Market Note: INJ Ecosystem Fund Boost Has Precedent

Introduction

The second half of the most recent bull market, colloquially named the “double bubble,” was dominated by the “L1 Wars” narrative. The initial spark was Avalanche’s announcement of “Avalanche Rush,” a $180M liquidity mining incentive program. The day of the Avalanche Rush announcement led to a 28% gain for the AVAX token, followed by a nearly sixfold surge in price over the subsequent three months.

This success didn’t go unnoticed, prompting other L1 platforms to launch similar programs in an attempt to replicate Avalanche’s success. Commonly referred to as development, ecosystem, or incentivization funds, these initiatives invariably led to token price appreciation, increases in total value locked (TVL), and a proliferation of decentralized applications (dApps) with growing user bases.