Avalanche Foundation announces a $290 million incentive for the ‘Multiverse’ program

The Avalanche Foundation has launched a $290 million incentive program called Multiverse to promote its new “Subnet” functionality. The Subnets’ intended utility is to encourage the development of a vibrant ecosystem of “scalable app-specific blockchains.” The foundation wants Web3 builders to develop subnetworks using its technology.

The Avalanche Foundation has established a $290 million fund to help developers add to the number of subnets on its blockchain.

The Avalanche Multiverse will be an ongoing initiative without a specified end date, with at least six phases to support various projects, the foundation said in a statement.

Subnets, also called subnetworks, are validators that allow others to establish their own Layer 1 or Layer 2 blockchains on Avalanche. Because Avalanche is proof-of-stake, projects can become validators by staking $AVAX tokens.

DeFi Kingdoms, a play-to-earn game built on the Ethereum sidechain Harmony, has created its own Avalanche subnet as a part of the Multiverse initiative, along with a new Avalanche-native token, $CRYSTAL. It’s among the first to benefit from the nine-figure initiative.

Avalanche’s subnets also can be engineered to offer Know Your Customer (KYC) features, allowing traditional financial institutions to build on the blockchain.

“Avalanche Subnets enable us to create an ideal environment for institutions to migrate on-chain,” Stani Kulechov, founder and CEO of Aave, said in a statement. “This is a significant leap toward a future where the barriers between traditional and decentralized finance cease to exist.”

The Avalanche Multiverse is, by design, fully customizable. It’s also a way for Avalanche to scale up, as more users on a single network mean more congestion. Subnets help redistribute traffic, the need for which has been seen on networks including Ethereum’s base layer and the ETH sidechain Polygon as more and more users join the space.

“Subnets will be the next growth engine in crypto, enabling novel functionality only possible with network-level control and open experimentation on a scale we haven’t yet seen,” said Emin Gün Sirer, director of the Avalanche Foundation.

Launched in September 2020, Avalanche is a proof-of-stake protocol that touts its smart contracts platform as the fastest in the blockchain space. In proof-of-stake systems, participants are required to stake tokens for the chance to be randomly selected to validate transactions.

Developers must stake 2,000 AVAX tokens (around $144,000 at current prices) to create and validate a subnet, according to Luigi D’Onorio DeMeo, a director at Ava Labs.

For projects that qualify, the Multiverse initiative could cover that cost. But the program can also dish out rewards to subnet users and liquidity mining incentives paid out to entities that stake tokens in order to help validate transactions in subnets.

The Avalanche Foundation said the Multiverse program will be divided into at least six phases to support multiple cohorts of projects.

Several subnets have already been created on Avalanche — including one by Shrapnel, a first-person shooter game that recently raised $10.5 million in funding. But DeFi Kingdoms is the first project to receive incentives under the Multiverse label, according to D’Onorio DeMeo.

This isn’t the first time Avalanche has incentivized developers. Its $180 million Avalanche Rush program for DeFi projects last year caused the $AVAX token price to surge 113%.