Avalanche Coin (AVAX) Cryptocurrency Overview

Blockchain-based smart contracts platforms are becoming key players in the digital industry. Many users have come to appreciate the tremendous opportunities that smart contracts bring to the financial services sector through DeFi projects. Today, financial products that are independent of centralised organisations have already become the norm. The main goal of modernising the financial system with distributed ledger technology is to speed up transactions between users.

Money needs to get from sender to recipient as quickly as possible, but traditional blockchain ecosystems do not yet have enough bandwidth. The startup Avalanche is taking on the challenge. Avalanche offers a new consensus protocol that can be used to run DeFi products with high transaction speeds. In this review, we’re going to talk about the resources and capabilities of the Avalanche cryptocurrency project. Let’s try to figure out if it can compete with Ethereum and become a basic platform to expand the deFi sector.

What is Avalanche (AVAX)?

Avalanche can be classified as “Blockchain 3.0”. It is a heterogeneous network of multiple blockchains. Implementing a new consensus protocol, it allows transactions through the system in seconds, guaranteeing the same level of security as in traditional blockchain ecosystems.

Avalanchi becomes an umbrella that protects defi-projects from attackers. Developers have access to a set of tools for launching and deploying decentralised networks identical to those found in Ethereum, while making all financial transactions much faster.

Features of Avalanche (AVAX)

The Avalanche platform consists of three main components: two blockchains (C-Chain and P-Chain) and a directed acyclic graph (DAG) known as X-chain. The DAG structure differs from the traditional blockchain structure, in which transactions are recorded in chronological order. Instead, a DAG links transactions together and users do not have to wait for them to be merged into a blockchain.

P-chain is the platform chain. It is responsible for blocking betting tokens and implementing the consensus protocol. All transaction fees are paid to AVAX.

The Avalanche Contract Chain (C-Chain) allows developers to easily port applications built on Ethereum using the C-Chain API. All current Ethereum applications can switch to Avalanche to take advantage of higher bandwidth, faster refinement, extremely low gas rates and reliable tools.

The exchange chain (X-Chain) is a decentralised platform that allows new assets to be created, exchanged and tokenised between subnets, using the Avalanche Virtual Machine (AVM). X-Chain allows anyone to create or mint digital assets such as Stablecoins, Utility tokens, NFTs, shares, etc. etc. The system, is based on UTXO, which is familiar to anyone working with Bitcoin, Litecoin, Bitcoin Cash and other blockchains on SHA-256 and Scrypt algorithms.

All three components are verified and protected by primary network validators. Avalanche aims to become the ‘internet of finance’ of which subnets are a critical component. Anyone can create individual networks with configurable virtual machines (VMs) and validator rule sets. Any virtual machines such as BTC Script, EVM, WASM are allowed. Avalanche sub-networks can be configured for a specific jurisdiction, allowing the use of regulatory compliant assets.

One of the main benefits of the Snow consensus protocols group is that they are 51% protected against attack. At least 80% of Avalanche nodes must collude to break consensus.

Stakes in Avalanche are completely independent of consensus. Unlike Ethereum and similar platforms, staked assets cannot be taken away from validators, which encourages broader participation. The betting is needed to protect the network from a Sybil attack. For transactions on the Avalanche network, the fees paid in the native AVAX token are permanently burned rather than going to the balance of the validators. Thus, as the number of transactions increases and larger amounts are transferred, the available supply of coins decreases to benefit the ecosystem.

The amount of commission is set by the function being validated, not by the issuer of the transaction. Simple transactions have the lowest fees; higher fees are set for other uses of Avalanche, such as the creation of sub-networks. Individual subnets can issue their own coins, but AVAX tokens are required to set up a subnet.

History of the Avalanche (AVAX) network and team

The Avalanche network and AVAX token were created by Ava Labs in 2020. The developers used the new Snowflake consensus algorithm published by the anonymous blockchain engineering group Team Rocket in May 2018. Ava Labs was founded by Cornell University professor Emin Gun Sirer, Cornell University computer science doctoral student Kevin Seknitz and blockchain entrepreneur Maofan Ted Yin.

Emin Gyun Sirer is known as an active member of the cryptocurrency movement. After studying Satoshi Nakamoto’s cryptocurrency, he discovered one of bitcoin’s biggest flaws, known as ‘selfish mining’, and helped come up with a solution. Gun Sirer is also known for his work on bitcoin storage, as well as scaling solutions such as Bitcoin-NG.

The Avalanche founder also earned a reputation in the Ethereum community for his research on exploits in DAO. He later founded bloXroute Labs, a team of crypto-researchers and software developers focused on solving the blockchain scalability problem.

Avalanche (AVAX) mining capability

The AVAX cryptocurrency is used for stacking, payment of fees, and also provides a basic unit of account between the multiple subnets that can be created on Avalanche. PoW – no mining is provided.

AVAX has a maximum issuance of 720 million tokens, of which 360 million have been put into circulation in genesis. The speed at which new coins are created depends on the amount of AVAX used for stacking. Of the total volume of tokens, half will be allocated to validators as a reward for betting. The yield is estimated between 7-12% in the first year. The default betting value is 2000 AVAX and the minimum time for a node to place a bet is 14 days. AVAX cryptocurrency staking is supported by cryptocurrency exchange Binance.

Validators must freeze AVAX tokens in order to participate in the maintenance of the network. The remuneration received by nodes depends on the amount bet and the time from the start of the node and the average daily uptime. If you have less than 2000 AVAX tokens, you can delegate the bid (minimum 25 coins) to another user and they will pay out a share of the earnings.

Where to buy Avalanche (AVAX) cryptocurrency, available exchanges

You can find Avalanche (AVAX) on several top crypto platforms. The best one is the Binance exchange, which supports six exchange pairs:

AVAX/USDT;
AVAX/TRY;
AVAX/BTC;
AVAX/BUSD;
AVAX/EUR;
AVAX/BNB.

The coin is traded on Binance, OKEx, Huobi Global and Bitfinex. A full list of platforms and exchange pairs, as well as the current Avalanche (AVAX) exchange rate, is available at https://www.coingecko.com/ru/Криптовалюты/avalanche#markets.

Avalanche (AVAX) Wallets

You can create a new web wallet in the Wallet section of the project’s official website, the link is https://wallet.avax.network/. Click Generate New Wallet, save 24 words and store in a safe place. Login to the web wallet interface is available on the same page. The AVAX cryptocurrency is supported by the physical Ledger wallet.

Outlook for Avalanche (AVAX)

So far, Avalanche is outperforming Ethereum and defi projects can easily migrate to this platform. However, they are in no hurry to do so and are waiting for the launch of Ethereum 2.0. So the success of AVAX largely depends on whether Vitalik Buterin’s team’s transition to PoS will be successful or, conversely, unsuccessful. Although serious problems with Ethereum could cause panic in the market and then investors will not want to invest in the cryptocurrency.

Avalanche could be seen as a safety net for the transition to Ethereum 2.0, and what happens next is hard to say. Perhaps the project will occupy a niche in the deficit sector and be an alternative to Ethereum.

Conclusion

The Avalanche protocol provides a fundamental level of consensus for developers. Its high transaction speed, scalability and support for other DeFi platforms give it an advantage over its competitors. The blockchain industry continues its expansion into the global financial system and full adoption of cryptocurrency settlement is inevitable.

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