Decentralized applications are now an unacceptable part of our day-to-day life. Ethereum, one of the largest smart contract-oriented blockchains, is incredibly popular. However, its problem lies in too slow transactions and high transaction fees. So, gradually, Ethereum competitors began to appear. And one of them is Avalanche, which is fast and inexpensive.
Avalanche platform allows processing blockchain transactions faster at a minimal cost. In addition, Avalanche is committed to reliable and scalable blockchains that do not compromise security or decentralization. This blockchain has many adherents, and their number continues to increase.
What is the Avalanche Blockchain?
It is a blockchain platform with AVAX currency. It is an Ethereum competitor. Avalanche’s native token is the 10th largest, with a $33 billion market cap. The blockchain promises to combine fast confirmation times and scalability with the Avalanche consensus protocol. It can handle 4500 TPS. The total value of its protocol is over $11 billion, making it the fourth largest blockchain supporting decentralized finance.
The Avalanche ecosystem hosts Ethereum protocols, such as the SushiSwap decentralized exchange protocol and the Aave lending protocol. Avalanche, a platform for creating new frontiers in finance and decentralized applications, is one of them. It is how this product stands out from the rapidly growing business sector. The Avalanche consensus protocol offers the users low latency, high performance, and 51% attack resistance.
Is Avalanche Secure?
In the crypto world, security is a priority. This is precisely why Avalanche Smart Contract Audits are conducted. Despite the absence of block leaders, the Avalanche network is quite resistant to massive network attacks by intruders. It is because Avalanche uses a special cryptocurrency consensus mechanism called Proof of Stake, which is more secure than Proof of Work and requires less power. To attack Avalanche, a malefactor must take control of 80% of the validators at once. For example, an intruder must take control of 51% of its computing power to hack the Bitcoin network.
Benefits of Avalanche
- Transactions are processed quickly
- The compensation structure encourages participation
- Support for blockchain-based projects
Avalanche’s Cons
- Mandatory condition: Validators must stake 2,000 AVAX tokens.
- Competition from Ethereum
- Careless validators or attackers are not penalized with the loss of AVAX.
Avalanche is growing fast, and the platform has been looking to meet the demands of an increasing number of users while maintaining its characteristic accessibility and speed. Subnets turned out to be the right decision. Avalanche subnets allow individual projects to remain connected to the Avalanche mainnet via chains without taking up space on the main network.
What can be Done with Avalanche Blockchain?
Avalance helps enterprises develop their custom blockchain technology for particular use cases. This system combines a Proof-of-Stake consensus system and several custom-designed blockchain technologies to create a decentralized platform that developers can rely on. Avalanches allow you to run a wide range of decentralized application platforms on Ethereum.
Avalanche Consensus Protocol
It combines the strengths of the sets of consensus protocols:
Nakamoto
Nakamoto protocols. The advanced technology of the mysterious inventor of Bitcoin under the pseudonym Satoshi Nakamoto. Protocol type offers reliable, decentralized, and scalable blockchains. But transactions are slow, and the network is expensive.
Classical
Classical protocols are green, fast, and low maintenance but are usually not scalable and decentralized. For example, HotStuff, a classic protocol, was used in the Meta Platforms stablecoin project.
Avalanche is built across such chains:
- Platform chain: Where AVAX tokens can be provided as a stake in the verification of the primary network
- Exchange chain: Where AVAX tokens can be exchanged.
- Contract chain: Where AVAX tokens can be used in smart contracts or pay for gas. The contract chain hosts the Avalanche DeFi ecosystem, where users conduct most transactions. It runs on the Snowman Protocol, a dedicated application of this Avalanche Consensus Protocol. This chain implements the Ethereum Virtual Machine instance, which enables EVM-compatible Decentralized Applications.
Avalanche Smart Contracts
Avalanche is the fastest smart contract platform in the blockchain industry and has the largest number of validators to power it. The smart contracts platform supports autonomous blockchains and decentralized applications. Here are the key features of Avalanche:
- Participation incentives: fast response time and high uptime can increase the number of AVAX rewards a network member receives for processing AVAX transactions.
- Transaction fee structure: The cost of processing transactions depends on the Avalanche network’s availability and the transaction type. All fees are burned – removed from circulation – to make AVAX more scarce over time.
- Consensus mechanism: Transactions are confirmed using a special method that requires transactions to be confirmed by different random subsets of network participants. Only then can transactions be considered completed.
- Coin creation rate: AVAX users determine how quickly new coins are minted. Generally, the maximum supply of AVAX is limited to 720 million tokens.
Avalanche Protocol
The protocol has four interrelated mechanisms that make up the structural support of the consensus instrument. The four mechanisms are Snowball, Snowflake, Slush, and Avalanche. It represents a new family of protocols using metastability and randomized sampling to save and establish transactions.
Where Avalanche AVAX Came from?
The Avalanche blockchain was launched in 2020 by the well-known company Ava Labs. It was developed by researchers at Cornell University led by Emin Gün. Ava Labs raised $300 million in funding, and the Avalanche Foundation led public and private token sales totaling $48 million. Avalanche is trying to solve three main issues: transaction fees, scalability, and interoperability.
AVAX Token
It is a utility token that serves as an exchange platform for the ecosystem. Users need the AVAX token to pay transaction fees on this network. Ethereum gas fees are partially paid to miners and partially burned, while Avalanche fees are fully burned. AVAX is used in staking. Users wager at least 2000 AVAX can run the validator nodes and earn AVAX rewards. It is still used as the base unit of account between multiple subnets.
How to Stake AVAX Token?
AVAX holders can earn rewards by staking with other validators or becoming a validator by staking 2000 AVAX.
Hardware requirements are low, so most standard computers or laptops will be enough to become a validator. The user can stake tokens at the validator and get rewarded when the validator confirms the transaction.
Conclusion
Thanks to its growing ecosystem and design, Avalanche has much potential for long-term growth. In addition, the transaction fees are low, and the transaction completion time is fast; users value this blockchain for these benefits. Those wishing to invest in Avalanche should know that the price can fluctuate significantly. However, this is indeed a profitable area for investing.
FAQ
It is a blockchain platform and cryptocurrency that competes well with Ethereum and is known for its scalability and high speed.
It is built upon three blockchains that are interoperable and are called exchange chains and contracts.
Avalanche is a platform with a decentralized and scalable blockchain trilemma. Like Ethereum, Avalanche supports the implementation of smart contracts to develop decentralized application networks.
Avalanche can use Ethereum in any form. In addition, Avalanche allows the creation and use of blockchains on its network and has a token structure and fees.
You can earn high passive income from Avalanche bets. You will be rewarded when the blockchain is updated to add more transactions. Two betting options require minimum funds. e.g., to delegate cryptocurrency to a validator, you need an amount of 25 AVAX for validators – Avax 5000.
