Avalanche Adds Native Euro Stablecoin, AvaCloud

As the app-chain thesis continues to gain mind share, developers on layer-1 Avalanche have put their own spin on the concept with the launch of AvaCloud this week.

Coincidentally, Circle, the issuer of the second-largest stablecoin USDC, announced that its euro-backed token EUROC is now natively available on the Avalanche C-chain — marking its first foray into multichain expansion. 

AvaCloud is billed as a “launchpad for deploying and scaling no-code, fully managed custom blockchains” — what Avalanche calls Subnets. These are analogous to Cosmos’ consumer chains, which are connected to the Cosmos Hub using replicated security.

The product suite comprises an interoperable blockchain builder with managed validators and analytics tools. It is aimed at businesses that want to launch blockchains quickly with minimal overhead costs.

Avalanche touts the in-development game Shrapnel and Korean marketing platform SK Planet among its early adopters.

Aave co-founder Stani Kulechov called it “an interesting way to deploy a customized app-specific network.” Avalanche is Aave’s third-largest market by total value locked, behind Polygon’s PoS chain and Ethereum, according to DeFi Llama.

Beyond making it easier to deploy interoperable blockchains, there are other parallels with the Cosmos app-chain ecosystem. In a Twitter space with Circle, Luigi D’Onorio DeMeo, head of DeFi and developer relations at Ava Labs, highlighted the “imminently launching” Avalanche Warp Messaging (AWM). This is a communication protocol for Avalanche broadly analogous to Cosmos’ Inter-Blockchain Communication (IBC). 

“That allows for somebody to take native USDC on the C-chain and move it to, for example, their payment subnet that has USDC as the gas token, and allows people to move USDC cheap and fast across the network,” DeMeo said.

Like IBC, the solution will not rely on a third-party bridge, which makes it both more secure and more scalable.

The Avalanche C-chain is its EVM-compatible subnet which carries the vast majority of all activity, network stats show.

Circle has issued USDC on Avalanche since late 2021. It is also natively issued on 7 other blockchains: Ethereum, Solana, TRON, Algorand, Stellar, Flow, and Hedera. Circle recently announced Cosmos’ as its next destination for native USDC issuance.

Previously the stablecoin had to be bridge over from Ethereum, and there remain almost $125 million USDC.e — the bridged variety on Avalanche — compared to $420 million in native USDC.

AvaCloud coupled with the launch of Circle’s euro-backed stablecoin could facilitate applications in forex trading, DeMeo said, as well as dapp development targeting the European market. The regulatory environment in Europe is generally perceived as more favorable compared to the United States.

Avalanche advocates point to the notable uptick in active addresses, which jumped by about 20,000 or 25% this week alone.

That’s not necessarily the same as “active users,” however, according to Blockworks Research analyst Dan Smith — despite Avalanche’s marketing claims on social media.

3-month trend of active addresses; Source: subnets.avax.network/stats/

Smith points out that the cheaper a chain is to transact upon, the more manipulable the address count statistic is. Transactions on the C-chain typically cost less than 10 cents. Transaction volume overall has been flat over the same 3-month period, data shows.

Ava Labs calls the introduction of EUROC “a pivotal moment for Avalanche.”

“DeFi continues to expand into a multi-currency, cross-border environment — delivering a trusted and fully reserved euro stablecoin like Euro Coin will greatly accelerate the adoption of instant payments and remittances to a much larger swath of the world,” said John Nahas, business development vice president at Ava Labs, in a statement on Thursday.

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