Issuers Pocket More Than the Network Earns A notable gap has emerged inside the Avalanche ecosystem. According to figures from the @AvalancheFDN, stablecoin issuers collected $6.9 million in
A notable gap has emerged inside the Avalanche ecosystem. According to figures from the @AvalancheFDN, stablecoin issuers collected $6.9 million in yield on the reserves backing Avalanche-resident tokens in June alone. Over the same month, Avalanche's on-chain economy produced just $3.1 million in nominal Gross Chain Product, the Foundation's own measure of on-chain value added, defined as on-chain profit plus transaction fees. Issuers are earning more from parked reserves than the network itself generates, and none of that income flows back to $AVAX.
The cumulative picture is starker. Lifetime issuer income on Avalanche has reached $242.8 million. That sits against $23.5 million in @avax C-Chain fees burned since 2024, itself a fraction of the $954.8 million in lifetime on-chain production the Foundation estimates. The burn is also highly concentrated: the two largest stablecoin issuers account for roughly 96% of total issuer income, at $173.2 million and $59.7 million respectively. On the fee side, Avalanche burns 100% of C-Chain transaction fees, both base and priority, which goes further than Ethereum's EIP-1559 design, which burns only the base fee and directs priority fees to validators. That structural advantage has not been enough to close the value-capture gap.
The issuer income stream is also more stable than the network's own output. Issuer revenue swings 2.1 times from peak to trough, against a 7.5 times swing for Avalanche's on-chain output. Reserve yield tracks broader interest rate conditions rather than the ebbs and flows of on-chain activity, which makes it inherently steadier regardless of network usage.
The Foundation has identified two protocol-level levers. ACP-67 proposes a protocol-owned stablecoin as a direct route to capturing reserve yield for the network rather than leaving it with external issuers. ACP-283 makes the C-Chain minimum gas price adjustable through validator voting, replacing the current static setting, allowing validators to respond to network conditions dynamically. The logic is that higher minimum fees mean more AVAX burned per unit of activity, improving the network's own value retention.
The Foundation's paper also points to Hyperliquid as a live example of what protocol-owned yield capture looks like in practice, and of its limits. Hyperliquid launched USDH, a native stablecoin designed to redirect reserve yield back into its own ecosystem. Under a subsequent arrangement with Coinbase, the exchange agreed to treat USDC on Hyperliquid as on-platform and pay around 90 percent of reserve income back to the protocol. Hyperliquid ultimately pushed incumbents into sharing economics directly instead of building a large standalone stablecoin ecosystem around USDH. The Foundation cites this as evidence that even a well-executed protocol stablecoin can be outcompeted by negotiating yield-sharing terms with an established issuer. It is a foundation publishing a data point that complicates the easy version of its own plan, and it is arguably the most honest part of the paper. Whether ACP-67, ACP-283, or a combination of both can meaningfully shift the value-capture balance for $AVAX holders remains an open question. All figures cited are Foundation estimates.
Sources:From Static Constants to Dynamic Variables: What Three ACPs Say About Avalanche's Economics (Avalanche)Avalanche Retro9000 Initiative's C-Chain Phase Goes Live (Yahoo Finance)Avalanche Transaction Fees (Avalanche Builder Hub)
