Labs, with the lab understood as a software development company and the foundation playing a broader, foundational role. D’Onorio’s comment explains the fund will be strategically deployed to help projects in the best way possible. 

The Bridge to Success

Avalanche has always attracted a good deal of optimism from its followers who underline the proof-of-stake protocol as the quickest in the blockchain space. 

The Avalanche Rush incentive comes on the back of a new cross-chain bridge project that allowed for the seamless transfer of assets between blockchains. 

A new bridge that constructed a connection with the Ethereum network thus allowing DeFi users to transfer assets, was unveiled by Avalanche in January this year. That particular bridge was not without its issues, prompting Emin Gün Sirer, director at Avalanche Foundation to explain to Blockcrypto that it proved expensive to use and offered a poor user experience “on days when Ethereum had hiccups.”

A new bridge was established, one that uses a bridge technology that is easier, cheaper and more effective. This has garnered a lot of enthusiasm, the new bridge has prompted plaudits by onlookers such as ‘Hxro Labs’, the crypto YouTube channel. 

Whether the new better bridge will be able to take the weight of this new substantial incentive scheme and the protocols involved will be interesting to see. 

“I think every one of these new launches is both a challenge and an opportunity for us and it’s always going to be a testament to just how scalable the underlying technology is,” Gün Sirer told Blockcrypto.

These challenges are indeed an opportunity for Avalanche to underline their credentials as the quickest and most effective in the blockchain space. Whether this will be achieved is something we look forward to covering.

Source : bsc.news