AOFEX Insight: What Happened to Avalanche from “Snowflake” to “Avalanche”?
Recently Avalanche is a popular topic among investors, driving its token AVAX to break a record and its ecosystem to boom. Many developers are optimistic about Avalanche. So far around 300 projects were inspired by Avalanche and have been built on the Avalanche public chain, where 1 billion API calls are processed every day. Moreover, Avalanche has thousands of active verification nodes, indicating that it has higher activity and greater potential.
In May 2015, Cornell University published a dissertation Snowflake to Avalanche: A Novel Metastable Consensus Protocol Family, leading to many quick reactions and creating a revolutionary technology innovation concept compared to Satoshi Nakamoto’s PoW mechanism and Ethereum smart contract.
From 2018 to 2019, Kevin, professor and computer scholar of Cornell University, Ted Yin, the leader author of Facebook Libra protocol HotStuff, and IC3 co-founder Emin developed a new set of mechanism — — Avalanche. This mechanism enables huge information to be processed on the whole blockchain network and solves problems at low cost and efficient scalability. Literally, Avalanche means that pieces of snowflake gather together within a short time and quickly develop into snowslide. That is to say, the protocol can process lots of information within a very short time.
AVAX is the token of Avalanche protocol. Avalanche is an open, programmable smart contract platform for decentralized applications, financial assets, trading and other services, and featured by enterprise-level coordination and high scalability. Designed to be a global asset trading platform, Avalanche allows anyone to issue or trade assets in any form using smart contracts and other advanced technologies and to control these assets in a decentralized way.
With a groundbreaking protocol architecture, the Avalanche protocol allows you to confirm a smart contract platform within 1s and supports all contents of the Ethereum development kit, to make it possible to gather millions of complete block producers. AVAX is popular due to its innovative consensus mechanism and architecture.
1. Consensus mechanism
The Avalanche protocol is also featured in scalability, security and high speed based on the decentralized network. After a transaction is made, the validators of the Avalanche protocol will go through “repeated random sampling”, where each node will randomly select and ask a batch of adjacent nodes (with quantity fixed). If most nodes have the same information of the transaction, the transaction is judged to be true. Different from existing consensus mechanisms, Avalanche protocol validators don’t need expensive and professional hardware; the nodes are only for transaction verification and won’t waste too many resources.
2. Architecture
The Avalanche protocol consists of 3 architectures, including X chain, C chain and P chain.
X chain refers to a transaction chain, mainly processing P2P asset building and trading among individuals. The Avalanche protocol employs a directed acyclic graph (DAG), which links a single transaction to other transactions instead of merging all transactions for verification. Optimized for numerous events, DAG performs better in scalability. C chain means the smart contract chain. It can be compatible with Solidity smart contracts and Ethereum development tools, so that Ethereum developers can migrate applications to the Avalanche protocol seamlessly. P chain is the platform chain, mainly responsible for staking tokens, coordinating network validators, and developing customer subnets. Each Avalanche protocol validators verifies on P chain, helps secure the network, and creates dynamic or private subnets.
Apart from its own muscle, AVAX value is enhanced due to many favorable factors:
3. Huge fund support
AVAX price was soaring on September 16 after Avalanche announced to have raised funds from Polychain Capital, Three Arrows Capital, and Dragonfly Capital. It is the largest investment Avalanche has ever received so far. It indicates that large institutional participants are interested in Ethereum competitors.
4. Rising liquidity migration and TVL
Recently assets are being migrated to Avalanche from the Ethereum network to participate in its increasing decentralized finance (DeFi) ecosystem. Since August 19, the TV of Avalanche has been raised a lot.
5. New partners
Due to the partnership with Topps, collectibles & sports memorabilia company, Avalanche NFT ecosystem has attracted many investors. Topps has released its “Inception” NFT digital collectibles on the Avalanche NFT ecosystem. As one of the top DeFi protocols in the cryptocurrency ecosystem, the Aave community is voting to confirm whether investors agree to release AAVE on the Avalanche network. If passed, the TVL of Avalanche may further go up because the AAVE on Ethereum may be migrated to Avalanche. Investors, inspired by such news, are showing higher interest in AVAX.
Are you interested in Avalanche since you have leant about so many positive effects from market and technology? Welcome to follow AOFEX and AOFEX will bring you more digital finance hotspots and provide you with global leading service of digital assets.
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