Avalanche (AVAX) is currently in a downtrend, which has not broken since last month. The latest market data shows that the token has depreciated 12% since last weeka huge loss for investors and traders interested in the token.
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Despite this, the platform maintains its momentum. A new proposed update could improve the developer and user experience on the platform, further integrating new users and developers into using Avalanche.
The essence of the ACP-77
ACP-77 is the newly announced main proposal made by the Avalanche Foundation to simplify the system for developers, increasing the flexibility of launching subnets on the chain.
Avalanche Subnets act like layer-1 blockchains, with subnets using the mainnet as a bridge between subnet and subnet.
According to the proposal, the current on-chain subnet launch system limits developers. With a minimum stake of 2,000 AVAX required for subnet validators, the financial barrier filters out developers with little to no funding, stifling innovation. Thus, ACP-77 proposes to remove the financial barrier along with the required mainnet validation for subnet validators.
This means that developers won’t be burdened with a huge upfront financial commitment coupled with the technically difficult task of validating the mainnet. This means more time on the drawing board, effectively incentivizing developers to have a more finished product by the launch of their subnet.
It will also help improve the decentralization of the platform. Once the proposal is approved, subnets will have more autonomy in terms of certain configurations they would like to implement.
In exchange for removing validation from the mainnet, subnet validators will validate the P-chain (platform chain). This will facilitate resource utilization, making resource allocation more efficient.
The proposal will have an overall positive impact on the platform. Reducing costs and resource requirements for developers will help bring new developers to build on Avalanche, improving the platform for users.
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AVAX Downtrend
Although the token has fallen since the beginning of the year, AVAX the bulls seemed to have found the perfect support for a possible advance.
The bulls appeared to have stabilized around the $26 to $29 range. This support and ceiling present strong points for both bulls and bears. However, the bulls have a big advantage in this position.
While the market has corrected to a more sustainable level, major cryptocurrencies like Bitcoin and Ethereum are poised to explode, pulling the market along with them. AVAX, with its high correlation to Ethereum, will follow the general market trend once the bearish trend stabilizes.
However, macroeconomic factors will affect the major tokens, which will either help or stifle the value growth in the market. AVAX bulls should then wait and further consolidate their current position. Once the opportunity presents itself, the token has the potential to reach $34 in the medium to long term.
Featured image from Pexels, chart from TradingView