Taking to X on November 22, one user, @kevinsekniqi, notes that the Avalanche C-Chain is burning roughly $12.65 of AVAX every second, a development that could be a massive boost for AVAX in the long term.

The surge in AVAX burning on the C-Chain is primarily due to the launch of inscriptions, which permit storing data on the Avalanche’s C-Chain, pushing the number of AVAX being taken out of circulation.

Avalanche Burning AVAX At Record Pace

@kevinsekniqi estimates that if the burn rate is maintained at spot rates, it could see approximately $400 million of the coin taken away from circulation. This could be a significant figure supporting AVAX bulls long-term since reducing supply at constant demand would naturally lead to price gains.

The heightened activity in recent days stems from the over 2.3 million daily transactions tied to users creating and transferring “ASC-20” tokens to inscribe data permanently onto Avalanche’s C-Chain. On average, the Avalanche C-Chain processes around 450,000 transactions daily. However, this figure has been changing in recent days, reading from on-chain data.

On-chain activity is up roughly 4X due to inscriptions, driving the network’s revenue as gauged by gas fees collected.

Through inscriptions, new use cases, as demonstrated in Bitcoin, around provable ownership and identity have emerged. Since Avalanche is a public ledger maintained by distributed validators operating nodes, gas fees must be paid. Part of the gas is burnt as part of Avalanche’s structure.

FTX Group Selling AVAX, Bulls Dominant

It is not immediately clear how the spike in the number of inscriptions on the C-Chain will impact prices. Though more inscriptions could support bulls, other external market factors should be considered. 

According to Scopescan data, FTX Group, a team tasked with managing FTX estate, recently sent 916,780 AVAX worth $20.7 million to Binance. Transfers to centralized exchanges are often interpreted as bearish. Following this, AVAX prices fell by 13% on November 21. 

Prices remain stable, and AVAX maintains an uptrend despite prices contracting this week. Looking at the developments in the daily chart, the coin roared 190% from October 2023 lows. It peaked at around $16 in November. 

At present, prices have cooled off, dropping by approximately 18%. Nonetheless, the uptrend remains. Any break above $16 could spur more activity, even lifting the coin towards August 2022 highs of around $30. 

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Filed under: Bitcoin - @ November 23, 2023 2:00 am