What is Avalanche? A Complete Guide — Check Now!
Avalanche is a blockchain that uses its Avalanche Consensus Protocol to scale capabilities as well as quick confirmation times. This protocol is able to process 4,500 transactions per second (TPS). In contrast, Ethereum can process just 14 transactions per second. As a result, the Avalanche blockchain can process 321 times faster than that of Ethereum (the largest smart contract-focused blockchain). The native token of Avalanche is AVAX.
● Specialty
This blockchain’s unique Avalanche consensus protocol promises:
● Low latency
● High throughput capabilities
● Resistance to 51% attacks
● Blazingly Fast, Low Cost, Eco-Friendly
The Avalanche protocol (an open-source platform) rightly calls itself “blazingly fast, low-cost and eco-friendly.” As Avalanche tries to solve Ethereum’s problems, such as low transaction speed and high fees, it is also called the “Ethereum Killer”.
If your smart contract-enabled application is deployed on Avalanche, it can easily outperform the competitors. Avalanche is fast becoming the preferred blockchain to build powerful dApps (decentralized applications) as well as customized blockchain implementations. Furthermore, developers can easily produce their own dApps and multi-functional blockchains on Avalanche.
Currently, the developers are working on subnets and other scaling innovations on Avalanche. Once these scaling innovations are achieved, it’ll help projects connect to the blockchain without needing to take up any space.
Quick Facts
● On September 21, 2020, Avalanche blockchain went live.
● The total value locked (TVL) in this protocol is US$11 billion. This makes Avalanche the 4th largest DeFi-supporting blockchain.
● Since its mainnet was launched, Avalanche has:
● Secured more than 450 individual projects
● Burned US$118 million worth of AVAX (reduces token supply available for trade and creates scarcity, which ultimately helps the price to increase)
● More than 1,350 individual block-producing validators
● More than 1.5 million community members across the globe
● AVAX is the 13th largest cryptocurrency (as of May 2022), with a market cap of US$7.7 billion (CoinMarketCap Data).
● You’ll find some of the protocols from Ethereum in Avalanche’s blockchain, such as:
● Aave (a lending protocol)
● SushiSwap (a decentralized exchange protocol)
● Successful projects on Avalanche blockchain:
● Trader Joe is the main decentralized exchange of Avalanche. In its liquidity pools, US$1.47 billion is locked.
● Benqi is a popular lending platform like Aave. Into its smart contracts, US$1.26 billion is locked.
● Avalanche’s technology is used by:
● Securitize (private securities)
● Prosper (prediction markets)
● Bilira (a stablecoin pegged to Turkish Lira)
What’s so Special about Avalanche?
● Transaction Finality Time: Ava Labs says Avalanche blockchain can achieve transaction finality in below 3 seconds. This makes the platform better suited for dApps, which require massive scaling. In contrast, the transaction finality time on Ethereum is 2–6 minutes, and on Bitcoin is 30–60 minutes.
● Interoperability: Avalanche blockchain achieves interoperability by allowing blockchains within a subnet as well as between subnets to communicate with each other. It, in turn, helps in complementing one another and supporting cross-chain value transfers.
● Inclusive: Avalanche runs on Avalanche Consensus Protocol. Most Proof of Stake (PoS) consensus mechanism blockchains allow only a handful of validators to participate in achieving consensus. However, Avalanche is more inclusive as it will enable anyone to join in the consensus mechanism with the ability to stake 2,000 AVAX or more.
● Others: Avalanche supports the EVM (Ethereum Virtual Machine). However, it uses another consensus mechanism for securing its network. Avalanche supports cross-chain value transfers without requiring bridges.
Avalanche: How Does it Work?
A blockchain is a decentralized system. So, a protocol must be there that will govern and help decide the validators (globally distributed participants). In the case of the Avalanche blockchain, this consensus mechanism among validators is achieved through the Avalanche Consensus Protocol. Team Rocket group, the precursor to Ava Labs, proposed this protocol.
The specialty of the Avalanche Consensus Protocol is that it successfully combines the benefits of two different protocols:
- Classical Protocol: This protocol was famously used by the Diem stablecoin project (previously Libra) of Meta Platform (known formerly as Facebook). The advantages of Classical Protocol are that they are low-maintenance, green, and fast. However, they are not particularly scalable or decentralized.
- Nakamoto Protocol: This technology was first proposed by Satoshi Nakamoto (the pseudonymous inventor of Bitcoin). The main advantages of this protocol are scalability, robustness, and decentralization. However, transactions on the Nakamoto protocol are not so fast. Operations are also high cost.
Avalanche blockchain is created on 3 chains:
● C-chain (Contract Chain)
● X-chain (Exchange Chain)
● P-chain (Platform Chain)
The Contract Chain hosts the DeFi (decentralized finance) ecosystem. This is where most of the transactions are carried out by most users — a specific app of the Avalanche Consensus Protocol known as the Snowman Protocol powers the C-chain.
How to Use Avalanche?
The steps to use Avalanche are:
Step #1: Buy AVAX Token
You can try the DeFi protocols on the Avalanche network and get on it by first buying its native token, AVAX, on Binance, Coinbase, Kraken, or other centralized cryptocurrency exchanges.
Step #2: Withdraw and Transfer Tokens
On your crypto exchange, you have to choose now “withdraw”. Directly transfer your AVAX token to your DeFi wallet like MetaMask. While doing this, you should be cautious enough to choose C-chain only. Otherwise, all your AVAX tokens may get lost irreversibly on the wrong chain.
You’ll get a similar user experience on the Avalanche interface as Ethereum. This is because the c-chain of both the blockchains runs on the EVM (Ethereum Virtual Machine). Suppose you have an Ethereum public crypto wallet address. In that case, you can use the same for withdrawing and storing your AVAX token.
You can connect your DeFi wallet to Hop Exchange or similar bridge protocols to easily bridge cryptocurrency into Avalanche from other chains.
Avalanche (AVAX) Token: What is It?
AVAX is Avalanche blockchain’s native token. It is hard capped and also scarce. This token is used for securing the network through the process of staking. AVAX is used to pay fees in the network. Between different subnets on Avalanche, it provides a basic unit of account.
Avalanche (AVAX) Token: Statistics
● AVAX Current Price: US$27.20 (as of May 31, 2022)
● All Time High (ATH): US$146.22 (as on Nov 21, 2021)
● Current Price is -81.11% down from its ATH
● Volume: US$1,022,025,851
● Market Cap: US$7,377,677,321
● Circulating Supply: 271,385,486 AVAX
● Total Supply: 404,229,626 AVAX
● Max Supply: 720,000,000 AVAX
● Avalanche ROI: +5424.33%
Avalanche (AVAX) Token: Price Prediction & Forecast
● A bullish trend in the later part of 2022 may make the AVAX price reach US$126.72 by the 2022-end. If all the partnerships and developments remain on schedule, the price may also hit US$200 by the end of this year.
● Avalanche token’s price may reach around US$600 per token by the end of 2025 if the partnerships, integrations, latest upgrades, and developments remain consistent and on schedule.
By 2030, the AVAX token price is likely to be anywhere from US$2,799 to US$3,287.
Also Read: Be Responsive To Change: Develop and Grow in Today’s Tech-Enabled World
