C-Chain Getting Hit By An Avalanche Of DeFi Users

Avalanche got hit with a surging demand following the ambitious announcement of DeFi Rush program, which in addition to committing $180M liquidity mining incentives, confirmed that Aave & Curve will be onboarding on Avalanche soon. The announcement coincided with the launch of Benqi; the first lending/borrowing money market on Avalanche and the first app to give start to DeFi Rush initiative with $3M liquidity mining allocation.

The key infrastructure piece of the DeFi Rush program was inarguably the new AB Bridge between Ethereum and Avalanche. While the new AB bridge operates under a PoA model just like the old bridge, the user experience is radically better. Transfers are 5x cheaper and 10x faster. This is because operators of the bridge use secret sharing to protect funds instead of smart contracts. As opposed to the old AEB bridge doing 4 smart contract calls, users only have to do one simple token transfer on the expensive Ethereum side to cross over to Avalanche dramatically saving on gas and time. Unsurprisingly, Avalanche benefited greatly from the smooth UX of the bridge welcoming up to $1.5B net inflow.

Roughly 1/3th of bridged liquidity was in the form of stablecoins while the tokens with the largest inflows were ETH, WBTC, and LINK. The inflow from Ethereum quickly filled pools of numerous DeFi applications directly contributing to TVL on Avalanche. The impact of bridged liquidity was amplified on DeFi money markets as the inflow also indirectly contributed to growth by appreciating native Avalanche tokens price.

More importantly, DeFi Rush announcement was particularly effective in sparking mid to long-term developer appetite. Contrary to Bridge & DeFi TVL which had a pullback in September after plateauing by end of August, the developer & user activity kept growing at a high