Avalanche (AVAX) is an open-source blockchain platform that enables the users to develop their own DApps, smart contracts and custom blockchains.
Conceptualised in 2018 & launched in 2020, Avlanche operates on a Proof of Stake (PoS) consensus that is more energy efficient and can process upto 4500 Transactions per second (TPS)
The Avalanche network supports ethereum, bitcoin, other cryptocurrencies, as well as collectibles and artworks.
How does it work ?
Avalanche platform consists 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 Main subnet which validates the transactions and secure the blockchains.
It is mandatory for every other custom subnet to connect with the Primary network or the Main Subnet by staking a minimum of 2000 AVAX.
The 3 chain Design -
Avalanche ecosystem consists of 3 independant blockchains -
A. Exchange Chain (X chain)
This chain acts as a exchange, responsible for creating and transacting assets and cryptocurrencies. The transaction fees are settled in the platforms native token AVAX.
B.Contract Chain (C-chain)
The C chain is one of the key features of the Avalanche platform that helps users to build secure & scalable DApps .
This chain enables smooth running of the Smart contracts and compatible with Ethereum Virtual Machine (EVM).
All the smart contracts made using Ethereum can be easily integrated in the Avalanche platform using this chain.
C.Platform Chain (P-chain)
This chain allows users to create their own custom chains like L1, L2 which are called as subnets. All the Subnets are connected to the Primary network play a major role in Validating and securing their own chains as well as the P-chain.
Subnet creation on this chain is unlimited. The users can launch another subnet when the limits are temporarily exhausted to meet the network demands and free up transactions.
The P-chain has limit of 4500 TPS which is 2x higher than Visa.
Each of these chains specializes in a task within the Avalanche ecosystem.
Instead of dependancy on a single chain, the distributed tasks amongst these chains keep the complete ecosystem agile, & achieve the golden trinity of blockchain traits — decentralization, security, and scalability.
Why Avalanche ?
Avalanche Bridge is a service added by the Ava Labs to enable quick, secure and low cost transfers of ERC-20 tokens from Ethereum to the Avalanche C-Chain & Vice versa.
This gives the platform an automatic exposure to billions of dollars token liquidity.
The bridge also works with metamask, coinbase & walletconnect.
- Opensource Platform
Avalanche is being adopted by many users to create & develop smart contracts, DApps, dedicated blockchains and subnets. Not only this but users can also build a token or mint an NFT on Avalanche. The platform has strongly improved its position in the DeFi space in 2021.
- Deflationary token
The native utility token of Avalanche platform AVAX is used to pay up for transaction fees, staking, create subnets and much more.
AVAX tokens used to pay the transaction fees are burned from the supply which permanently lowers the amount of tokens in circulation, which makes it deflationary and helps in increasing its value over a period of time.
- Snowman ++ tech update
The recent snowman ++ tech update by Avalanche leads to direct reduction in validator bandwidth/disk/CPU usage. In addition to this the transaction fees were also lowered to a minimum on 25 nAVAX with less fluctuations.
- Platforms of Platforms
The unlimited subnet creation (where each subnet can create multiple blockchains) helps to form a heterogeneous network of interoperable blockchains. The platform is not only limited to EVM or migrating apps from Ethereum but any custom VM like AVM, WASM, Bitcoin and much more.
Any project from any blockchain can be easily ported over and benefit from decentralization, low fees and customization.
- Enterprise Adoption
Avalanche not only targets the $200 billion DeFi market but also tokenising $700 trillion traditional financial assets.
Using subnets, the enterprises can build their own compliant subnets, deploy complex rule sets and customisable blockchain on any VM.
- Growing DeFi on Avalanche
Largest DeFi platforms are being build on Avalanche platforms. Some of them are
Who are the Competitors ?
Algorand - https://www.algorand.com/
Cosmos - https://cosmos.network/
Meter - https://meter.io/
Tezos - https://tezos.com/
Fantom - https://fantom.foundation/
Harmony - https://www.harmony.one/
Team
Emin Gün Sirer, the CEO & founder of Ava Labs, is a computer scientist and associate professor at Cornell University, worked with Kevin Sekniqi and Maofan ‘Ted’ Yin to build the basis for AVAX and the network before its 2020 launch. He has a strong academic background in distributed systems research.
Tokenomics
Total Supply: 395,328,681 AVAX.
Circulating supply: 243,189,806.81 AVAX.
Max capped supply - 720 million
Token type - Deflationary (All fees paid in Avax are burned which increases the scarcity of token supply )
Allocation
- Staking Rewards: 50%.
- Public Sale: 10%.
- Team: 10%.
- Foundation: 9.26%.
- Community and Dev Endowment: 7%.
- Strategic Partners: 5%.
- Private Sale: 3.46%.
- Seed Sale: 2.5%..
- Airdrop: 2.5%.
- Testnet Incentive Program: 0.28%.
Utility
Fees for transactions made on the Avalanche network
Create public & private blockchain
Minting & trading assets
Interacting with smart contracts
Authorize or run validator to secure Avalanche
Base currency for various Avalanche chains
SWOT
Strength - Opensource platform, 3 chain design & strong consensus mechanism, Interoperability, low transaction fees & capped supply with burn model.
Weakness - Recent cyber attacks on VEE finance DeFi platform of Avalanche network 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.
Zabu Finance DeFi platform built on Avalanche lost a total of $3.2 million worth of tokens.
These cyber heist have dented the image of Avalanche which can be observed in terms of the fall in AVAX coin price after the news announcement.
Opportunity - Avalanche Rush (180m liquidity incentive program for De-Fi), Avalanche Bridge, Fundraising of 60 million dollars, Rapidly expanding ecosystem.
Threat - Wealth Distribution (The top 30 Avalanche wallets hold little over 37% of the total circulating supply of $AVAX), Cyber heists, Low APY yields.