According to Avalon Labs, the burned tokens originated from unclaimed airdrop allocations and represented an estimated value of $16 million. By permanently removing these AVL tokens, the company has signaled a major pivot toward scarcity-driven value and ecosystem sustainability, a strategy often seen in established crypto projects seeking to incentivize long-term holding.

“This isn’t the end, it’s a new beginning. Today marks the launch of our next chapter: business expansion. Stay tuned—Avalon is moving forward,” reads the official statement from the project team, underlining ambitions to build on this pivotal moment.

Throughout 2024, over 100,000 Avalon community members—known as Avalonians—were granted AVL tokens via airdrops, with the total distributed value surpassing $20 million. Avalon Labs has underscored that these early users are now recognized as the core stakeholders of the platform, with their involvement playing a decisive role in defining its long-term value proposition.

The large-scale token burn has now ushered AVL into an official deflationary cycle. Avalon Labs argues that this supply reduction will help unlock new value and strengthen the project’s ecosystem. From a market perspective, deflationary models often improve tokenomics by aligning incentives between users and investors, which could result in more sustainable growth and higher demand for AVL in the long run.

At the time of writing, AVL was trading at nearly $0.21, according to CoinMarketCap, with daily trading volumes having doubled since the burn event—evidence of renewed attention from traders and speculators alike.

AVL token price and volume metricsAVL token price and volume metrics

Earlier this year, Avalon Labs indicated that it was evaluating a filing with the U.S. Securities and Exchange Commission for the industry’s first Bitcoin-backed debt ETF—a move that would position the project at the intersection of traditional finance and the crypto market. As institutional investors increasingly incorporate Bitcoin into their portfolios and financial products, Avalon Labs has started engaging legal partners to lay the groundwork for this next-generation financial instrument.

Additionally, in May, Avalon Labs secured new investment from YZi Labs, a venture capital firm specializing in blockchain innovation, although the exact funding amount remains undisclosed. The influx of capital further supports Avalon’s ongoing expansion strategy and signals institutional confidence in its deflationary roadmap.