Why You Should Pay Attention to Avalanche (AVAX) by Ava Labs
With ETH gas fees still reaching $100 and Solana’s resent downtime, there is still plenty of room for a scalable smart contract blockchain.
Ava Labs has managed to build something very unique and exponentially scalable and already has huge brands and investors onboard like Topps and a16z . Here’s what you need to know about the worlds first internet of finance blockchain:
Intro to Avalanche
The Avalanche blockchain has been quickly growing and has seen its AVAX token increase over 1,400% year-to-date. Spearheaded by Cornell computer science professor Emin Gün Sirer, the project has raised a total of $290 million from the likes of Polychain and Three Arrows Capital.
Avalanche is a platform for creating custom blockchain networks and decentralized applications (dApps). Created by Ava Labs, the Avalanche crypto platform is one of many projects seeking to unseat Ethereum as the blockchain ecosystem’s most widely utilized smart contract platform
Avalanche claims to achieve greater scalability than Ethereum offering a high transaction throughput of 4,500 transactions per second (TPS). Its native, fixed-supply AVAX coin is used for paying transaction fees and for staking in Avalanche’s consensus process.
A number of projects have integrated with its platform — including, SushiSwap, Reef and Securitize. Additionally, Avalanche is developing a bridge to the Ethereum network, which will allow users to seamlessly transfer assets between the two chains.
Avalanche Crypto Network Architecture
The core of Avalanche’s architecture is a subnetwork (subnet) called the Primary Network. A subnet is a group of transaction validator nodes that coordinate to reach consensus on the state of a set of blockchains. Avalanche’s Primary Network secures three built-in blockchains: the Exchange Chain (X-Chain), Platform Chain (P-Chain), and Contract Chain (C-Chain).
- The X-Chain is a platform for creating and trading crypto assets including AVAX.
- The P-Chain coordinates transaction validators, tracks active subnets, and enables the creation of new subnets and custom blockchains, including private blockchains.
- The C-Chain facilitates the creation of smart contracts including NFTs.
Each blockchain in the Avalanche ecosystem is validated by a single subnet, but an individual subnet can validate multiple blockchains. Likewise, a validator node can be a member of many subnets. A key aspect of Avalanche blockchains is the ability to design subnets that maintain particular properties, such as requiring validators to meet certain requirements for regulatory purposes. For instance, a private blockchain built on the Avalanche could require validators to reside in a particular country.
Not only can subnets limit their validators based on certain criteria, but validators can choose to be part of as many or as few applicable subnets as they wish.
This mutual selection process contrasts with validation on networks such as Bitcoin, where all nodes typically compete to validate all transactions. As a result, both Avalanche’s subnets and their validators are able to consciously create ecosystems that are specifically in line with and focused on their respective priorities.
The Avalanche network infrastructure is built to enable modular blockchains that are scalable and interoperable with other entities on the Avalanche blockchain.
Avalanche’s Consensus Model
Avalanche utilizes Snowball, a Proof-of-Stake (PoS) consensus algorithm which requires users to stake AVAX to become transaction validators. Validators are required to stake at least 2,000 AVAX coins to participate in consensus. You can also participate in consensus by delegating your AVAX to a validator. You must delegate at least 25 AVAX to participate.
Why Avalanche is the Future
1)All 3 of Avalanche’s chains are interoperable so you can fluidly transfer assets across chains for different use cases.
2) Avalanche was built with serving financial markets in mind. It has native support for easily creating and trading digital smart assets with complex custom rule sets that define how the asset is handled and traded to ensure regulatory compliance. Such assets represent a massive market, just the derivatives market alone is worth a staggering $800+ trillion.
3) Existing Ethereum DAPPs can easily be ported over and use all the existing tooling such as Metamask and Truffle
4) Any custom VM can be used when migrating your DAPP allowing any project from any blockchain to be easily ported and benefit from the performance, decentralization, low fees and customization Avalanche offers.
5) $AVAX is a fixed capped supply token like $BTC which creates scarcity and won’t suffer from the continuous dilution through inflation like other staking platforms. Avalanche makes an excellent payment platform with VISA throughput speeds and low latency and cheap fees.
6) Enterprises can create their own managed subnets if they need for regulatory purposes or require validators to hold certain licenses.6. Enterprises can create their own managed subnets if they need for regulatory purposes or require validators to hold certain licenses.
7) Speed is more than just TPS, equally important is latency
8) Bitcoin has finality of 60 mins
- Ethereum 2.0 is 6 mins
- Polkadot is 60 seconds (60 mins to external chains)
- Avalanche has a sub 1 second finality, which is immutable and completely irreversible whilst also being able to process 4500 TPS
9) Avalanche is essentially a blockchain of blockchains which results in huge exponential viral growth.
The Bottom Line
In a crowded market of Ethereum-competitors, Avalanche seeks to distinguish itself with its focus on DeFi and its three-pronged offer of customizability, scalability, and interoperability.
SourcesA Quick Overview of Avalanche (AVAX) and Why You Should Be Paying Attention
This article is the contents of a tweet thread seen below but in article form to make it easier to read.cryptoseq.medium.com