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Avalon was the second island to exist and the first whole sim to be put up for sale under the new auction system. Fizik Baskerville acquired it and it generated a LOT of controversy on the forums and even in-world due to Fizik being in charge of a marketing company and stating that he planned to use it to advertise some of his client's products.
This was regarded by Catherine Cotton and a vocal minority of residents as the dawn of a new age of Second Life commercialization, an invasion of "evil" capitalist corporations that would ruin the world for everyone and blanket it with advertising.
Later, claims of favoritism arose when it was found out that Fizik had both contracted with Linden Lab and been the receiver of Developer Incentives. Both Linden Lab and Fizik repeatedly assured the residents that no such thing was going on. No concrete evidence ever arose to support this conspiracy theory.
The Avalon project is still in existance and has expanded all over the main grid. However, nothing of note has happened since the original panic, and the general populace eventually accepted Fizik for the agreeable person that he is instead of the "evil" company he represents.
Avalon was, for a long time, the record holder for most users to have ever connected to a single simulator at once. When the island arose, it had no avatar limit in place, and a grand total of 81 residents were able to get in before it crashed. This record is even more impressive considering how few residents existed in Second Life back then, compared to now. Around the time of version 1.5, parties existed that regularly gathered 40+ residents in a single place, but it must be considered that from 1.2 to 1.5, the Second Life total population grew 1000%. The equivalent would thus be 810 residents in a single simulator, something far beyond what current technology can allow.