What happened
The Avalanche (AVAX 0.57%) cryptocurrency skyrocketed on Wednesday thanks to a freshly signed collaboration deal with Amazon (AMZN -2.11%) and its Amazon Web Services (AWS) cloud-computing arm. As of 4:30 p.m. ET, the cryptocurrency had gained 13.3% in 24 hours.
So what
AWS needed a default blockchain platform for managing and executing smart contracts, which can perform financial transactions and ownership transfers based on real-time market data. The most obvious choice would have been sector leader and smart contracts innovator Ethereum (ETH 0.61%), but AWS kept it interesting by going with a smaller and swifter competitor instead.
On Wednesday, Amazon and Ava Labs, the company that developed Avalanche, published blog posts explaining how developers using Avalanche tokens would now have access to a wide range of AWS assets and features.
“AWS is so valuable as it streamlines developers being able to go from zero to in-production with dedicated infrastructure,” said Ava Labs President John Wu. “This is especially important to early stage and start-up Web3 projects who really benefit from that blockchain-as-a-service model.”
Now what
This agreement made Ava Labs a member of the AWS Partner Network collection of technology providers, which puts the Avalanche name front and center when AWS-based developers are looking for tech solutions. Furthermore, Avalanche nodes can be deployed in the segregated GovCloud network in order to qualify for federal government projects with tight security requirements.
This is AWS’ first official blockchain partnership, but it will probably not be the last. Other smart contract platforms will likely follow in the months and years ahead, along with AWS support for stablecoins, cross-chain development networks, value storage coins, and more. But Avalanche was first, and that should earn the high-speed smart contracts platform plenty of development projects that might not have been headed in its direction before.
Avalanche’s token price is still down by 84% over the last year, even after Wednesday’s positive action. This cryptocurrency (like almost all of its peers) has a long way to go before it would be in range of setting a fresh all-time high. Still, this deal with a crucial internet platform is a fantastic step in the right direction.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Anders Bylund has positions in Amazon.com and Ethereum. The Motley Fool has positions in and recommends Amazon.com, Avalanche, and Ethereum. The Motley Fool has a disclosure policy.