The amount of funds flowing through the Avalanche Bridge is down 70% in the last 24 hours, DeFiLlama data on May 31 shows.
70% Drop In Activity In The Avalanche Bridge To Ethereum
Over the past day, the bridge has facilitated $2,634,828 worth of transactions and processed $22.4 million in transfers in the last week.
The bridge has processed 278 transactions in the past day, totaling around $2.6 million. It shows a sharp decrease in activity between Ethereum and Avalanche, among the world’s largest smart contract platforms.
The Avalanche Bridge connects the Avalanche’s C-Chain, one of the three interoperable blockchains defining the low-finality platform, with Ethereum.
Since C-Chain is compatible with the Ethereum Virtual Machine (EVM), assets can be smoothly transferred from Avalanche to Ethereum and vice versa.
The compatibility with the EVM coupled with the decentralization of the bridge means users can move funds between the two blockchains securely.
Avalanche, unlike Ethereum, is explicitly designed for decentralized finance (DeFi) dApps. It boasts high processing speeds, relatively low fees, and is decentralized. However, it lags Ethereum in activity, judging from the total value locked (TVL).
According to DeFiLlama data, over $26.5 billion of the approximately $48 billion of all DeFi TVL is managed by dapps on Ethereum.
More Assets Moved Between Avalanche And Bitcoin
Notably, while there is a worrying contraction in the number of transactions and value between Avalanche and Ethereum, the Avalanche Core Bitcoin Bridge is booming.
On May 31, there was a significant increase in transfers and value, with a spike of 2,726%. Within 24 hours, assets worth over $6.5 million were transferred through the bridge. This is roughly half the average weekly transfers which stand at $13.81.
Bitcoin transferred to the Avalanche C-Chain from the Bitcoin network is tokenized and is compliant with the ERC-20 standard. In that case, it can be moved to Ethereum and used to participate in DeFi.
Scanning the activities stemming from Avalanche to Bitcoin and Ethereum, the disparity could suggest that more users are moving their assets to and from Bitcoin.
However, no direct fundamental event could explain why more users are bridging tokens from Bitcoin and cutting down engagement with Ethereum.
In the last 24 hours, Bitcoin, Ethereum, and Avalanche prices have been under pressure, falling from recent highs. To illustrate, AVAX is down 6% from May 28 highs, extending losses from mid-April. AVAX is down 35% in the last six weeks and retesting March 2023 lows.
AVAX may slip below a critical multi-week support level if sellers double down. In that case, it could drop to December 2022 lows at around $10.
Feature Image From Canva, Chart From TradingView