Avalanche DeFi TVL Surges 40% Q2 2025 Driven by Octane Upgrade

Avalanche (AVAX) has experienced a notable surge in its decentralized finance (DeFi) ecosystem, with total value locked (TVL) rising nearly 40% in the second quarter of 2025 following the implementation of the Octane upgrade. According to data from Messari, TVL on Avalanche’s DeFi platforms climbed from $1.1 billion to $1.5 billion during the period, marking a significant rebound despite a broader market downturn [1]. The upgrade, which introduced a dynamic fee mechanism to the C-Chain, reduced average transaction fees by 42.7% and enhanced scalability, directly contributing to the growth [1].

The impact of the Octane upgrade extended beyond TVL, driving substantial increases in network activity. Daily transactions on Avalanche’s C-Chain surged by 493.4%, reaching 1.4 million by the end of Q2 2025, while daily active addresses increased by 57% quarter-over-quarter, hitting 46,397 [1]. Notably, the network recorded a peak of 419,619 daily active addresses on May 11, reflecting heightened user engagement. These metrics underscore the platform’s appeal as a scalable alternative to Ethereum, particularly for developers and users prioritizing cost efficiency [1].

Avalanche’s broader transaction volume also saw a dramatic boost, with average daily transactions across all layer-1 platforms rising 169.91% to 10.1 million in Q2 2025. This growth was accompanied by a 210.45% increase in daily active addresses to 519,954, a critical indicator of sustained network adoption [1]. The reduction in transaction fees, which fell from $0.05 to $0.03, further incentivized usage, aligning with the upgrade’s goal of improving user experience [1].

While the DeFi TVL growth was a standout, other metrics revealed mixed outcomes. AVAX’s price declined 4.2% quarter-over-quarter, falling from $18.77 to $17.99, and its market cap dropped 2.6% to $7.6 billion, pushing its ranking down to 16th among cryptocurrencies [1]. However, the token’s recent performance has shown signs of recovery, with a 35% rise in the past 30 days as Bitcoin (BTC) reached a record high above $123,000. This resurgence aligns with broader market optimism and Avalanche’s efforts to attract institutional adoption through customizable subnets, which launched 15 new blockchain environments in Q2 2024, including partnerships with major gaming studios [1].

The surge in TVL coincided with a dramatic spike in decentralized exchange (DEX) volume, which reached $675.4 million on July 16—a 8-fold increase compared to $77.72 million in June [1]. This growth, however, remains below the November–December 2023 peak, indicating that Avalanche’s ecosystem is still navigating market volatility. The platform’s infrastructure upgrades, including a 40% gas fee reduction and integration with Ethereum-based tools, have solidified its position as a competitive layer-1 blockchain, though challenges such as regulatory scrutiny of blockchain gaming models persist [1].

Source: [1] [Avalanche Q2 2024 Data Reveals What’s Driving Explosive Growth] [https://coinmarketcap.com/community/articles/68850be46abea75f449183f6/]