Avalanche Unveils Firewood Update, but AVAX Investors Express Concerns

The Avalanche Network is gearing up for a major upgrade known as “Firewood.” This upgrade aims to enhance the storage of the blockchain, making it more efficient. The creators of Avalanche, Ava Labs, have announced that Firewood is currently in development and not yet ready to be deployed.

However, Avalanche Network has already incorporated a preview of Firewood for developers on its network. Ava Labs explained that this future upgrade will address one of the biggest challenges in blockchain technology: scalability.

The system’s goal is to organize information efficiently while allowing for effective management to aid in scalability. Projects like Bitcoin and Ethereum utilize a tree-like data structure (Merkle storage) in their blockchains. Therefore, Firewood is specifically designed to handle the reading of the Merkle blockchain state under heavy loads.

Ava Labs stated that it will evaluate Firewood’s performance compared to other blockchain databases in the coming months.


Despite the optimistic development of the Firewood upgrade for the Avalanche ecosystem, on-chain metrics reveal a less optimistic trend that may pose challenges for the price of AVAX, the native token of Avalanche.

According to Token Terminal statistics, the number of addresses actively interacting with the Avalanche network has decreased in recent weeks, indicating a capital outflow. The average number of active users in the past 30 days has dropped by nearly 33%.

In addition, revenue generated in the past 30 days has also suffered from reduced activity. The revenue generated by AVAX through fees and other sources during this period has fallen by 45%. The network’s annualized fees amount to $3.65 million, a decrease of over 47%.

“With key network metrics declining, the price of AVAX is at risk of experiencing further decline and losing support,” said analyst Shraddha Sharma. She also pointed out that while Firewood may bring significant improvements to the Avalanche technology, investors are showing caution due to recent data indicating a decrease in activity and revenue.

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