Written by:Paras Katoch

What is Avalanche Crypto (AVAX) | An Alternative to Ethereum?

Blockchain scalability and interoperability are a case of concern and then came Avalanche crypto with AVAX coin to the rescue. Famously known as “Platform for Platforms“, Avalanche grabbed a lot of interest from investors and developers that led to the rise of its native token AVAX. Within a year from the launch of its ICO, it has successfully made its entry into the list of top 20 coins by Market Cap. This is one of the top financial projects that need to be discussed on our website. Let’s dive into Avalanche –

Table of Contents

  1. What is Avalanche Crypto?
  2. What is Avalanche Coin (AVAX)?
  3. How does Avalanche work? Consensus mechanism
  4. Avalanche Architecture
  5. 4.1 Exchange Chain (X-Chain)
    4.2 Platform Chain (P-Chain)
    4.3 Contract Chain (C-Chain)
  6. Avalanche crypto AVAX ICO
  7. 5.1 Token Distribution
  8. Avalanche VEE Finance Hack
  9. Avalanche Advantages
  10. 7.1 High Transaction Speed
    7.2 Advance Interoperability
    7.3 Energy Efficient
    7.4 Avalanche Ecosystem
    7.5 Low Transaction Fee
  11. Avalanche Crypto Price (AVAX)
  12. Crypto Leaks Allegations
  13. Avalanche Price Prediction
  14. Where to buy Avalanche Crypto Coin (AVAX)?
  15. Is Avalanche Coin worth investing in?
avalanche-avax-coin

What is Avalanche Crypto?

Avalanche (AVAX) is an open-source blockchain that is both scalable and interoperable. It supports decentralized apps and smart contracts on similar grounds that of Ethereum and Polkadot blockchains but at lightning-fast speed with low cost and less energy consumption. You can build your own blockchain on Avalanche and create Dapps that will be faster and better than creating them on Ethereum.

Avalanche crypto comparsion
Image source: avax.network

The whitepaper was published in the year 2018. However, the mainnet was launched later in September 2020 by Emin Gün Sirer along with two co-founders Kevin Sekniqi, and Maofan Yin. It claims to be the first-ever smart contract platform that confirms transactions within a second.

Avax Emin+Gun+Sirer
Emin Gün Sirer

Avalanche supports SOLIDITY (the language of Ethereum blockchain)

What is Avalanche Coin (AVAX)?

Avalanche Coin (AVAX) is the native token of the Avalanche blockchain. It serves numerous purposes on the network like securing the network, pay for transaction fees, reward validators, platform governance and of course a peer to peer payment currency within the network. Pretty much similar to Polygon MATIC token.

Avalanche coin AVAX features
Image source: avax.network

Unlike other tokens, AVAX is burned at various fronts – in transaction fees, creation of blockchains and creation of subnets. This feature reduces the total supply of AVAX in circulation, making it more scarce with time. Of the total supply, 360 million have been released during the mainnet launch and the remaining supply will be minted according to the Avalanche algorithm as explained in the whitepaper.

Total supply of AVAX is limited to 720 million

How does Avalanche work? Consensus mechanism:

Avalanche combines the best of both worlds i.e consensus mechanisms – Nakamoto consensus which uses proof of work (POW) and Classical consensus which uses proof of stake (POS) protocol. It termed it Snow family of Protocols.

Avalanche Consensus mechanism
Image source: Avalanche blog

Understanding Snow Protocol:

Snow protocol validates a transaction by deploying a small subset of validators chosen by the initial validator (that recognize the transaction in the pipeline) by randomly selecting the subset from other lists of validators. This process is followed by subsets responding whether or not the transaction is valid. Each of the validators has its individual opinion on validating or rejecting the transaction.

For a given transaction, if a large group of validators agrees to validate a transaction, it will be passed into the system and accepted by the initial validator even though a validator raises a concern in future on the same transaction.

Avalanche crypto snow protocol in action
Snow Protocol by Katoch Tubes

The same goes for rejecting a transaction. If a transaction is rejected by a large group of validators, it will never be accepted in the system even if a validator raises a validation error in future.

Avax Coin consensus protocol

The whole process may sound complicated and time-consuming. However, it takes a fraction of seconds for the network to validate and process the transaction.

Avalanche network can process 4500 transactions per second

If there’s a conflict in the system that divides the validators on the status of a transaction. The group of honest validators jumps in to check and validate the transaction. The status of the transaction will be deemed final as per the decision made by the honest validators.

Take note, if any of the honest validator validate the transaction, all the other honest validators will follow its response and approves the transaction. It’s like following the suite, hence the name Avalanche.

Avalanche Architecture:

Avalanche comprises of 3 in-build blockchains, each assigned a specific job within the network. All three blockchains are connected to the Primary network which is the prime subnet and is used to validate and secure the blockchains. It is mandatory for every other custom subnet to connect with the Primary network by staking at least 2000 AVAX. Let’s explore the blockchains –

What is subnet on Avalanche
Image source: Avalanche blog

Internet Computer (ICP coin) also utilize subnets to increase network capacity.

Exchange Chain (X-Chain):

X-Chain act as a platform for creating and trading digital assets with set rules. It’s just like trading equities and commodities in the real market. AVAX is one of the digital assets that is being traded in this blockchain to pay the transaction fees. It has an API to allow developers to create and trade digital assets.

Platform Chain (P-Chain):

The P-Chain maintains the subnets in the network. It keeps track of active subnets and supports the creation of new subnets. The P-Chain API allows the users to create subnets, create a new blockchain and add validators to subnets.

Contract Chain (C-Chain):

The C-Chain supports and allows the creation of smart contracts using the C-Chain API. C-Chain includes instances of Ethereum virtual machine which can run Ethereum built Dapps and smart contracts on its platform. Imagine it like running Windows OS on Macbook using virtual software.

Apart from these 3 blockchains, Avalanche is capable of creating custom chains and own custom virtual machines. This features attracts developers to create and build multiple Dapps and blockchains using any logic they wish to include.

Avalanche crypto architecture
Image source: Avalanche blog

Avalanche supports creation of custom blockchains with virtual machines (VM)

Avalanche crypto AVAX ICO:

AVAX launched its ICO in the month of July 2020, raising a total of $42 million within 4.5 hours at a value of $0.50 per token. The investors who bought and held the ICO to date must have seen a meteoric rise in the price level and subsequent rise in their Avalanche holdings since more and more projects are either shifted from Ethereum to Avalanche or being created on the platform itself.

Token Distribution:

360 million AVAX tokens were minted at the launch date, while the remaining 360 million are locked and will be used for staking rewards, to be released over decades.

AVAX token distribution
AVAX Token Distribution

Avalanche VEE Finance Hack:

VEE Finance is a DeFi platform of Avalanche network. Recently, on September 21, 2021, it became a victim of cyber heist which resulted in a loss of 8,804 Ether (ETH) worth $26 million and 214 Bitcoin (BTC) worth $35 million just days after releasing its mainnet on Avalance blockchain.

This was the second attack on a DeFi platform built on Avalance, the first attack was back in September 12, 2021 on Zabu Finance which lost a total of $3.2 million worth of tokens. The back to back cyber heist has dented the image of Avalanche which can be observed in terms of the fall in AVAX coin price after the news announcement.

Avalanche Advantages:

High Transaction Speed:

Avalanche is the first and the fastest platform that confirms transactions in under a second using snow protocol. Apart from it, it has a processing capacity of 4500 TPS making it one of the top blockchains when it comes to speed.

Advance Interoperability:

Interoperability means the ability of a blockchain to seamlessly communicate with any other blockchain. Ethereum was faced with such issue when it saw an increase in adoption rate followed by network congestion.

Avalanche on the other hand has this built-in feature. It can seamlessly communicate with Dapps built on Ethereum (ETH), COSMOS crypto (ATOM) or Polkadot (DOT) blockchains. Making it a viable option when it comes to app creation. Fantom (FTM Coin) is competing with Avalanche in the same space.

ERC-20 tokens can be seamlessly transferred to Avalanche blockchain

Energy Efficient:

Avalanche is a green blockchain and consumes far less energy compared to its peers. It is CPU-Optimal which means when there’s no work or transactions to process, the system turns dormant and waits in a low energy state hence utilizing far less energy than normal. Polkadot (DOT) and Cardano (ADA) are the only energy-efficient chains that match the efficiency of Avalanche (AVAX).

Avalanche Ecosystem:

The Avalanche ecosystem is developing at a rapid pace. It has projects that run on both Avalanche and Ethereum blockchains. DeFi projects like Pangolin, Trader Joe and YetiSwap (NFT marketplace) are some of the top projects on the Avalanche ecosytem.

Low Transaction Fee:

Avalanche offers a competitive transaction fee compared to other blockchains like Ethereum etc. Please refer to the fee schedule shared below –

Avalanche network transaction fee
Image source: Avalanche blog

Checkout Avalanche partnerships taking AVAX to the Moon.

Avalanche Crypto Price (AVAX):

Please check the latest Avalanche crypto price, shared below –

Crypto Leaks Allegations:

Crypto Leaks has released a series of videos highlighting the unethical practice by Avalanche developer Ava Labs to self-promote itself by bad-mouthing the competitors. According to the self-proclaimed whistleblower, Ava Labs paid AVAX tokens & equity to Law firm Roche Freedman to ridicule its rival Dfinity (ICP Coin) and Solana (SOL).

In a video, the founding member of Roche Freedman Kyle Roche has been heard saying that the firm has been paid by Ava for the same act. The CEO & founder of AVAX Emin Gün Sirer has responded to the allegations by calling them ridiculous and not true.

Avalanche Price Prediction:

Avalanche (AVAX) is one of the promising projects that rose to new heights within a year of inception. It has hit an all-time high of $80 and an all-time low of below $10 during the recent market crash. Clearly, it is one of the volatile cryptocurrencies on the exchange with a high fluctuation level.

It’s high adoption rate and seamless interoperability with the Ethereum network at a fraction of cost and high speed have attracted a lot of attention from developers and investors. There are number of apps that have migrated from Ethereum to Avalanche given the benefits offered by the platform.

Though the recent cyber heist on its DeFi applications has tarnished the image of the project, it hasn’t affected the positive sentiments surrounding the blockchain. It is quite fair to say, Avalanche is on its way to hit $200 mark per token and the day won’t be far for this token to make it to the top 10 list of cryptocurrencies by market cap.

However, investors should keep the volatility factor in mind. High fluctuations may boost or drain wealth in an instant.

Harmony One Coin can be an alternative and cheaper investment option

Where to buy Avalanche Crypto Coin (AVAX)?

You can buy Avalanche crypto on the leading cryptocurrency exchange like Binance, Crypto.com and Gate.io. Just create an account, verify your identity and deposit USD to buy AVAX coin and other digital assets.

AVAX is waiting to go mainstream on popular blockchains link WazirX, Bitfinex, Poloniex and Coinbase at the time of writing this post.

Watch the complete video on Avalanche Crypto Project:

Is Avalanche Coin worth investing in?

Avalanche is one of those promising projects with a proven use case. The ability to support Solidity and interact seamlessly with Ethereum makes it one of the most desirable cryptocurrencies of all time. If this wasn’t enough, low transaction fee clubbed with lightning fast transaction speed is a treat for dapps and smart contract developers.

Moreover, one should remember the supply of coin is limited and consistent coin burn at the time of creating an asset or paying for a transaction fee makes it more scarce overtime. A shift in preference over Ethereum has already been observed among developers. There’s still a long way to go for Avalanche to be totally secure and bug free but that’s something every other blockchain is working towards.

If you like the use case and features of this project, I strongly suggest adding it to your portfolio list. However, if you are more interested in competing blockchains like Polkadot, Cardano or Etherum, then you should park your money as per your interest and analysis.

This completes my review of Avalanche crypto (AVAX) coin. In the next post, I will put some light on the meme coin SHIBA INU (SHIB coin) and Algorand ALGO coin, I will discuss their plan of action and possible price prediction. If you like the post, please share it and educate your friends. Do remember to subscribe to my YouTube channel for more informative content, released every week.

DISCLAIMER:

Cryptocurrency is a highly volatile market. All the information shared in the post is for knowledge purpose only. By no means, it’s financial or investment advice. Readers are responsible for their own investment decisions and should only invest in cryptocurrency after proper research.

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