Avalanche (AVAX)
If you ever find yourself backcountry skiing and caught in an Avalanche, do NOT ski faster - try and move sideways, out of the path of the oncoming onslaught of snowy death. If you instead find yourself running dApps on the Avalanche blockchain, well then ski as fast as you want!
Launched on mainnet by Cornell researcher Emin Gün Sirer in 2020, Avalanche is a Layer 1 Proof-of-Stake blockchain with a focus on improved contract speed and lower transaction costs when compared with legacy L1 systems. Avalanche has complete compatibility with the Ethereum Virtual Machine (EVM), allowing developers to easily port existing applications with a top-notch user experience.
Avalanche’s ease-of-use, technological innovation, token performance, and growing ecosystem all make it a formidable contender to become a household crypto name alongside Bitcoin and Ethereum. \n
Superior Blockchain Technology
The network consists of three distinct blockchains: X-Chain (for asset exchanges), P-Chain (for subnet creation), and C-Chain (for EVM contract execution). Avalanche’s primary network is a special subnet which validates contracts across all three chains. Becoming a validator on a custom subnet requires the user to stake 2,000 AVAX, Avalanche’s token. The Proof-of-Stake method reduces barriers to entry for validators to join the network, furthers platform decentralization, and uses less energy than Proof-of-Work systems. Thus, Avalanche makes it easy for users to stake their tokens and earn with limited up-front cost. Avalanche’s performance also proves to be superior when compared to other Layer 1 blockchains.
Avalanche boasts a transactional throughput time of over 4,500 transactions per second, transactional finality in under two seconds, CPU-optimal energy efficiency, and thousands of validator nodes with an 80% parameterized safety threshold making it impermeable to 51% attacks. These impressive stats combined with reduced transaction costs make it an attractive alternative chain for both existing and new crypto projects. \n
Flexible Ecosystem
Avalanche has a robust existing ecosystem of dApps across DeFi, institutional products, and NFTs. The three chain setup allows for maximum performance for a variety of use cases, unlike say Ethereum which is a one-size-fits-all solution. The X-Chain is optimized for DeFi projects such as Pangolin, or SushiSwap which has since been bridged from Ethereum. Governance protocols for institutions can be built on top of P-Chain subnets, allowing for proprietary chains across numerous industry verticals. For example, the Congress of Quintana Roo, a state in Mexico, utilizes Avalanche for governance decisions within their legislative body. The C-Chain API allows for the creation of smart contracts which enables easy porting of non-native applications with EVM compatibility to the Avalanche chain. The Topps NFT product originally existed on the WAX chain, but has since adopted Avalanche. Furthermore, Avalanche recently released a beta version of its Bridge, making it easy to connect wallets such as Metamask and Coinbase to transfer assets off of the Ethereum chain and onto Avalanche quickly and securely. The flexibility and scalability of Avalanche’s various chains make it an incredibly robust blockchain with an ever expanding ecosystem of projects.
A variety of liquidity pools and trading platforms have also emerged on the Avalanche platform. Projects such as Benqi and Trader Joe have considerable funds locked up. TVL on Avalanche is nearly $3 billion with 42% coming from Benqi alone which promises distribution of QI tokens in exchange for providing AVAX liquidity.
AVAX Performance / Funding
Avalanche’s AVAX token is currently trading ~$63 (as of 9/21/2021), up ~350% since the start of August. This places AVAX as the 11th largest cryptocurrency in the world with a market cap of $13.84 billion, putting it ahead of established tokens such as Uniswap and Terra.
The most recent price surge comes after news of a $230 million private token sale to a syndicate of investors led by Polychain, Three Arrows Capital, and R/Crypto. Proceeds from the sale will be used to support the Avalanche ecosystem which will further drive developer interest to the blockchain. As DeFi continues to grow (and ETH gas fees continue to rise), support from the Avalanche team will be crucial in gaining developers trust and confidence in the platform.
Takeaways and Conclusion
Avalanche’s three-network architecture is an impressive solution for developers across a variety of dApps. This is aided by the Bridge which makes porting existing projects seamless. It is expected that there will be more Avalanche users as the ecosystem begins to grow (namely in the DeFi space), and the AVAX token continues to perform well. With speed and cost outpacing that of other Layer 1 networks, Avalanche is a favorite to emerge as a major player in the race for the best blockchain to develop on top of. Ski fast my friends -- Avalanche lets you.
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