Avalanche reveals intention to double down on subnets, but what about AVAX?

• A peek into Avalanche’s plan to leverage growth through subnets.
• AVAX encounters resistance but sell pressure remains low.

Since the start of 2023, we have seen an increased focus on development that is aimed at network expansion. This has been the case among top blockchain networks including Avalanche.

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But how exactly is Avalanche pursuing growth while maintaining a consistently healthy network performance? A recent meeting revealed that the network is focusing heavily on creating subnets as an avenue for horizontal scaling.

This is an important strategy because it allows the network to grow without facing challenges such as network congestion.

In this video from one of our fall research seminars, @_patrickogrady gives an in-depth overview of Avalanche Subnets, the Avalanche Network’s technique for horizontally scaling its throughput with connected, sovereign subnetworks: https://t.co/JpiOcoKKnE

— a16z crypto (@a16zcrypto) February 3, 2023

One of the developers revealed during the meeting that the subnets run parallel to the mainnet. That way, a validator has to approve subnet transactions when they approve on the mainnet or primary network.

This approach is because Avalanche operates subnets as virtual machines and is reportedly used to maintain cohesiveness within the ecosystem.

Pushing adoption into the fast lane

Avalanche has been onboarding projects on its network through subnets. The latest such announcement happened as recently as this week, ushering in a new decentralized exchange called Dexalot.

Dexalot launched their Subnet this week, an innovative approach to a central limit order book built with a dual-chain architecture.@dexalotcom joins #AvalancheSpaces this Monday at 12p ET to break it all down!

Don’t miss this one, set a reminder here: https://t.co/1q60SFZMHl pic.twitter.com/45wqheIKwQ

— Avalanche 🔺 (@avalancheavax) February 3, 2023

Avalanche also announced that it launched a new type of subnet called elastic subnets. The latter will reportedly feature proof of stake validation which will allow token holders to stake and act as validators.

This option is ideal for projects that want to delegate the tasks of network validation. This approach may encourage more network adoption.

Avalanche’s focus on growth is backed by healthy development activity which has been on an overall upward trajectory since the start of 2023.

Source: Santiment

The network has also demonstrated improvements in other areas. For example. Its on-chain volume has notably improved since the second week of January. It registered a large spike in the last two days but the volume dropped significantly in the last 24 hours.

Source: Santiment

How many are 1,10,100 AVAXs worth today?

The most recent volume spike occurred at a critical price level where the price has been experiencing resistance. Prior to that, the bulls maintained control, leading to a sizable rally since the start of the month.

It explains why AVAX price is now experiencing some resistance within a previously tested resistance range which may act as a psychological sell zone.

Source: TradingView

AVAX has not experienced many downsides despite facing resistance. This might be due to a lack of enough selling pressure.