• Aave allows users to borrow, supply and earn interest on crypto assets, while Curve will enable the exchange of stablecoins
  • Avalanche VP of marketing says it will continue integrating additional blue-chip DeFi protocols on the platform as part of the program

Avalanche is set to introduce a $180 million liquidity mining incentive program that will add more applications and assets to its growing DeFi ecosystem.

Called Avalanche Rush, the program will bring DeFi protocols Aave and Curve to launch on the Avalanche public blockchain. It follows the launch of the Avalanche Bridge, which transfers assets between blockchains, and the firm said the combination of the two will incentivize new and established DeFi applications to join the Avalanche ecosystem.

Aave allows users to supply and borrow crypto assets and earn interest on those supplied to the protocol. Curve will enable the exchange of stablecoins with low fees and low slippage, covering a wide range of stablecoins and using pools to provide rewards.

The new initiative will provide Avalanche’s native token, AVAX, as liquidity mining incentives for Aave and Curve users over a three-month period. The initial allocations amount to $20 million AVAX and $7 million AVAX for Aave and Curve users, respectively, with additional allocations planned in the coming months.

The Avalanche mainnet launched in September 2020, and the firm has been focused since January on building out the blockchain’s ecosystem, said Jay Kurahashi-Sofue, vice president of marketing at Ava Labs, the company behind the Avalanche blockchain.

The company began seeing interest from applications that deployed on Avalanche natively or were looking to rollout on other blockchains in conjunction with Avalanche, he noted. For example, it launched a $3 million liquidity mining initiative with liquidity protocol BENQi.

“What we saw was a little bit of a slower runup with some of the leading protocols in the space mainly because our space is super hectic and I think everyone’s just heads down in their own strategic directions,” Kurahashi-Sofue told Blockworks. “…With the conversations we’ve been having the last three or four months, we’re seeing a lot of the emotions turn.”

The growth of DeFi … and competition

David Tawil, president of ProChain Capital, recently said that Ethereum is starting to get “real competition” from other DeFi-focused firms. Cardano, for example, which has grown to be the third-largest cryptocurrency by market capitalization, is planning a hard fork that will bring smart contracts to the platform.

Ava Labs President John Wu previously compared the future of the blockchain technology space to social media, where there are giants like Facebook co-existing with successful vertical specialists and alternatives.

“As DeFi becomes more and more popular, it becomes clear that Ethereum blockchain is currently struggling to fit all the activity. Thus, it is important to expand to other chains and L2s,” Curve Financial CEO Michael Egorov said in a statement. “We find Avalanche offering an excellent opportunity with its unique decentralized consensus mechanism, high throughput and low transaction fees.” 

Avalanche’s biggest strength is that it can settle a transaction in under a second Kurahashi-Sofue said, noting that it may take some competitors 15 minutes to an hour to settle a transaction. The company will continue highlighting that differentiator to remain competitive, he added. 

Stake DAO, which recently partnered with Avalanche for a staking collaboration, also plans to build innovative yield generating strategies leveraging the upcoming deployments of Aave and Curve on the platform. 

“Don’t believe what we’re saying,” Kurahashi-Sofue said. “See it for yourself and try an application on Avalanche and you’ll see it’s a stark, stark difference between any other chain that’s out there right now that has smart contracts.”

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  • Ben Strack is a Denver-based reporter covering macro and crypto-native funds, financial advisors, structured products, and the integration of digital assets and decentralized finance (DeFi) into traditional finance. Prior to joining Blockworks, he covered the asset management industry for Fund Intelligence and was a reporter and editor for various local newspapers on Long Island. He graduated from the University of Maryland with a degree in journalism. Contact Ben via email at [email protected]