Avalanche Stealthily Transforms into RWA Public Chain

Those who recognize the times are the true heroes.

Written by: Eric, Foresight News

In many people's impressions, Avalanche is still a public chain focused on gaming. While it cannot be said that it has abandoned gaming, it is clear that the currently popular RWA tokenization and payments have become Avalanche's hallmark.

According to data from RWA.xyz, the total value of tokenized RWA assets on the Avalanche network has reached $2.1 billion, ranking just behind Ethereum, BNB Chain, Solana, and Stellar.

However, this ranking only accounts for the data of these chains as "distribution networks," meaning the situation where tokenized RWA assets are directly issued on the mainnet of these chains. If we consider the chains merely as "settlement networks," Avalanche's ranking rises to third place.

Thanks to its unique subnet mechanism, Avalanche has become the preferred choice for many traditional financial institutions. This all began with an upgrade at the end of 2024.

In December 2024, the Avalanche9000 upgrade was officially activated on the Avalanche mainnet. The core changes of this upgrade mainly include:

• Reconstructing subnets into independent Avalanche L1s;
• Canceling the staking requirement of 2000 AVAX for L1 validators, replacing it with a monthly subscription fee of approximately 1.33 AVAX;
• Reducing the minimum base Gas fee on the C-Chain from 25 nAVAX to 1 nAVAX (a reduction of about 96%).

In the past, to establish an Avalanche subnet, each validator needed to stake 2000 AVAX. If there were 20 validators in the subnet, a total of 40,000 AVAX would need to be staked. After switching to a monthly subscription fee model of 1.33 AVAX, the same 20 validators would only need to pay 26.6 AVAX per month, requiring continuous payments for over 125 years to reach the 40,000 AVAX level.

As a result, the cost and autonomy of building a dedicated chain based on the Avalanche stack have greatly increased. Previously, in addition to staking 2000 AVAX, subnet validators also needed to participate in the consensus of the mainnet's X-Chain, P-Chain, and C-Chain, forcing synchronization between the mainnet and the subnet's state; after the update, L1 validators only need to synchronize the latest P-Chain state, aiming to track their validator weight (used for consensus) and validate ICM (Interchain Messaging) messages.

Of course, the drawbacks of this approach are also evident: Avalanche L1 needs to be responsible for its own security, with the mainnet becoming a coordination layer without providing security support, similar to the relationship between Ethereum and sidechains. However, this trade-off facilitates the explosion of RWA tokenization and payments.

One year after the completion of the Avalanche9000 upgrade, Avalanche completed the Granite upgrade, introducing dynamic block times, biometric logins, and cheaper cross-chain messaging, achieving sub-second finality.

With the completion of infrastructure upgrades, Avalanche began a rapid integration with traditional finance.

In November 2025, Securitize received authorization from the EU DLT pilot mechanism, enabling it to issue, trade, and settle tokenized securities at the market infrastructure level, and connect with its broker-dealers, digital transfer agents, and alternative trading systems in the U.S. For this system deployment, Securitize chose Avalanche.

Securitize, which recently listed on the NYSE, chose Avalanche back in 2020. On the day of its listing, Securitize launched a tokenized version of its own stock on both Avalanche and Solana. In addition, tokenized assets based on Securitize, such as the BlackRock BUIDL fund, ParaFi's tokenized venture fund, and Apollo ACRED fund, make up the main sources of the $2.1 billion tokenized RWA assets on the Avalanche mainnet.

Besides Securitize, Galaxy also issued a total of $75 million in tokenized collateralized loan obligations (CLO) called "Galaxy CLO 2025-1" on Avalanche in early 2026. FinChain, a Web3 brand under Fosun Wealth, also launched a yield-bearing RWA stablecoin FUSD on Avalanche at the beginning of the year.

From the perspective of Gas fees, Solana can almost be said to be unrivaled, but many institutions choose Avalanche because it is arguably the most cost-effective option in the EVM-compatible chain space.

How to understand "cost-effectiveness"? Base, Arbitrum, and OP Mainnet are also native EVM environments, with costs comparable to Avalanche, and even have certain advantages. However, the final confirmation of these L2 transactions requires waiting for L1 block production, making Avalanche's advantage in transaction "finality" as an L1 obvious; compared to Ethereum and BNB Chain, Avalanche also has cost advantages.

This advantage in "finality" settlement speed has also allowed Polygon and ZKsync to seize the initiative. Polygon, as a sidechain, is more independent, while ZKsync's ZKP can almost guarantee "finality" before L1 confirmation. By the end of 2025, ZKsync and Polygon ranked second only to Ethereum in the total amount of tokenized RWA assets, surpassing Avalanche.

Having discussed the advantages of the mainnet, let's move on to the Avalanche subnets, which are the updated Avalanche L1.

Avalanche L1 provides partners with a complete development stack and high freedom, allowing participants to establish personalized L1s at a low cost to meet different needs. In April this year, South Korean payment service provider NHN KCP signed a memorandum of understanding with Ava Labs to jointly build an L1 network for payment scenarios based on Ava Cloud.

In July, NEC and Japan's largest security token platform Progmat also turned to Avalanche. NEC hopes to explore on-chain services that combine NEC's biometric digital identity technology with Avalanche's multi-chain architecture, with the core feature being that biometric data does not go on-chain, only the proof of successful verification is submitted on-chain, mainly serving in-store stablecoin payments for foreign tourists visiting Japan; Progmat is transitioning from a Corda 5-based consortium chain to a dedicated Avalanche L1, involving active tokenized assets exceeding 452 billion yen (approximately $2.7 billion).

On June 18, the Avalanche Payments Collective was officially launched, with 28 institutions including Franklin Templeton, VanEck, WisdomTree, Paxos, and Kraken joining, aiming to establish an ecosystem covering settlement, stablecoins, funding infrastructure, foreign exchange, asset management, compliance, and global payments.

Less than a month after the organization was established, Hyundai Motor America (HMA) and Hyundai Motor Mexico (HMM) completed the first enterprise-level cross-border settlement proof of concept (POC) on the Avalanche network through the Axiym platform. In this test, HMA converted $20,000 into USDT and transferred it to HMM, which then converted it back to dollars. The entire cross-border transfer and verification process took an average of 7 minutes, while traditional interbank transfers usually take over 3 to 4 hours.

Looking back now, Avalanche has built a system of "mainnet + Avalanche L1" that can almost cover all aspects of demand from tokenized RWA to payments. Correspondingly, Aave has also chosen Avalanche as the first stop for its Aave V4 multi-chain deployment, pointing to the potential of combining traditional finance with DeFi.

In this wave of enthusiasm, Avalanche's speed of transformation and adaptation has been remarkably fast, carving out a path without the heat of Solana and the resources of BNB Chain. However, the price of AVAX has returned to the levels seen at the end of 2020 and the beginning of 2021, which does not quite match the actual progress.

Avalanche's token economic model has not seen significant adjustments recently, nor has it introduced measures such as buybacks and burns to stimulate token prices. Avalanche L1 is a relatively independent chain that does not require AVAX as Gas fees; the activity level of Avalanche C-Chain has not qualitatively changed either, with fees burned based on EIP-1559 only reducing nearly 5.1 million AVAX, less than 1% of the total supply of 720 million.

But as mentioned earlier, for such an execution-oriented team, this may just be a temporary trade-off. Reducing the economic burden on partners and providing more autonomy to increase Avalanche's activity is currently a more important direction. Rushing to introduce buybacks and burns may reduce the protocol team's financial flexibility, forcing the foundation or Ava Labs to sell large amounts of tokens to maintain operations, which would be detrimental to the long-term development of the protocol.

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