Speed, security, Scalability and decentralization are the fundamental requirements for an Ideal block chain. Nevertheless, in the race for the top amongst cryptocurrency platforms for smart contracts and decentralized applications, the majority of blockchains have failed to meet these essential features a good blockchain should have.
This Post Contains
- What Is Avalanche?
- Brief History Of Avalanche Blockchain.
- How Avalanche Network Works.
- Avalanche (AVAX) Tokenomics.
- AVAX Coin Statistics.
Ethereum revolutionized the cryptocurrency industry and its use of smart contracts, decentralized applications and the DeFi industry as a whole. However, its Scalability and transaction fee issues (For the most part) meant that cryptocurrency investors and organizations would have to look elsewhere for an alternative to the Ethereum network.
This has paved the way for different cryptocurrency projects to launch their own blockchains that are suitable for decentralized finance.
Avalanche network is one of these blockchains that have since launched in the cryptocurrency space and done enough to convince users that the platform is good enough to compete at the top of the DeFi industry.
What Is Avalanche Network?
Avalanche is an open-source Proof of Stake blockchain, designed with the aim of solving the blockchain trilemma of scalability, security and decentralization. Along with its smart contract functionality, Avalanche is a platform for autonomous blockchain deployments and decentralized applications, hoping to rival Ethereum and become the leading blockchain in the future.
Known for its scalability, speed and low transaction fees, the blockchain platform is a Layer 1 blockchain that claims to be the fastest smart contracts platform in the blockchain industry (due to its sub-second finality).
The Avalanche blockchain has a different approach compared to other blockchains, it consists of three individual blockchains: the X-Chain, C-Chain and P-Chain. With each of them having its functionality.
Brief History Of Avalanche Blockchain
Launched in 2020 by Ava Labs, A Pseudonymous group known as Team Rocket first released the whitepaper for the Avalanche network in 2018. However, a group of Cornell University computer science and software engineering researchers, led by Professor Emin Gün Sirer [ who was assisted by Kevin Sekniqi and Maofan “Ted” Yin, his students] launched the Avalanche network in 2020.
Related: What Is Polkadot Network?
How Avalanche Network Works
Compared to the Ethereum network’s 15 transactions per second, the Avalanche network can handle 6,500 transactions per second and scale to millions of users. This is due to the Avalanche network’s structure of three individual blockchains: the Exchange chain (X-Chain), Contract chain (C-Chain) and Platform chain (P-Chain).
Avalanche is also making attempts to make their blockchain interoperable with the Ethereum blockchain. So that its EVM compatibility can allow decentralized applications on the Ethereum blockchain to integrate with the Avalanche network.
Here’s an analysis of the Avalanche blockchain’s Architecture.
- Individual blockchains design: The Avalanche network consists of three sub-chains, each with its functions and purpose.
- Platform Chain (P-Chain): The Platform Chain (P-Chain) coordinates network validators, tracks active subnets and enables the creation of new subnets. Each Subnet consists of validators who work together to validate a blockchain or blockchains.
The P-Chain uses the Snowman consensus mechanism.
- Exchange Chain X-Chain: The Exchange Chain (X-Chain) is used for creating and trading native tokens on the Avalanche network. AVAX (The Avalanche network’s governance token) is native to this chain.
The X-Chain uses the Avalanche consensus mechanism.
- Contract Chain C-Chain: The Contract Chain C-Chain is used for the creation of smart contracts and decentralized applications. The Avalanche Virtual Machine is native to this chain. The C-Chain is also used by developers to integrate decentralized applications on the Ethereum blockchain to the Avalanche network.
The C-Chain uses the Snowman consensus mechanism.
- Consensus Mechanism: The Avalanche network operates a Proof of Stake consensus mechanism, this means that AVAX holders who stake their coins are the ones allowed to be validators on the Avalanche network.
Validators are required to stake a minimum of 2000 AVAX tokens before they can become validators.
In addition, Validators are selected based on how large their stake is and how actively they participate as validators. Therefore, AVAX holders with the most stakes and who are actively involved as validators, are more likely to be chosen to validate new blocks.
Avalanche (AVAX) Tokenomics
AVAX is the currency or medium of exchange of the Avalanche ecosystem. Due to Avalanche blockchain’s Proof of Stake consensus model, AVAX is the token that is used to Stake so that nodes can validate transactions.
AVAX is also used to pay transaction fees and reward validators for their efforts.
- AVAX Coin Statistics
Current Price: $88.85
All Time High: $146.22
All Time Low: $2.79
Market Cap: $23,741,995,330
Total Supply: 395,891,290
Circulating Supply: 267,229,027
Max Supply: 720,000,000
Decentralization, sub-second finality, low transaction fees and scalability are the key strengths of the Avalanche network.
Avalanche is also one of the few scalable, secure and fast blockchains that have true decentralization in their structure.
Therefore, Avalanche is a good blockchain for both Cryptocurrency Investors and Developers.