Avalanche (AVAX), the native token on the eponymous blockchain, rallied on a report that Ava Labs is raising more capital. The planned capital raise could see Ava, the blockchain’s lead developer, become one of the most valuable crypto startups.
AVAX jumped nearly 7% in the last 12 hours, and was trading at $81.58. The latest rally saw the token erase a bulk of its losses in the past three days, where a broader crypto rout had pressured prices.
Avalanche is a popular smart contracts blockchain, dubbed by many as an “Ethereum Killer” due to its claim of fixing several shortcomings in the larger network.
Ava Labs to raise $350 million
Bloomberg reported that Ava Labs is raising $350 million in new funding, which will value the firm at $5.25 billion. The new funding comes as AVAX attempts to compete with other smart contract chains such as Ethereum and Solana.
The chain, which was launched in September 2020, saw a rapid rise in popularity. AVAX is now the 10th largest token by market capitalization, at $21.8 billion.
It was not immediately clear what the medium for the capital raise was. But Avalanche has courted investments from several major crypto investors, including Polychain Capital, Three Arrows and Andreessen Horowitz.
In September, the Avalanche Foundation raised $230 million from a private sale of AVAX tokens.
Avalanche attracts DeFi interest
Recently, Terra community the Luna Foundation Guard (LFG) added about $100 million in AVAX to its UST reserves. While AVAX already has its own DeFi protocols, interest from a much bigger player like Terra is a bullish sign for the token.
The LFG buy had boosted AVAX prices.
Currently, Trader Joe is Avalanche’s largest DeFi exchange. The protocol holds about $1.35 billion in total value locked, and is the 26th largest protocol, according to DeFi Llama.
But finance isn’t the only draw of Avalanche. The blockchain supports ETH-based applications, and also allows for game development- two features that have been credited with the blockchain’s sharp rise in popularity.
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