What Is the Avalanche Ecosystem (AVAX)?

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Here is another blockchain platform that supports smart contracts. It was launched in 2020 under the name of Avalanche (AVAX). Its founder, the Ava Labs team, has declared ambitious goals of boosting transaction speed, lowering costs, and achieving complete eco-friendliness. 

The mission of Avalanche is to deliver a scalable blockchain that supports security and decentralization at all levels. Due to its long-term strategies, the project has entered the top ten with its Total Value Locked (TVL) in the protocol which has grown rapidly and now is worth about $3 billion. 

Avalanche has a professional team supported by enthusiastic backers and vast community. This article provides more detail on Avalanche and its performance.

What Is Avalanche About?

Avalanche is a well-known platform in the blockchain industry that is also promoted by the ICOholder. It is capable of securing its performance due to any valid proof-of-stake protocol.

Blockchains are becoming more and more popular nowadays. The first blockchain appeared as Bitcoin in 2009, and the idea was continued in Ethereum and other cryptocurrencies. At present, the blockchains with bitcoin are rather problematic because they utilize the PoW (Proof of Work) consensus. The latter makes all transactions rather slow and expensive. Moreover, PoW chains’ validation is an obstacle to decentralization, so blockchains here require more extensive solutions.

At the very beginning of Bitcoin’s existence, these limitations were not dramatic. However, due to the present-day’s development of blockchains, NTF usage, and the demand for decentralized finance, the limited capacity of Bitcoin becomes more obvious.

About 100 million users of cryptocurrencies were reported at the beginning of 2021. That is why DFi apps have risen, and their value is more than $100 billion now. This rapid growth led to network congestion and even outages. Such smart-contract blockchains as Solana or Ethereum are mostly affected by those issues. Ethereum even introduced the Layer 2 protocol solution into its performance. It allows for moving transactions from the main chain, rolling them further in bundles, and sending those bundles back to Ethereum. Does it make transactions faster and more convenient? Supposedly, yes, to some extent. However, it adds more layers of complexity, so security is another problem to deal with.

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It is obvious that preserving all transactions within the Layer 1 protocol is the most appropriate solution. Such a protocol is more decentralized and secure. So, the idea of keeping this Layer one as the main solution has become the ground for Avalanche. Its developers aimed at creating the fastest smart-contract platform for blockchains, and they succeeded. The basis of this development is using three different blockchains within one system. The further progress of Avalanche has proven that it is the right idea for the future when crypto becomes the core worldwide technology. 

The scale of the Avalanche mainnet is impressive. Today, it involves the community supported by the ecosystem fund of $230 million, and it continues to grow.

The main idea of Avalanche’s founder, Dr. Emin Gun Sirer, was to gain the fastest time-to-finality performance that is beneficial for blockchain transactions. Time-to-finality means how long a crypto transaction is processed until it becomes irreversible. The purpose is to ensure that such a transaction can never be altered or rolled back, meaning that it is final.

In fact, this finality is an outstanding feature of any blockchain. However, the time-to-finality settings are not equal among various blockchains. For example, Ethereum can reach finality in one minute. Avalanche, surprisingly, can do it in one second, so it is almost instant. That is likely to make it the fastest blockchain on the globe. To prove that, let’s have a look at how Avalanche works.

How Does Avalanche Perform?The most innovative feature of Avalanche is that it consists of three blockchains. The reason for it is that every blockchain performs a specific function integrated into a broader ecosystem. There is not one chain for all the tasks which helps keep the entire platform agile. Security, scalability, and decentralization, which are the main features of any blockchain system, are guaranteed.

Now, let’s have a more thorough look at each blockchain within this system.

X-Chain or Exchange Chain

X-Chain is responsible for developing and transferring assets. The main Avalanche’s token is AVAX, and it is the most usable currency on the platform. The two other tokens – PNG and JOE – are used for exchange, and they are decentralized. X-Chain generates all the fees paid in AVAX, so every transaction completed in JOE or PNG is always settled in AVAX.

C-Chain or Contract Chain

The key feature Avalanche was created for is its smart contracts. Developers can make up decentralized apps here considering the benefits provided by scalability and security on the platform.

C-Chain is compatible with Ethereum Virtual Machine or EVM. It means that everyone can make Ethereum smart contracts by using Avalanche. Actually, all existing Ethereum apps, for instance, DeFi Titans Aave, can develop a product version here. It gives developers access to all the cutting-edge features by using the same tools they can utilize for Ethereum.

P-Chain or Platform Chain

This blockchain allows developers to create any blockchain by using Level One or Level Two protocols. They can even utilize the combination of them. Such blockchains are called subnets while P-Chain is the basis for them all.

P-Chain can keep track of all validators and, therefore, manage all the Avalanche’s subnets. On the other hand, these subnets can validate P-Chain.

Subnets make up a key feature for Avalanche scaling. They work similarly to sharding of Ethereum 2.0. In fact, they are clones of such a default blockchain in Avalanche as the Primary Network. The latter is connected to the launched platform. 

It is possible to develop numerous subnets because each of them can create multiple others. It allows P-Chain to complete about 4,500 transactions per second. This capacity is twice as high as that of Visa. However, unlike Visa, Avalanche does not have any limits for TPS.

AWAX Token


Now, it’s high time to explain what the basic AWAX token is. It is a utility token serving as a common exchange medium for the entire ecosystem. AWAX can be used as currency on Avalanche, and its staking can secure the network. 

Moreover, it helps stakers receive more AVAX tokens. They are used to pay fees for transactions, so the circulating amount of AVAX is constantly lowering.

Actually, AVAX is the default currency of the network. It can also be used as the common currency for transactions between subnets. It provides interoperability and prevents spending internal subnet cryptocurrencies on any types of transactions.

Final Thoughts

As you can see, Avalanche is a cutting-edge blockchain platform for smart contracts with amazing new features. It is a breakthrough in the development of blockchains and cryptocurrencies.

The main uses of Avalanche involve creating blockchain networks or subnets and generating custom tokens. Developers prefer this platform because of its capacity to be leveraged for extended use of DeFi protocols, NFTs, games, and a lot of other variants and options. The transaction speed, eco-friendliness, and low costs account for the growth of Avalanche’s popularity and its further prospects.

Lewis R. Anderton is a specialist in applying mathematical and statistical methods to financial management and risk management issues. 

His job is to ensure that you always make a profit.

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