What is Avalanche (AVAX)? Find out everything about the project in this article. Legithustlin shows you the most important basics and predictions about AVAX and where you can buy the coin.
Although Avalanche was only launched in 2020 by the Ava Labs team, the network has already made a name for itself and has risen to the top 50 cryptocurrencies and most popular altcoins within a very short time.
This success is driven not least by a passionate community and dedicated developers to develop the fastest blockchain in the world.
In addition to the speed, Avalanche could emerge as a true driver of innovation, actively solving current problems such as environmental aspects and high blockchain transaction fees.
What is Avalanche (AVAX)?
In 2019, Avalanche’s main network (AVAX) was developed as a platform for smart contracts by Ava Labs and aims to enable users and developers to set up decentralized applications (dApps) and subnets.
Avalanche launched its mainnet in September 2020, just two months after raising $42 million in a token sale that sold out in less than five hours. (Source: Avalanche)
The founding team behind Ava Labs consists of 3 experienced people: Emin Gün Sirer, Kevin Sekniqi and Moafan Yin. All 3 are considered extremely talented when it comes to the field of computer science and have been dealing with decentralized networks for a long time.
Avalanche’s stated goal is to be the fastest smart contract platform in the blockchain industry, based on its time to complete a transaction – and at favorable terms and with environmentally friendly processes.
We digitize all assets in the world. (Source: Ava Labs)
According to Avalanche, the network is the first to enable transactions in less than a second.
According to Ava Labs, the Avalanche network can process over 4,500 transactions per second (about 2x more than Visa). Compared to Ethereum with around 13 transactions per second, this is a clear advantage that supports AVAX in its growth.
Avalanche’s blockchain uses a Proof-of-Stake (PoS) consensus, in which validators check the transactions in the network and thus guarantee the operation and security of the system. In return for making your AVAX tokens available, validators receive an annual return of up to 11%.
Users who do not want to validate their transactions actively can delegate this task to validators and thus also generate around 9% return per year.
Read Also: What is Proof of Stake (PoS)?
Avalanche (AVAX) is often compared with the second largest cryptocurrency Ethereum, as both use smart contract functions to enable decentralized financial services.
Avalanche wants to enable faster transactions at lower fees (compared to Ethereum ) and decentralized trading in assets that every user in the network can use.
What is unique here is the network’s fast transaction speed and the barrier-free access to various asset classes within one platform.
Developers can create different blockchains and digital representations of various asset categories (e.g. compliance regulations) and enable trading with them.
The AVAX token is used as a native token by Avalanche to enable internal payments and as an incentive for users to use the coin in the network.
The maximum number of AVAX tokens is 720 million. The distribution of the tokens is regulated according to an emission curve in the white paper.
If you would like to find out more about how the blockchain works, the consensus mechanism behind it or the AVAX token, you can find this information in Avalanche’s English-language white papers.
How Avalanche works: From DeFi to NFTs
Avalanche (AVAX) is a kind of umbrella platform that uses 3 different blockchains to revolutionize the future of financial services.
Instead of having all tasks run on a single blockchain, Avalanche relies on 3 different blockchains, each geared towards a single task.
The tasks of the 3 blockchains are subdivided as follows:
- Exchange-Chain (X-Chain): This blockchain is responsible for creating and trading avalanche assets. The fees generated by transactions on the X-Chain can be paid with AVAX tokens.
- Contract-Chain (C-Chain): Using this blockchain, developers can create new, decentralized applications on Avalanche and at the same time use the advantages of the network. Above all, the security and scalability of the platform make it particularly attractive for developers. The C-Chain executes smart contracts for Avalanche and is compatible with the Ethereum Virtual Machine (EVM).
- Platform-Chain (P-Chain): Developers can use P-Chain to create their own Layer 1 or Layer 2 blockchain and even to group them. It is, therefore, possible to develop sub-networks (subnets) that are managed by the P-chain and are also responsible for the validation of transactions.
The subnets mentioned in the P-chain can be created by the network users as required to increase the scalability depending on the requirements. Due to the unlimited capacity to create subnets, Avalanche theoretically has no TPS limit.
Even though subnets can use their own modes of operation and rules, all networks must validate their blockchain with the primary Avalanche network – which is only possible if more than 2,000 AVAX tokens are used in staking.
Avalanche DeFi Top 3 Applications
In addition to a large number of projects and possible applications, three main application examples of Avalanche have emerged.
As with other blockchains that work with the Proof-of-Stake (PoS) protocol, the application areas are very similar.
For developers who want to use Avalanche, for example, creating user-defined tokens (NFTs) plays an important role. As the hype surrounding digital collectibles has grown in importance, this can be seen as the main application.
The development of your blockchain networks (or subnets) is also an important application of the Avalanche blockchain. The breakneck transaction speeds are a decisive advantage for developers and users in order to offer decentralized financial services.
The third area of application is the creation of your dApps using the Solidity programming language. These decentralized apps can perform different tasks, such as granting peer-to-peer loans. Here, private individuals can grant each other loans, which seems particularly attractive due to the low fees.
It is even possible to develop blockchain-based games with the help of Avalanche and use AVAX tokens as a payment service for an additional gaming experience.
Avalanche for institutions
Avalanche claims to offer the best verifiable platform in the blockchain world for institutions, companies, and governments.
Developers can create their applications and subnets and have complete control over the addition of their own compliance guidelines, data security and other individual rules.
Thus, Avalanche enables, for example, the issuance of own assets and their trading and debt financing, digital proof of identity, and document validation.
The best-known examples of this are the Congress of Quintana Roo, the first local congress in Latin America to use blockchain technology to certify legal documents for greater transparency digitally. The second application is Ryval – an exchange for litigation financing.
Avalanche NFT: Collectibles at a glance
Avalanche also has a lot in store for non-fungible tokens (NFTs) lovers. Avalanche offers the possibility to create your own digital collectibles in just a few seconds – and for fees of less than a cent.
As with other platforms that offer NFTs, with the help of Avalanche, proof of ownership can be provided digitally, and art, collectibles, references or certifications can be shared indefinitely.
The two most common applications that fall back on the Avalanche network are Polyient, a kind of investment platform for decentralized games, which offers digital player cards from well-known professionals from the sports world.
Avalanche (AVAX) ecosystem: Bridge, Explorer and Wallet
The Avalanche ecosystem now consists of more than 160 different applications that deal with a variety of financial services.
To better understand the handling and the ecosystem of AVAX, we show you how the 3 most essential tools in the Avalanche blockchain work. This includes, for example, the storage of the AVEX coins and the connection of the blockchain using a bridge.
Avalanche Wallet: Keep AVAX Coin safe
The Avalanche Wallet is a secure and easy-to-use depot for storing Avalanche assets – similar to a wallet.
AVAX tokens can also be stored on third-party wallets such as Ledger Nano X, but the easiest option is to use Avalanche’s in-house wallet.
The Avalanche web wallet can be used easily after creating a user account and shows you all of the assets you have saved in the wallet with just a few clicks.
Avalanche Bridge: Multi-chain support
The Avalanche Bridge was developed to enable a fast, cheap, and secure transfer of assets between Ethereum and Avalanche.
By using the aforementioned C-chain, all ERC20 tokens can be transferred from Ethereum to Avalanche and vice versa.
Avalanche Explorer for Coins
Using Avalanche Explorer, users and developers of the blockchain can search for individual transactions and blocks and obtain detailed information about them.
Users can also search for individual validators or user addresses and wallets in the network. The search for subnets is also possible via the Explorer to understand the Avalanche system’s activities.
It is important to note that only X-Chain and P-Chain transactions are available via Explorer. This information can also be viewed in the C-Chain, but only via the separate Snowtrace Explorer.
Avalanche Prediction: price targets for the AVAX Coin
The year 2021 was an extremely strong year for the AVAX-Coin and many other cryptocurrencies. Due to the increasing awareness of cryptocurrencies and their media presence, the interest of investors and users has grown significantly.
Especially concerning Avalanche, one can say that the platform has made a name for itself and has a steadily growing number of members in the community.
This is also reflected in the price development of the AVAX coin. Looking at the year 2021, AVAX increased its value by around 700% in just one year. This represents a significant increase even in cryptocurrencies and is particularly pleasing to investors.
In November, Ava Labs announced a partnership with well-known consulting firm Deloitte, which increased the price by 33% in 7 days. However, a few weeks later, this was put into perspective again by a consolidation phase.
This new partnership aims to improve the speed, accuracy, and security of the Federal Emergency Management Agency (FEMA) funding.
In addition, Deloitte wants to use the avalanche blockchain to build more efficient platforms for disaster relief.
Although there is currently a lot of hype about the Avalanche project, it is important to weigh the risks of cryptocurrencies carefully.
Above all, the high volatility in the market and the rapidly changing developments and news must be taken into account here. It is challenging to make reliable predictions for Avalanche and other cryptocurrencies.
At this point, it is not yet possible to say exactly which technology and blockchain will win the race in the crypto universe. The tide can turn extremely quickly when you think back to companies like AOL or Napster.
However, the fact is that Avalanche, like its competitors Polkadot and Solana, could benefit from the overloading of the Ethereum blockchain. In the crypto universe, speed and user-friendliness play a decisive role, which could help AVAX to exceed a value of 500 US dollars in the next 5 years.
How to Buy Avalanche: Invest in the AVAX Coin
Avalanche is already available at a large number of exchanges and brokers, which makes buying and trading AVAX particularly easy.
However, we at LegitHustlin can well understand that it is difficult to find your way around, especially as a newbie.
Therefore, we would like to introduce you to a few of the most important and well-known exchanges for buying AVAX:
Libertex: CFDs can be traded through this broker. He is one of the oldest crypto brokers and is fully regulated. In addition to a large selection of different cryptocurrencies, Libertex offers to make payments with SEPA, PayPal, Giropay, and instant transfers.
Kraken: Founded in 2011, this is a global Bitcoin exchange based in the USA. The stock exchange is one of the world’s largest trading volumes and liquidity.
Binance: In terms of trading volume, Binance is currently the largest crypto exchange in the world. It was originally founded in China and is currently administered from Malta. Over 150 cryptocurrencies can be traded here.
If you want to buy and trade AVAX tokens directly and quickly, Libertex offers you what we believe to be the best options. To buy the popular cryptocurrency, you can create a user account on Libertex and get started right away after verification.
Conclusion: Avalanche as a competitor to Ethereum and Co.
As mentioned before, Avalanche scores particularly well when it comes to speed. The possibility of linking any number of sidechains offers developers and users enormous advantages.
Since Avalanche is about speed and environmental friendliness, the project is characterized by innovative approaches, especially today.
The partnership with Deloitte helps Avalanche establish its blockchain and increases awareness of the project. Since the auditing company is a household name among institutional investors, this combination could bring a breakthrough for Avalanche.
However, it should be noted that Ethereum currently wants to increase its blockchain’s scalability and security with its ETH2 upgrade planned for 2022.
Solana and Polkadot’s competitors are not sleeping either and want to make the world of cryptocurrencies easier and faster with new technologies and strong partnerships.
We look forward to the heated race for the speed of blockchains and keep you up to date on the latest developments on our channels.
Frequently asked questions and FAQ
This section provides answers to the most important questions about Avalanche (AVAX).
What is Avalanche (AVAX)?
Avalanche (AVAX) is a smart contract platform with three different blockchains and enables the creation of subnets. Avalanche aims to use a PoS consensus to make trading in decentralized assets faster and at the same time keep fees down. In addition, developers can mint their own NFTs and offer them for sale or swap.
How is Avalanche different from Solana or Ethereum?
Avalanche has the advantage of using 3 blockchains, each with different tasks. Due to the possibility of creating many practically popular subnets, there are hardly any limits to scalability and speed with Avalanche. This makes the network significantly faster and more capable of growth than Ethereum and Solana.
Can I also exchange AVAX tokens with other cryptocurrencies?
You can use the bridge to exchange your AVAX tokens for other ERC20 tokens and vice versa at any time. All you have to do is connect your wallet to the bridge, and you can change your coins immediately.