Avalanche (AVAX) is a renowned blockchain and cryptocurrency, presenting a competitive alternative to Ethereum (ETH). AVAX is the designated cryptocurrency for the Avalanche blockchain, serving as the primary utility token for smart contracts and project implementations. The AVAX C-Chain is compatible with the Ethereum Virtual Machine (EVM), enabling the utilization of Ethereum-based smart contracts and facilitating diverse DApps from the Ethereum ecosystem.

AVAX stands out for DeFi users seeking cutting-edge and user-friendly features among Layer-1 platforms, surpassing Ethereum in certain aspects. Its compatibility with EVM has significantly contributed to expanding its community. Avalanche employs a proof-of-stake (PoS) consensus mechanism, empowering users to create layer 1 and layer 2 blockchains, referred to as subnetworks or subnets. By staking AVAX tokens, various projects can transform into validators, further enhancing the platform's versatility.

What is the operational mechanism of Avalanche?

Avalanche, introduced in 2020 by Ava Labs, is backed by a team of exceptional professionals in computer science, economics, finance, and law. The team, originating from renowned companies such as Google, Microsoft, Morgan Stanley, and Consensys, operates from New York City and Miami. Led by founder and CEO Emin Gün Sirer, formerly an associate professor at Cornell University, the company's COO is Kevin Sekniqi, and John Wu serves as President.

With a remarkable team, an enthusiastic community, and unwavering dedication, Avalanche aspires to become the fastest blockchain globally. This blockchain platform stands as a formidable competitor, driven by its multi-chain architecture consisting of X-chain, C-chain, and P-chain. These three blockchains are secured and validated by the Primary Network, a distinctive subnet comprising validators responsible for validating multiple blockchains. To join the Primary Network, custom subnets must stake a minimum of 2000 AVAX tokens.

The adoption of three blockchains aligns with Avalanche's mission to achieve unparalleled speed within the industry. By distributing data and responsibilities across the three blockchains instead of burdening a single blockchain like other cryptocurrency platforms, Avalanche ensures optimal performance and agility. The three blockchain components managing these characteristics are as follows:

X-chain:

Exchange chain (X-chain), referred to as the X-chain, functions as the core component managing transactions and the generation of diverse Avalanche assets. Transactions conducted on the X-chain contribute to the accumulation of fees in AVAX, analogous to the gas fees in ETH on the Ethereum platform. Consequently, transactions are consistently processed using AVAX, regardless of the token utilized for fee payment.

C-Chain:

A standout attribute of this platform is its capacity to serve as a development environment for decentralized applications, also known as smart contracts. This particular characteristic appeals to developers seeking to harness the platform's security and flexibility for building decentralized applications.

Furthermore, the C-chain seamlessly integrates with the Ethereum Virtual Machine, enabling effortless deployment of Ethereum smart contracts on Avalanche. This functionality empowers the community to access a comprehensive range of features while utilizing the familiar Ethereum developer tools. Additionally, Avalanche's compatibility with Ethereum facilitates the attraction of substantial liquidity from Ethereum's DeFi protocols. Notably, the total value locked on Ethereum witnessed a 5.3X growth since the beginning of 2021, while Avalanche's growth skyrocketed by a staggering 2200X.

P-Chain:

The Avalanche platform chain enables individuals to develop and deploy both L1 and L2 blockchains. Additionally, if necessary, the platform provides assistance in creating a collection of such blockchains, referred to as Avalanche subnets, as previously mentioned. Among these subnets, the P-chain serves as the default subnet, serving as the foundational blockchain for all others.

The P-chain assumes the crucial role of overseeing and synchronizing all the subnets by staying synchronized with the validators. It operates on the Snowman consensus protocol, which is a chain-optimized consensus protocol designed for high throughput, complete ordering, and optimal performance for smart contracts. This protocol is backed by the Avalanche consensus protocol.

Ways to purchase AVAX:

AVAX tokens are readily available for purchase on major cryptocurrency exchanges that support trading pairs involving the token. To acquire AVAX, simply locate a suitable exchange platform, create an online account, and either purchase or link your wallet to store the tokens. It is highly recommended to safeguard your tokens by storing them in either a hardware or software wallet, as currencies are more susceptible to hacking than wallets themselves.

Once your wallet connection is successfully established, proceed to the next step of acquiring the token. Placing an order is straightforward, as you have the option to choose between a market order or a limit order. With a market order, you can purchase the token at prevailing market rates, while a limit order allows you to specify a desired price for the tokens. A limit order can be canceled at any time prior to its completion.

Where can AVAX be purchased from?

While only a limited number of hardware wallets offer support for AVAX, investors using the Ledger Live platform can download applications to securely store AVAX and other currencies.

The AVAX wallet stands out as the preferred choice for AVAX holders, being the native token of the company. Additionally, Binance and Coinbase provide services for buying and selling AVAX tokens, offering various advantages and ensuring secure transactions. Interested users can also explore these platforms to acquire AVAX tokens.

Count of available Avalanche projects:

The platform has witnessed the launch of more than 370 projects, with the number continuing to increase, establishing them as a formidable contender in the industry. Furthermore, the company has allocated a substantial sum of 200 million dollars to support DeFi and NFT projects through the Blizzard fund. Building on this success, an additional fund of 180 million dollars has been created to assist developers seeking investment for their projects.

What constitutes the Avalanche ecosystem?

The Avalanche Ecosystem encompasses a diverse range of fields within DeFi, housing a total of 58 applications categorized under the DeFi section. These applications consist of both homegrown solutions and existing platforms operating on the network.

Among the notable projects within the ecosystem is Benqi (QI), recognized as a decentralized lending protocol and non-custodial borrowing system. Benqi offers users a comprehensive banking system experience, enabling lending and borrowing of digital assets with interest. It eliminates various operational restrictions related to virtual machines.

Trader Joe (JOE) serves as a comprehensive decentralized trading platform on Avalanche, catering to the needs of traders. It has gained significant popularity and currently holds a Total Value Locked (TVL) of 1.13 billion dollars. Trader Joe has expanded its services to include lending through Banker Joe, positioning itself as a potential end-to-end DeFi provider in the future.

Unlike Pangolin, Trader Joe follows a more traditional tokenomics model. Out of the income generated, 40% is allocated to the developer team and treasury, while 10% is reserved for strategic investors. The remaining rewards are distributed among JOE token holders, who share the trading fees.

Benefits:

The performance of Avalanche in the charts aligns with the optimistic growth projections and elevated valuations attributed to it within the blockchain community. The founders of the company identified a distinctive structure within the network that effectively addresses common blockchain challenges. Here are some of the advantages offered by the Avalanche ecosystem:

1. Compatibility

Among the limited number of existing blockchains, including Bitcoin, only a few enable seamless and secure exchange of multiple cryptocurrencies and data with other platforms. Avalanche stands out as one of these exceptional platforms, offering users a convenient and secure means of sharing information.

2. Flexibility

With its inherent flexibility and remarkable processing capabilities, the Avalanche platform excels in managing substantial transactional volumes.

3. Ease of use

Avalanche has garnered a significant user base, primarily attributed to its user-friendly application feature. This platform has established itself as an efficient and high-speed contender, positioning it in direct competition with the Ethereum community.

Avalanche was created to rival Ethereum and cater to DeFi and GameFi users with its array of popular services. Despite Ethereum's larger scale due to its longer operating time, Avalanche is quickly catching up and the competition is intriguing. Our technical analysis and price prediction on Avalanche is worth checking out.

AVAX supporters contend that it has surpassed Ethereum with its scaling abilities, boasting a high transaction throughput and short time-to-finality. Additionally, Avalanche's low gas fees of $0.20 make it more appealing to first-time DeFi users in comparison to Ethereum's fees, which can exceed $20. As a result, Avalanche has seen an increase in userbase and transactions. However, Ethereum is a well-established blockchain platform with a significant development community and loyal userbase. The DeFi space as we know it today was formed by pioneering DApps like Uniswap, Aave, and Compound, all built on Ethereum. With Ethereum layer-2 scaling solutions like Arbitrum, Optimism, and ZKSync, it remains to be seen whether competitors like Avalanche will be displaced or if they will coexist in a multi-chain world.