Despite Being Flush, Avalanche Raises $250 Million From Galaxy And Others #CriptoNews

It’s starting to feel like 2021 again—at least for the British Virgin Islands-based Avalanche Foundation. It recently raised $250 million via a private token sale for its blockchain platform, the kind of big-ticket round that had largely gone extinct during 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 apparently think the market is warming up enough for a big swing.

But the Avalanche Foundation insists it’s not about the money. In fact, its treasury currently holds about $3 billion worth of its own AVAX token, according to Forbes’ estimates. Avalanche cofounder Emin Gün Sirer says, “The primary goal was to get alignment and incentivize the right kinds of partners to build with.”

This isn’t Avalanche’s first major fundraising effort. 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, promising to dramatically reduce costs for launching blockchains within its ecosystem. Before, setting up a node required an upfront payment of 2,000 AVAX, a hefty sum at $48 per token as of December 11. Now, validators are to pay 1.33 AVAX per month on a subscription-like basis.

The upgrade is intended to bolster Avalanche’s multi-chain vision, built on the premise that one size doesn’t fit all. Gün Sirer articulates this philosophy: “A single chain cannot cater to all use cases, no matter how fast you make it. The only winning architecture is multi-chain,” he says. “Horizontal scaling that we can enjoy is fundamentally different from Ethereum, Solana and others.”

That direction seems to be paying off. The battle royale game “Off The Grid,” developed on Avalanche’s infrastructure, became the most popular free-to-download game in 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 tokenized fund with a market capitalization of $561.5 million, initially launched on Ethereum, now operates on Avalanche too, alongside Franklin Templeton’s OnChain U.S. Government Money Market Fund. ParaFi Capital, one of the lead investors, also tokenized a part 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, highlighting the strategic importance of the deal. “By broadening Avalanche’s reach among institutional investors, we’re accelerating its capacity for innovation and scalability” (Approximately half of the investors in the raise are counterparties of Galaxy).

Meanwhile, Dragonfly’s managing partner Haseeb Qureshi points to potential regulatory clarity under the Trump administration as a catalyst for the next wave of crypto adoption. “Avalanche is positioning itself for the opening of floodgates for new entrants,” he says. “Build-outs of this scale, especially for traditional companies, require significant resources.”