Since its launch in 2015, Ethereum has always been the go-to home for decentralized apps (DApps) and custom blockchain networks. However, throughout the years, users wanted more from their platform, specifically with its scalability and speed of transaction—that’s where Avalanche cryptocurrency came in.
Avalanche (AVAX) plans to dethrone Ethereum as the leading blockchain for smart contracts and DApps.
If you’re curious to learn how they plan to achieve this, here’s everything you need to know about Avalanche cryptocurrency:
What is Avalanche?
Avalanche or AVAX is a layer one blockchain platform designed for custom networks and decentralized apps launched in 2020 by Ava Labs.
How it works is it builds upon the blockchain developed by Ethereum and provides solutions for issues in the platform. It promises to achieve this by offering significantly faster transactions without sacrificing scalability, decentralization and security. Moreover, cheaper costs, rapid transactions and eco-friendliness.
AVAX developers can make endless amounts of customized blockchain networks and decentralized apps. However, before anyone can operate their blockchain on the Avalanche, they need to pay a subscription fee first.
With its reliable features, Avalanche quickly garnered praise from users across the world. Avalanche quickly gained the attention of investors around the world. Despite only having 2 years of experience, they now sit around the number 10 spot in one of the leading exchanges, according to CoinMarketCap.
How does Avalanche Network function?
To live up to its promise, Ava Labs came up with the idea of using three separate blockchains, each one providing a different function. With this idea at hand, they were able to provide solutions for the issues blockchains were facing for the longest time.
The three blockchains that makeup Avalanche are the following:
The exchange chain (X-chain)
The exchange chain is responsible for making and exchanging assets such as the native cryptocurrency, Avalanche token (AVAX). It follows a specific set of rules called the Avalanche consensus protocol.
What this does is randomly check transactions repeatedly to increase the chances of their legitimacy. This is why it involves random nodes working parallel to each other
Since this protocol doesn’t require users to own special computer hardware, it ensures energy efficiency, low latency and high throughput.
The contract chain (C-chain)
As the name suggests, this chain does the heavy lifting for all smart contract creations and decentralized apps. It uses the Snowman consensus protocol which works similarly to Avalanche with the difference being that it uses blocks in a linear process.
The platform chain (P-chain)
The P-chain links coordinators and enables the creation of subnets which are smaller sets of validators in the coordinator. Similar to the contract chain, it also uses the snowman consensus protocol.
Famous layer-2 projects that integrated with Avalanche
Because of the scalability and other benefits offered by Avalanche, several developers were quick to use the blockchain for their projects. Some of the most famous ones seen today include:
As the popularity of NFTs began to rise in 2021, several marketplaces were launched in Avalanche in the same year. Since their launch, these platforms have already recorded thousands of sales and trading volumes.
Here are some of the most famous AVAX NFT Marketplaces:
- NFT Key
- Yeti Swap
Since Ava Labs Team launched Avalanche back in 2020, several decentralized exchanges were introduced to the public that integrated its technology. This include:
- Lydia Finance
- Elk Finance.
What are Avalanche coins?
The Avalanche cryptocurrency runs as the blockchain’s native coin and serves as the utility token in maintaining the platform’s ecosystem. A total of 720 million AVAX coins were created and it’s distributed throughout the blockchain for staking rewards, incentives, airdrops and more.
Here’s a more in-depth look at where the supply of Avalanche coins are distributed to:
- 2.5% – seed sale,
- 3.5% – private sale
- 10% – public sale
- 9.26% – to the foundation
- 7% – community endowment
- 0.27% – incentive program in testnet
- 5% – strategic partners
- 2.5% – airdrops
- 10% – team
- 50% – staking rewards.
Benefits of using Avalanche
To draw more users to use avalanche and invest in its native tokens, it provides various benefits that give them an edge over other competitors in the market. These are:
Low transaction costs
One of the main reasons why users see Avalanche as a rival to Ethereum is that it has significantly lower gas fees, by a mile.
Paid in Avalanche coins (AVAX), gas fees are automatically subtracted from the user’s accounts when they make transactions within the blockchain. The fees will then be used for different purposes such as staking, creating custom networks, minting assets and more.
A glaring problem that Ethereum users experience is network scalability since the blockchain can only process several transactions per second but it wasn’t robust enough to support the demand as users increased.
That’s why before AVAX came into fruition, developers already had scalability as one of the areas that they wanted to improve upon. This is why Avalanche was designed to process 6,500 transactions per second which are thanks to its use of three separate blockchains on its mainnet.
Also, Avalanche states on their website that they’re the fastest smart contracts platform in the industry based on time-to-finality.
One of the most impressive things about the developers of this blockchain is how far they’re willing to push its usability. Avalanche cryptocurrency was quick to pick up traction in the community thanks to its various use-cases such as:
- Minting a token
- Running a validator
- Integrating an exchange
- Launching a decentralized app.
Should you invest in Avalanche?
If you’re looking for a reliable and sustainable blockchain network that can house various custom blockchain networks and decentralized apps, then Avalanche is a solid choice. With benefits such as low fees, useability and scalability, this platform proved to be a worthy rival to the leading blockchain platform, Ethereum.
Moreover, it’s developed by the most talented group of individuals in the crypto industry so you won’t have to worry about its quality and future. If you want to invest in Avalanche coins, you can buy them on leading exchange platforms such as Binance, Bitfinex and Kucoin.