The Avalanche Foundation has launched a new fund dedicated to the development of the Avalanche blockchain’s ecosystem.
Called “Blizzard”, the fund is composed of contributions from Ava Labs (New-York based company developing Avalanche’s platform), the Avalanche Foundation (Singapore-based non-profit that oversees the blockchain’s larger ecosystem) and investors in Avalanche’s latest $230 million capital raise—Polychain Capital, Three Arrows Capital, Dragonfly Capital, CMS Holdings, R/Crypto Fund, Collab+Currency, Lvna Capital—among others. Due to its cash and token holdings (currently in AVAX, Avalanche’s native cryptocurrency, though other tokens may be added as the fund invests in projects) the fund’s value will fluctuate but is currently worth about $220 million, according to John Wu, president of Ava Labs.
Blizzard is the latest example in the growing trend of nine-figure incentive programs by blockchain teams to bootstrap growth. It is actually on the smaller side, compared to Binance’s $1 billion fund for its Binance Smart Chain, announced last month, or the latest $800 million grants fund by the Near protocol, primarily focused on the sprawling area of decentralized finance (DeFi). Including similar initiatives from Algorand and Celo, ecosystem development funds earmarked at least $2.2 billion in growth capital in the past two months.
The new fund builds on top of Avalanche’s $180 million DeFi incentive program, “Avalanche Rush”, announced on August 18. Since then, the total number of transactions on the network has gone up from a little over 4 million to 18.5 million, according to analytics tool Avalanche Explore, and Avalanche’s AVAX token has tripled in price—from $21 to $63.
It will be primarily focused on four key areas: DeFi, enterprise applications, NFTs and culture applications, encompassing social tokens and gaming, and could also be used for other initiatives, such as security token issuances and development of digital identities. Wu said that Blizzard hasn’t been pre-allocated but will be used for equity investments, token purchases and help with partnership efforts, technology and business development.
“Blizzard is entering the Avalanche community at a pivotal moment, where this influx of users and activity demands constant innovation in new applications and use cases on the platform,” said Wu in e-mailed comments to Forbes. “This is a massive step in the maturation of the Avalanche ecosystem and its support system for builders developing the future of this industry.”
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More than 320 projects are now building on Avalanche’s platform, and the total amount of assets locked in Avalanche’s DeFi applications grew from $300 million in August to the current $8.45 billion, according to data provider for decentralized finance DeFi Llama. Avalanche now has the fifth-most DeFi assets locked among blockchains, trailing Ethereum ($164.32 billion), Binance ($19.29 billion), Solana ($12.58 billion), and Terra ($9.89 billion).