According to Woofun AI, the NYSE officially confirmed that it will use Avalanche technology to build its exclusive settlement layer for tokenized securities. This decision triggered sharp market fluctuations on November 9. The platform aims to provide a 7×24 hour uninterrupted trading service. After the news was announced, the AVAX price rose rapidly, reaching a high of 9.01 USDT, reaching a maximum of 8.627 USDT as of the press release, up about 8.7% from the previous day's closing. This marks a critical step for traditional financial giants in selecting blockchain infrastructure, but it also reveals the structural lack of value capture in institutional applications of public chain tokens.
At the level of technical architecture and distribution ecosystem, the NYSE is not directly deployed on the Avalanche public chain, but has built a highly customized blockchain based on its technology stack. According to Woofun AI, the platform follows the NYSE's existing Pillar engine for matching. After the transaction is completed, the platform's clearing company completes instant settlement on the Avalanche ledger, and investors can use stablecoins to deposit funds. John Nahas, chief commercial officer at Ava Labs, notes that this model satisfies the stringent requirements of regulation to control participants.
As early as November 2, the NYSE announced the issuer arrangement. In addition to Securitize (SECZ.US) and tZERO, Broadridge (BR.US), Computershare, Equiniti, and Superstate were added as transfer agents, bringing the total number of partners to 6. Dennis Lee, head of digital distribution at the NYSE, emphasized that although stock issuance is scattered across multiple institutions and multiple chains, settlement must be consolidated into a fast, reliable, and predictable ledger. Avalanche won with its large developer community and flexible technical characteristics.
Looking back at the timeline, the NYSE announced the development of the platform on January 19, and its parent company Intercontinental Exchange (ICE.US) signed a memorandum of understanding with tZERO on August 31. At the Avalanche Summit in September, Ava Labs President Charley Cooper revealed that the NYSE had been testing Avalanche for about a year, but there was no official announcement at the time. It wasn't until the November 9 NYSE Live show that Cooper confirmed this was a deployment for production environments.
Compliance access is a core consideration. NYSE Chief Product Officer Kevin Tyrrell said that the C-Chain of Avalanche's main network did not meet the requirements due to public access characteristics, so they chose the self-built L1 (formerly known as Subnet) model introduced after the Etna upgrade (ACP-77). Under this model, validators do not need to pledge 2,000 AVAX and only pay a fixed monthly fee, which not only enables licensing but also ensures cost transparency. Ava Labs CEO Emin Gün Sirer added that dedicated infrastructure can still connect to the broader liquidity ecosystem through native cross-chain messaging.
As of November 9, the distributed RWA scale on Avalanche was $1.43 billion, the registered RWA scale was $11.4 billion, and the stablecoin market capitalization was $795 million, showing its deep accumulation in the field of institutional assets on-chain.
However, AVAX's value capture dilemma came to the fore. Neither the Foundation's announcement nor the NYSE statement mentioned the specific use of AVAX in settlement fees or pledges. According to Avalanche documentation, when there are fewer than 10,000 L1 validators, each validator pays about 1.33 AVAX per month as an ongoing fee and is destroyed, but this portion of revenue is completely decoupled from the number and amount of settlement transactions, and L1 internal fees can be denominated in the operator's own tokens. As early as July 30, when announcing the economic research agenda, the Avalanche Foundation acknowledged that the value created by ecology will not automatically flow to AVAX, which guarantees cybersecurity. Chief Investment Officer Matias Antonio defined this as the core problem being solved.
According to estimates released by the Foundation on August 12, the main source of value captured for AVAX since the beginning of 2024 has been the destruction of C-Chain fees, which accumulated about US$23.5 million (not including L1 validator fees), and the L1 revenue sharing mechanism is still being studied. Taking the June data as an example, the nominal GCP created on the Avalanche chain was $3.1 million, the revenue from assets such as tokenized funds brought to holders was $2.7 million, and the issuer earned $6.9 million from reserve assets. The Foundation made it clear that the latter two large proceeds are currently largely uncontributing to AVAX's value capture.
Areas of improvement include ACP-283, where validators vote to adjust gas prices, ACP-67, the protocol's own stablecoin, and revenue sharing for apps and L1, which are all in the early stages of research. According to the existing mechanism, settlement activities on the NYSE custom chain are also not within the scope of AVAX's capture; only the validator fee covers AVAX. However, C-Chain, which is currently the main capture channel, has a limited processing fee. On November 9, the Avalanche C-Chain fee was about US$26,500, making it difficult to support the revaluation of the token.
Judging from historical developments, this collaboration was not a surprise, but rather the result of long-term testing and screening. The NYSE launched platform development and sought regulatory approval on January 19, then reached a strategic cooperation agreement with tZERO on August 31. During the Avalanche Summit in September, Ava Labs President Charley Cooper revealed that the NYSE had been testing Avalanche for about a year, but it was not officially announced due to commercial secrecy. It wasn't until November 9, when the NYSE officially confirmed the technology selection, that the dust settled during this year-long testing period.
This timeline shows that the NYSE was extremely careful in technology selection, went through a full cycle from proof of concept to deployment of the production environment, and eventually locked down Avalanche among multiple vendors, mainly based on its comprehensive advantages in speed, throughput, and compliance control capabilities.
Looking ahead, the NYSE platform aims to go live in the fourth quarter, but key regulatory approvals are still required until then. The Avalanche Foundation said it will continue to track the platform's activity and role in the Avalanche economy through an economic research agenda.
Although AVAX's current value capture mechanism is not perfect, the entry into the NYSE certainly injected strong confidence into the RWA circuit. As more institutions adopt a custom L1 model, how to restructure the token economy model to achieve true value sharing will be a core challenge facing Ava Labs.