Avalanche C-Chain Burning $12.65 Of AVAX Every Second, What Does It Mean For Price?
November 22 2023 - 8:00PM
NEWSBTC
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. Related Reading: Panic At Binance
Following CZ’s Departure? Analyzing 24-Hour Inflow and Outflow
Trends 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. Related Reading: Shibarium Transactions Spike
288%, But Why Is Shiba Inu Price Down Today? 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. Feature
image from Canva, chart from TradingView
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