Avalanche Turning to RWA Track: Collaborating with JPMorgan Chase, Ecosystem Tokens Collectively Rise

引言

US financial giant JPMorgan will collaborate with alternative asset management company Apollo Global to launch the Project Guardian.

The plan will use the LayerZero cross-chain protocol to connect JPMorgan’s Onyx blockchain platform with the Avalanche Evergreen subnet. After the announcement of this content, the price of AVAX, which has been consistently performing well recently, has increased by more than 20% in the past 24 hours.

All of this makes it difficult not to focus on Avalanche: what lies behind these opportunities and decisions?

Source: tradingview

Losing Brilliance: Excellent Underlying Logic, Silent Volume

The keywords for Avalanche are simple: high performance, low latency and scalability.

The hierarchical structure of Avalanche itself is conducive to improving transaction efficiency and reducing costs. Simply put, P-Chain is responsible for network consensus and management, C-Chain is the hosting platform for smart contracts, and X-Chain handles asset issuance and transactions.

This design is naturally the most conducive to Defi’s eco construction, but after forming this impression, Avalanche was once hindered.

Source: academy.avax.network

Avalanche once gave the eye-catching concept of “anyone can create and deploy their own blockchain network, making them seamlessly connected,” and they really want more individual creators to join and be active in the network, thereby promoting the prosperity of Dapps, community eco, and other aspects.

But this vision seems to have never been very smooth - according to data from April this year, Avalanche’s on chain eco is a bit “too quiet”, and application loss is more severe than other public chains, such as Polygon and Solana, with correspondingly low user activity; The TVL of crypto assets locked on the chain is less than $900 million, which is significantly reduced compared to the peak period in 2022.

In a sense, Avalanche is very eager for the innovation and retention of “content,” but its performance in this area is not satisfactory, and there is not a lot of community voice. Even in this year’s upgrade, there was no huge discussion trend like Solana when there were two C-chain outages.

In response to these, the Avalanche Foundation launched the NFT program, collaborating with esports platforms such as TSM, in an attempt to awaken an active eco. The founder of Ava Labs, Emin, once lamented that “too many L1’s are plagiarizing others’ s and bringing things that the market does not need.” Amidst the endless emergence of new narratives and discussions brought about by L2 solutions and various proofs, Avalanche, which relies on high performance, scalability, and cross chain characteristics, is indeed somewhat lonely.

Source: unsplash

Imagine if each L1 has a personified image, Avalanche may seem like a smart and thoughtful academic bully, but due to his quietness, he rarely expresses his opinions, so he doesn’t collect much feedback from others when he needs attention.

Although Avalanche may seem a bit at a disadvantage in the coin circle, where there is a strong pursuit of short-term profit opportunities brought by concepts and community emotions, on the other hand, after time testing, Avalanche has its own unique reserves and pace, so we are pleased to find that the home court belonging to Avalanche seems to have arrived.

Avalanche and JP Morgan: Unique Development Pace, Witness Adaptability from Defi to RWA

Firstly, let’s clarify the fact that Avalanche’s alliance with JPMorgan Chase was not a sudden collision, but rather an early deployment.

JPMorgan Chase launched its blockchain plan in 2015 and released Quorum on Ethereum, where tokenization has always been an important task for the company. Onyx Digital Assets is a platform for the bank to settle payments in tokenized fiat currency JPM, which was launched a few years ago and has processed over $900 billion in transactions.

Although this transaction volume is insignificant for JPMorgan Chase, it also reflects the institution’s ongoing research on blockchain applications. The subnet connection project between JPMorgan Chase and Avalanche was announced in January. Considering that JPMorgan Chase wants to address issues such as freedom, security, payment efficiency, and cross chain stability, Avalanche is indeed the best choice.

Source: unsplash

Here, Avalanche seems to have gradually unlocked and amplified its advantageous scenario - the RWA field; High performance, low cost, and high security are no longer just adjectives, but rather traditional financial institutions that want to apply blockchain.

Strike while the iron is hot, continuously carrying out technological iteration and eco empowerment. Since the beginning of this year, Avalanche has been vigorously promoting technological and eco development. In terms of technology, including launching Cortina upgrades to provide developers with a better experience, proposing Astra upgrades to enhance the subnet architecture on Avalanche, and subsequently introducing “pay as you go” fees in AVAX, redesigning Cortina 14 for validator set management, etc. In terms of eco construction, Avalanche has launched multiple support plans and tools and collaborated with traditional enterprises.

The news of the entry of giant financial institutions, combined with technological updates and gradual improvement of eco construction, has enabled AVAX to once again become a potential star currency; The continuous expansion of user base will further benefit the prosperous eco expected by Avalanche.

Although it’s just speculation - after two team optimizations this year, Avalanche seems to have found a new way to break through the bottleneck, triggering discussions through one or two Waves of targeted “doing things” and releasing techniques such as technological updates, eco construction, and community summoning in a chain.

Source: X @avax

Expanding Vision: Traditional Financial Giants Watching Blockchain

Recently, there are also Citigroup and T Rowe Price et al. Like JPMorgan Chase, Citigroup is not a newcomer to the digital asset field. As early as 2015, Citigroup began blockchain related work through its Innovation Lab.

This year, Citigroup hired Ryan Rugg, a senior enterprise blockchain expert who was previously a senior utive at IBM and R3, a blockchain expert in the banking industry, to lead the bank’s newly established token services department. The bank’s tokenization pilot is based on Permissioned blockchain.

For traditional banking and financial industries, their use of blockchain is mainly limited to licensed networks and is attracted by the notion of cost savings. They will study and study the tokenization roadmap, digitizing everything from money market funds (MMFs) to large but illiquid private markets and the real estate sector.

Source: unsplash

Ultimately, the largest market for bank RWAs will be public blockchain, which requires diversified collateral. Chainlink’s co founder, Sergey Nazarov, envisions, “I think public chains are willing to pay the maximum premium for diversified collateral. The world yield of public chains is very attractive to banks, as they can benefit greatly from bank tokenization and investment in the assets of their protocols, making these protocols more flexible and reliable.”

Considering that the recent consecutive high volatility of BTC also started with the “rumor” of Bitcoin ETFs passing, it may still be worth lamenting that Defi and traditional finance are indeed not in opposition, and may eventually merge.

Presently, Avalanche has gained insight into this and found a balance between its pace and the market.