Penta Lab Research Report Top 30 Series - AVAX - 69% Market Cap Upside
High Performance Public Chain and Customizable Subnet Architecture Deliver Strong Ecological Growth.
Project name: Avalanche
Token: AVAX
Current market capitalization: $21 billion
Estimated Market Capitalization in 6 Months: $35.5 Billion
Upside: 69%
Penta 10 Dimension Rating: 82
Data as of: March 17, 2024
Avalanche uses an original consensus mechanism and three parallel chains to create the fastest TTF on the public chain. avalanche uses an original consensus mechanism that reaches consensus through rapid repetitive sampling, which does not require all nodes to agree, but rather a consensus of more than half of the nodes as defined by the network. in addition, Avalanche employs a unique triple-parallel-chain architecture, where the core platform consists of three interoperable blockchains: the transaction chain (x-chain), the contract chain (c-chain), and the platform chain (p-chain), where the x-chain creates and transacts with the assets, the c-chain creates the smart contracts, and the p-chain coordinates with the verifiers and the sub-network. avalanche gives a different functionality to each of these chains, which greatly improves the speed and scalability as compared to concentrating all the processing in a single blockchain. this mechanism allows Avalanche to achieve a speed of 0.0%.
Avalanche's innovative multi-purpose subnets provide strong ecological development momentum. avalanche subnets can be regarded as EVM-compatible L1 or L0-like infrastructure, and are also a capacity expansion solution, which provides more possibilities for the expansion of Avalanche. avalanche's subnets do not require beacons or relay chain design, and assets can be moved freely between subnets, with good cross-chain compatibility, lower latency, higher TPS, and lower cost of processing transactions. at present, the subnets of avalanche's ecosystem have been ranked among the first in the expansion of DeFi, GameFi and RWA.
Durango Upgrade Introduces New Teleporter Feature as Subnet Ecosystem Interoperability Continues to Grow On March 6, 2024, the Avalanche team released an upgrade to Durango with a new feature called "Teleporter" built on Avalanche Warp Messaging (AWM), which supports EVM-compatible subnets, specifically C-chains, and addresses network fragmentation. it will allow for the sharing of a wide range of data types, including tokens, NFTs, and predicate feeds, and will further enhance interoperability of the Avalanche subnet ecosystem.
Valuation: By analyzing the top seven projects on Avalanche with a total value lock (TVL) greater than $30 million and assuming a growth rate of 24% to 60% over the next six months, we project a six-month TVL of $1.78 billion, an increase from the current growth rate of 42%.Avalanche's current outstanding market capitalization to TVL of 16x is 0.7 standard deviations above its historical average over the past three years of 7x.Taking into account the market's rising expectations for its GameFi and RWA sub-networked applications, we have taken the past three years' historical average and adjusted it upward by one standard deviation, 20x, and multiplied it by the projected six-month TVL of $1.78 billion to arrive at a six-month target market capitalization of $35.5 billion, which is a 69% upside.
Main risks: market competition risk, technology development is less than expected, sub-network ecological development is less than expected.
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