# "Avalanche Explained" — IV Quarter 2023 (Eng) By [h3d3m](https://paragraph.com/@h3d3m) · 2023-10-23 --- **Intro** --------- **Avalanche** is a scalable, open-source ecosystem designed for building **DeFi** applications and deploying enterprise blockchains. **Avalanche** uses its unique structure to solve blockchain problems related to achieving scalability, interoperability, and usability. Developers can create custom blockchains for specific applications and benefit from the platform's revolutionary consensus. > **Snowman consensus protocol** is a combination of Nakamoto consensus and classical consensus. Thus, it combines the advantages of both systems, i.e. reliability, scalability and decentralization of Nakamoto, with the speed and efficiency of the classical protocol. **Avalanche** has three different blockchains: * The exchange chain ( **X-Chain** ) is used to manage digital assets. These assets may have different sets of rules governing their behavior, fees are paid in **AVAX** . * The contract chain ( **C-Chain** ) is compatible with smart contracts. Developers can create smart contracts for **DApps** . This chain allows developers to use **EVM** -compatible **DApps** as it uses a variant of the **Ethereum** Virtual Machine . * The platform chain ( **P-Chain** ) is used to coordinate network validators. It also keeps track of subnets or can create new subnets that act as group validators and provide consensus for individual blockchains. > You can read more about the technical aspects of the **Avalanche ecosystem on their official** [website](https://www.avalabs.org/) and in their [Whitepaper](https://www.avalabs.org/whitepapers) . **Based Analytics** ------------------- ### **Technical analysis** As of October 17, 2023, the **AVAX** token  is trading at ~ **$9.15** . The asset lost more than **90%** of its **ATH** (All Time High) in price The chart shows that the asset is trading within the previously formed inefficiency (blue zone). In addition to this, we also see that the asset price removed liquidity from equal minimums ( **EQL** ) and reached the value of **0.705 OTE** grid . Based on these data, you can model the expected directions of movement of the asset price in the future: * Removing liquidity from equal lows ( **EQL** ), closing inefficiency (blue zone), as well as the **0.705 OTE** grid level are strong arguments in terms of providing a level of support for the price, as a result of which the price may reverse to close the weekly **OB** (red zone) and equal maxima ( **EQH** ). * The above arguments may not have any effect on the asset price if the general market situation is negative. In this case, we should expect the price to go lower to close the lower inefficiency (blue zone) and remove liquidity from ~ **$2.74** . ![AVAX asset price movement chart relative to USDT](https://storage.googleapis.com/papyrus_images/1c58edb8e4d1fd04eaea84f1bbe2f1aa466c038988e58259e4a9c82b87624c66.png) AVAX asset price movement chart relative to USDT ### **Destination** Avalanche is an infrastructure blockchain and offers its own scalable platform, a method for solving consensus, smart contracts and blockchains. This classifies **Avalanche** as **a Tier 1**  project by area of ​​destination. ### **Capitalization** **Avalanche**  has a market capitalization of over **$3,250,000,000** . This classifies **Avalache** as **a Tier 1**  capitalization project. ### **Investment funds** **Avalanche received financial support in the amount of $285,000,000**  following several rounds of funding. The following funds can be distinguished among investors: * **a16z (Andreessen Horowitz)** * **Polychain Capital** * **Fundamental Labs** * **Dragonfly Capital** This classifies  **Avalanche**  as a **Tier 1**  project in terms of investment amount and quality of investment funds. ### **Twitter account** **Avalanche** has its own [**Twitter**](https://twitter.com/avax) account . Their  **twitter**  account has over  **960,000**  followers. ![Avalanche Twitter account](https://storage.googleapis.com/papyrus_images/842de7e71fa72408df70e16d465fe025abf9108a2af7f2ae2536f284049c8d68.png) Avalanche Twitter account **Avalanche** has changed the name of its **twitter** account (the old name was **@AvalancheAVAX ), so the twitterscore** resource is experiencing problems with comparing data on the quality of the **twitter** account. ![Avalanche twitter account data on twitterscore.io](https://storage.googleapis.com/papyrus_images/8c99661d39c5f7a55e17110d95017b75a333387f07a1d7965cd5223a01aa9075.png) Avalanche twitter account data on twitterscore.io Based on the data obtained, despite the lack of data on  **twitterscore , the Avalanche** project can be classified   as  **Tier 1**  by its  **twitter**  community. **Advanced Analytics** ---------------------- ### **Tokenomics** Total supply:  **720,000,000** Sales volume:  **354,774,418** (49.27%) ![](https://storage.googleapis.com/papyrus_images/5e962838004dae1802ee789e628db7a0976bdb1f8af28cab6fab944c7575883a.png) Market capitalization at an asset price of  **$9.15** : ~ **$3,252,612,425** Market capitalization at an asset price of  **$145.85**  (ATH): ~ **$32,383,507,363** Total Frozen Liquidity (TVL): ~ **$494,340,000** Number of implemented protocols based on the Avalanche blockchain (according to  [**defillama**](https://defillama.com/chain/Avalanche) ): 303 ### **Project team and development** **Emin Gün Sirer** - **Co-Founder** & **CEO of the Avalanche** project . Previously, he was engaged in professorial activities, in particular, at **Cornell University** . **Kevin Sekniqi** - **Co-Founder** & **COO of the Avalanche** project . Previously, during his undergraduate and graduate studies, he was engaged in research activities at **Microsoft** and **Nasa** . **John Wu** - **President of the Avalanche** project . Previously, he held the positions of general director ( **CEO** ) and analyst in various companies. **Lee Schneider** - **General Counsel of the Avalanche** project . Previously, he held the position of **General Counsel** at **block.one** , and is also **a Co-Founder** at **Genesis Block** . **Chris Lavery** is **the CFO of the Avalanche** project . Previously, he held the position of **Vice President** in the **blockchain.com** project . **Avalanche**  has its own  [**GitHub**](https://github.com/ava-labs)  account, consisting of 108 repositories. The commit graphs show that the project is actively developing. ![Graph of activity in the Avalanche project repositories on GitHub](https://storage.googleapis.com/papyrus_images/b0defcbfab4a99d8ad05df18f3d6e20a96caff1f50bd145724975f26554f45f4.png) Graph of activity in the Avalanche project repositories on GitHub [**According to the Developer Report**](https://www.developerreport.com/ecosystems/avalanche) resource,   you can also confirm active development of the project. ![Monthly chart of active developers](https://storage.googleapis.com/papyrus_images/b0b258c01e555d04c9b538965856c3ed7e8ad3fca72ff8c354b9cb2690fcba19.png) Monthly chart of active developers ![Monthly update schedule for repositories](https://storage.googleapis.com/papyrus_images/5b00de6696114bc32156df535cf7f3cf6a964dd077127dc601c17e4f9efd95ef.png) Monthly update schedule for repositories ### **Project community activity** **Avalanche** has its own [**discord**](https://discord.gg/hQD2utJJ) server. It has approximately **4,500** members. The channel has various chat, support, and news threads. In these chats you can regularly observe communication between server members. ![Avalanche project discord server](https://storage.googleapis.com/papyrus_images/bbe1774074df642bc8c556f0632cee480674f9d8fda14d174ed7e5ab2bded0d1.png) Avalanche project discord server **Avalanche** has its own [**telegram**](https://t.me/avalancheavax) channel. It has more than **34,000** members. The channel often publishes various news related to the project. It can also be noted that among users one can often observe communication in different region-specific chats. ![Avalanche telegram channel](https://storage.googleapis.com/papyrus_images/e255c72e3fe97ee02f7700d5d5e346c77f6f43bec142bf5d79715fb756858fe7.png) Avalanche telegram channel ### **On-Chain analytics** Based on the basic  **On-Chain**  metrics  **of Santiment SanBase,**  we will focus on the following points: * The drop in open interest (yellow chart) on April 25, 2023 affected the price of the asset (green chart) **AVAX** more strongly, relative to **BTC** and **ETH** . As a result, we can observe an enhanced development of the downward trend. * The repeated drop in open interest (yellow chart) on August 17, 2023, which can be more clearly observed on the **BTC** charts , influenced it by the emergence of a local upward trend. Due to the dominant position **of BTC** in the market (~ **50%** of the total capitalization), it can be assumed that the price of the **AVAX** asset is also forming a positive trend. This assumption can also be supported by technical analysis data (section **Base Analytics** ). ![On-Chain metrics of AVAX coin](https://storage.googleapis.com/papyrus_images/ae99cf77c63d50cdc9585fe03c0b0dcd8d8e0be5a6a05792c1d0627a3cd97f25.png) On-Chain metrics of AVAX coin ![On-Chain metrics of BTC coin](https://storage.googleapis.com/papyrus_images/81d3d5a7bd7b0089caae2ac86ce79b8e8ba858ef5b202413d95b76c44bed8435.png) On-Chain metrics of BTC coin ![On-Chain metrics of ETH coin](https://storage.googleapis.com/papyrus_images/e0f10ca72f42f8fe1a00e73f414c8da674330e1d0e45ad0e514929b76ddf33dc.png) On-Chain metrics of ETH coin > The sharp drop in asset data on September 17, 2023 occurred due to the use of the free version of **Santiment SanBase** . **DeFi Opportunities** ---------------------- Apart from standard accumulation and holding the coin in anticipation of further growth, our assets can be made to work. This will allow you to get additional profit without active participation. To implement this idea, you should plunge into the field of **DeFi** protocols, in our case based on **Avalanche** . ### **Benqi Liquid Staking** **AVAX** tokens can be **liquid staking** on the [**Benqi**](https://staking.benqi.fi/stake) protocol . As a result of such staking, we receive a synthetic asset - **sAVAX** . Advantages of a synthetic token: * Tied to the price of a natural asset ( **AVAX** ), but every year it becomes slightly more expensive relative to it. In this scenario, we receive ~ **5.96%** per annum on our deposit amount. * A synthetic asset can be withdrawn from staking at any time by exchanging it for a natural one ( **AVAX** ). * The synthetic asset can also be sent, for example, to **a lending** protocol or liquidity pool. This will allow us to further increase the existing ~ **5.96%** per annum. ![Liquid staking on Benqi protocols](https://storage.googleapis.com/papyrus_images/9fbc836f1042008609ba1d2cee474d59b04fc56cb47998a263db7f3ebb7a53cc.png) Liquid staking on Benqi protocols ### **Summary** **Avalanche** is a fundamental open source ecosystem that offers a platform for implementing subnets and blockchains, with its own consensus method. Many **DeFi** protocols and closed corporate blockchains are built on this platform. **Avalanche** has a large active community and trust from investors. Based on this, we can assume that the project has every chance of showing good growth in the future bull and overcoming the current **All Time High** (~ **x15** - **x20** ). > Conventionally, if you buy the **AVAX** token at the bottom of the market, in the amount of **$1,000** , at the maximum values ​​of the uptrend you can lock in a profit of ~ **$15,000** - **$20,000** . I advise you to follow this project. --- *Originally published on [h3d3m](https://paragraph.com/@h3d3m/avalanche-explained-iv-quarter-2023-eng)*