Avalanche Gains Institutional and Government Momentum Despite Token Slump

Avalanche is emerging as a key blockchain choice for governments and institutional investors, even as its native token, AVAX, continues to trade far below its peak. In a notable milestone, Wyoming’s Stable Token Commission launched the Frontier Stable Token (FRNT) on Avalanche and six other public blockchains, marking the first government-backed stablecoin issued on-chain.

FRNT is fully collateralized with U.S. dollars and short-term Treasury bills, maintaining a mandated 102% reserve ratio, according to Cointelegraph. The move underscores a broader shift toward public blockchain adoption by government entities seeking transparent, compliant financial infrastructure.

Traditional Finance Joins the Avalanche Ecosystem

Institutional participation is also accelerating. SkyBridge Capital, led by Anthony Scaramucci, announced plans to tokenize $300 million in hedge fund capital on the Avalanche network. Analytics firm Nansen described this transition as “quietly turning TradFi and gov tech into onchain reality,” emphasizing that decentralized finance (DeFi) is entering an institutional phase.

Rising Role in Tokenized Treasuries

By the end of the third quarter, Avalanche ranked as the third-largest blockchain by the value of tokenized U.S. Treasuries, holding approximately $638 million on-chain, behind BNB Chain and Ethereum, according to RWA.xyz. Tokenized Treasuries represent a growing segment of real-world asset tokenization, offering investors improved access and liquidity in traditionally illiquid markets.

Strong Network Growth, Weak Token Performance

Despite impressive network activity, Avalanche’s market performance tells a different story. The blockchain recorded over 1 million daily transactions on average last quarter, peaking at 51.6 million in a single day, Nansen data shows. Yet, the AVAX token has not mirrored this growth, currently trading around $19.66, down 86% from its all-time high of $146 set in November 2021.

The broader crypto downturn, intensified by a record $19 billion liquidation event earlier this month and renewed trade tensions triggered by President Donald Trump’s proposed 100% import tariffs on Chinese goods, has weighed heavily on market sentiment.