Avalanche(AVAX), the native token on the eponymous Blockchain surged after news that Ava Labs is raising more capital. Ava, the blockchain’s principal developer, could become one of the most valuable crypto startups as a result of the planned capital raise.
AVAX soared nearly 7% in the last 12 hours and was trading at $81.58. The recent rebound saw the token recoup a bulk of its losses in the last three days when prices were being squeezed by a broader crypto bear market.
Avalanche is a popular smart contracts blockchain nicknamed by many as “Ethereum Killer” due to its claims to fix several shortcomings in the larger network.
Ava Labs to raise $350 million
Ava Labs is raising $350 million in new funding according to Bloomberg, which will value the company at $5.25 billion. The new funding comes as AVAX tries to compete with other smart contract networks such as Ethereum and Solana.
The chain, which was launched in September 2020, saw a rapid surge in popularity. AVAX is now the tenth most valuable token with a market capitalization of $21.8 billion.
It was not immediately evident what the capital raising medium will be. But Avalanche has attracted investments from several major block chain investors, such as Polychain Capital, Three Arrows, and Andreessen Horowitz.
The Avalanche Foundation raised $230 million in September through a private sale of AVAX tokens.
Avalanche attracts DeFi’s interest
Terra community the Luna Foundation Guard (LFG) recently added about $100 million in AVAX to its UST reserves. While AVAX already has its own DeFi protocols, interest from a much bigger player like Terra is a bullish sign for the token.
LFG purchase had boosted AVAX prices
Trader Joe’s is currently Avalanche’s largest DeFi exchange. The protocol holds about $1.35 billion in total value locked, and is the 26th largest protocol, according to DeFi Llama.
But finance isn’t the only appeal for Avalanche. The blockchain permits ETH-based applications, and also allows for game development- two features that have been credited with the blockchain’s quick rise in popularity.