Avalanche is a new blockchain project that was launched in 2020 as an open-source platform where decentralized finance (DeFi) applications can be launched. It also serves to offer enterprise blockchain deployments in a single ecosystem that is inherently scalable and interoperable.
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Avalanche is the first blockchain project that can confirm transactions in less than a second. It also supports the overall toolkit that is used by Ethereum, and it also allows for millions of validators to participate in the network as block producers.
|Technologies||X-Chain, C-Chain, P-Chain, Directed Acyclic Graph (DAG), Snowflake|
|Market Capitalisation||$19.3 Billion|
|Consensus Mechanism||Avalanche Consensus Mechanism, Snowman Consensus Mechanism|
|Founders/Authors||Initially shared by “Team Rocket” and later developed by a team of researchers from Cornell University, and launched by Ava Labs|
|Launch Date||September 2020|
|Circulating Supply of Coins||220,286,577|
|Maximum Coin Supply||720,000,000 AVAX|
|Is Avalanche a Stablecoin?||No|
|Does Avalanche have a burn rate?||Yes, all fees on Avalanche are burned as transactions are carried out|
|Does Avalanche have a Whitepaper?||Yes, the whitepaper can be found here|
Evolution and Development of Avalanche
The concept around the Avalanche platform became known in 2018 when a pseudonymous group called “Team Rocket” shared the fundamentals of the protocol on the InterPlanetary File System, also known as IPFS.
The protocol was adopted and developed by researchers from Cornell University. A professor of computer science and a software engineer, Emin Gün Sirer oversaw the project. While developing the project, Moafan “Ted” Yin and Kevin Sekniqi assisted him.
After Avalanche’s initial research stage, a start-up technology company was established to develop the right blockchain network that could meet the ever-changing needs surrounding complex finance industry requirements.
In March 2020, the AVA codebase for the protocol was made open-source and was introduced to the public, with an initial coin offering (ICO) ending in July of the same year. The Avalanche mainnet was launched in September, and the native token for the platform, AVAX, was launched.
What makes Avalanche unique?
Unlike other decentralized networks, Avalanche has a proprietary consensus protocol that uses a novel approach to achieve strong safety guarantees while it simultaneously achieves lightning-fast finality as well as high throughput. All this is done without compromising the overall decentralization.
Most blockchain networks tend to force terms and conditions across the entire system, but Avalanche instead empowers participants to create powerful and reliable applications as well as customized blockchain networks.
These have complex rulesets, and they can also be built across either private or public networks in a way that their unique needs and objectives can be met. Avalanche has an extremely high transaction output of up to 6,500 transactions per second without risking scalability.
This can easily be achieved by the unique architecture that Avalanche has, consisting of the following unique technologies:
- X-Chain or the Exchange Chain can facilitate the creation and exchange of AVAX coins in addition to all other asses. It works in the same way as the ERC-20 standard of Ethereum, and the tokens on the X-Chain are bound to standardized rules using the Avalanche consensus mechanism.
- C-Chain or the Contract Chain is where smart contracts are hosted and where DApps can be created and launched through the Avalanche Virtual Machine, which is like Ethereum’s Virtual Machine. This allows for developers to fork DApps that are originally compatible with EVM. This layer uses the Snowman Consensus Mechanism.
- P-Chain or the Platform Chain is the level that is responsible for coordinating validators in addition to tracking the active subnets and enabling the creation of additional subnets, which are groups of validators. Every subnet on this level can perform validation across several blockchains. However, a blockchain can only be validated by a single subnet.
- Avalanche Consensus Mechanism is based on a random sampling of the network using a metastable mechanism.
- Snowman Consensus Mechanism refers to a consensus protocol that is chain-optimized and has a high throughput, and is powered by the Avalanche Consensus Protocol.
What are the main uses for Avalanche?
Avalanche is an open-source platform and protocol that is used by developers to build and launch DApps and DeFi applications in addition to newly formed interoperable blockchains. Avalanche features an interoperable network that allows developers to build either permissionless or permissioned blockchains easily.
Developers can do this by either creating new blockchains or by importing existing blockchains from elsewhere. The Avalanche network contains the necessary Virtual Machines that support a wide range of blockchains, including EVM, WASM, BTC Script, and several more.
The main purpose of Avalanche’s native token AVAX is as follows:
- The transfer of value by sending AVAX from one peer to another on the network and to AVAX-compatible wallets.
- As an incentive for validators who secure the network and validate transactions.
- To pay fees for activities that are carried out on the network.
- Securing the network when validators stake their tokens.
- Creating new subnets using AVAX in the process
One of the main things is that AVAX offers high utility across several enterprises, including the consumer space. Avalanche has extremely fast processing times, which will make it ideal for use as a medium of exchange, in addition to having close links to stablecoins.
What is the future potential for Avalanche?
Avalanche has significant potential in the blockchain-dominant world in addition to the DeFi world. Avalanche has exceptionally high transaction security and speeds, combined with high scalability and so much more.
With Avalanche, developers can build low-cost, fast, Solidity-compatible DApps and launch customized blockchains. In addition to this, Avalanche can scale to millions of validators without the need for robust hardware.
In addition, Avalanche is the perfect payment platform because of the fast transaction speed and the number of transactions that it can process per second. Avalanche offers a customizable, interoperable platform that welcomes all developers and offers some of the best solutions that can push the adoption of DeFi apps across industries to new heights.
Avalanche is busy creating what is known as the “Internet of Finance,” which offers the ideal platform where DeFi applications can be built and where the conventional finance market, and the derivatives market, can meet regulatory compliance.
Price analysis on Avalanche
Avalanche was initially launched in September 2020, and its price analysis over the past year is indicated as follows:
|2020||2021 to date|
|AVAX Price High||$4.71||$55.3|
|AVAX Price Low||$2.92||$3.66|
Price prediction on Avalanche
Avalanche launched its mainnet in September 2020, and since then, the project has already secured more than 200 projects. The total value of AVAX that has been burnt in transaction fees totals $14 million, and there are more than 1,000 block-offering validators on the network, in addition to more than 600 active community members that are based around the world.
AVAX is currently traded across several majorr cryptocurrency exchange trading platforms, including Binance, OKEx, Huobi Global, ZT, and CoinTiger.
Avalanche is a popular blockchain project, and analysts expect a bullish rally for the coin in the next few weeks, where AVAX will exceed its resistance level to land on a bullish price. The long-term prediction for AVAX is bullish, and the price is expected to reach $76 by the end of 2023.
The price prediction for AVAX is at least $150 by the end of $2022, $200 by the end of 2023, and up to $450 by the end of 2025, which bodes well for investors who expect a positive return on investment.
If investors continue to actively invest in AVAX, analysts expect that the cryptocurrency could reach a price of $100 by the end of the year if it can break past psychological resistance.
Which wallets are the best option for storing Avalanche?
Simply defined, an Avalanche wallet is a piece of software where users store the necessary data to access their Avalanche (AVAX) funds. This data contains a private key, which is like a password, and a wallet address, also known as a public key, which acts as an account number would.
In terms of the types of Avalanche wallets, users can distinguish between the following:
- Cold Wallets – which are offline wallets that store funds in an application that is not connected to the internet.
- Hot Wallets, which are online applications that require an internet connection.
- Physical wallets are unique pieces of hardware like USB devices that keep crypto funds offline.
- Web wallets are web browser ad-on wallets.
- Desktop wallets – which are applications that allow users to manage their finds on macOS, Microsoft Windows, or Linux.
- Paper wallets which is a piece of paper with a code or QR code on them. To access the assets, the user enters the key or scans the code to access their account.
The best Avalanche wallets currently are:
- Ledger Nano X and the Avalanche Wallet
- Native Avalanche Web Wallet
- Coin98 Mobile wallet and Browser Extension
1. Ledger Nano X and the Avalanche Wallet
Ledger Nano X is one of the best hardware wallets in the industry that can easily work with third-party software such as the native Avalanche web-based wallet. Ledger Nano X works through Ledger Live software, and it can be used across several devices.
Ledger Nano X is compatible with more than 1,500 different cryptocurrencies, and the platform also provides users with the ability to buy, sell, exchange, and stake different cryptocurrencies.
2. Native Avalanche Web Wallet
The Avalanche Web-based wallet is critically acclaimed as one of the best wallets for AVAX on the market. The web wallet allows users to store their AVAX, carry out transactions, and stake their coins on the platform to earn passive income through rewards.
In addition, the Avalanche web wallet is well-known for its robust and innovative security measures that ensure that all funds are kept safe.
MetaMask is an extremely popular cryptocurrency wallet that is available as a browser extension wallet that can be used on iOS and Android mobile devices. While MetaMask was initially designed to be an Ethereum-only wallet, it can easily be configured to receive, send, and manage AVAX C in addition to accessing various DApps featured on the Avalanche blockchain.
4. Coin98 Mobile wallet and Browser Extension
This wallet can be used as a Google Chrome extension for Android as well as iOS devices to manage the AVAX C chain as well as AVAX X tokens. The mobile version of this wallet easily supports the use of AVAX chains, and it can also be used as an integrated DApp browser.
This is one of the best wallets that can be used for a wide range of cryptocurrencies, including AVAX, BTC, ETH, ERC-20 tokens, NEO and NEP5-based tokens, TRON, and several others. The Mathwallet is universal, which makes it usable across all devices, including desktop, hardware, extension, and others.
Mathwallet also has the unique feature associated with cross-chain token exchanges and innovative multi-chain DApp store, and the benefit that it can operate nodes for the PoS Avalanche chain, allowing users to stake their AVAX.
Where can you buy Avalanche?
You can buy, sell, and exchange AVAX through these exchanges:
Launched in 2017, Kucoin is a Hong Kong-based is an online cryptocurrency exchange trading platform where users can exchange a wide range of cryptocurrencies. The platform is available across the web and mobile devices, and users are provided with competitive rates and fees, advanced trading tools, 24/7 customer support, and useful educational resources.
|Intuitive multi-device trading platforms offered||Unregulated|
|A wide range of coins offered||US clients are not accepted due to regulatory issues|
|24/7 customer support provided|
|Allows for the exchange of crypto-to-crypto|
|Educational tools are provided|
Based in Singapore, Huobi Global is a well-established and popular cryptocurrency exchange that has been in operation since 2013. Huobi is one of few exchanges that charge a spread, and that offers leveraged trading of cryptocurrencies.
There are more than 234 cryptocurrencies that can be exchanged across this platform, and the exchange offers its services to users from over 130 worldwide countries. Huobi is a liquid exchange that sees daily trading volumes that easily exceed $9 billion.
|Access to several intuitive trading platforms||Unregulated|
|An ultra-low minimum deposit||Only offers crypto-to-crypto trading|
|A decent selection of educational materials is offered||US clients are not accepted|
|Access to 24/7 customer support|
|Access to a range of tradable cryptocurrencies|
OKEx was launched in 2014, and in the past 7 years, the exchange has made a decent name for itself. Apart from offering a vast range of tradable coins, OKEx is also known for its variable and tight spreads and leverage facility of up to 1:100.
OKEx has millions of users, and it offers some of the best trading environments for users from more than 100 countries worldwide. OKEx offers hundreds of tokens that can be exchanged through innovative trading software using a range of trading strategies.
|Advanced trading platforms offered||Unregulated|
|Trading tools are provided||US clients are not accepted|
|Access granted to a range of educational materials|
|24/7 dedicated customer support offered|
|Range of coins offered that can be traded|
Gate.io is one of the most innovative and secure cryptocurrency exchange trading platforms in the industry that offers a wide range of tradable cryptocurrencies. Gate.io offers an innovative desktop and mobile trading platform through which trades can be executed.
Gate.io also offers spot and leveraged trading using leverage ratios of up to 1:3. Gate.io also offers a range of advanced trading tools, offline wallet technology, a lending function, and robust security measures.
|Advanced trading tools offered||Unregulated|
|Robust security measures||Limited funding options|
|Strict verification procedures are in place|
|Offers a range of crypto assets|
|Provides several different ways through which crypto can be exchanged including spot and margin trading|
Established in 2016, Crypto.com is a well-known Hong Kong-based cryptocurrency exchange that is well-known for its competitive fees as well as its leveraged trading options. Crypto.com has more than 10 million users, and it offers the purchase and sale of a wide range of different assets.
|A powerful proprietary trading platform is offered||Unregulated|
|24/7 customer support provided||Limited funding options|
|Offers more than 100 crypto coins|
|Educational resources are provided|
|Offers leveraged trading|
Does Avalanche use coin burns?
Yes, Avalanche burns tokens.
Avalanche burns AVAX tokens that are used in transactions. When AVAX is burnt, it reduces the supply, and it increases the overall scarcity of AVAX.
Coin burning in cryptocurrencies means that some of the coins of native crypto or another currency are sent to a public address from which those coins cannot be spent because the private keys of the address cannot be obtained.
The function that coin burns serve are:
- To make new tokens or coins through Proof of burn
- To reward the token or coin holders
- To destroy unsold tokens or coins after an Initial Coin Offering (ICO) or a token sale.
The importance of and the reason why coin burns are necessary are as follows:
- Long-term adherence – coin burns encourage long-term commitment and the time of the project. This enables greater price stability for coins, especially considering investors who do not want to sell or spend their Ethereum.
- It protects against spam – the coin burn mechanism naturally safeguards against Distributed Denial of Service Attack (DDOS), preventing spam transactions from clogging the network.
If the amount of AVAX that is burned should exceed the amount that is minted during the staking processes, it will subsequently create deflationary circumstances. Unlike the EIP 1559 Proposal associated with Ethereum, all fees are burnt instead of only a part. In addition, AVAX has a limited supply as opposed to the unlimited supply of Ethereum.
The burning of AVAX is a public record and can be viewed here. As of November, over 350,000 AVAX has been burnt since the launch of Avalanche’s mainnet in September 2020.
Are there criticisms against Avalanche?
Yes, there are some criticisms against Avalanche:
- The Avalanche protocol is new, and it has been met with a substantial amount of scepticism. This surrounds the fact that most upstart networks have not yet been built out and that promised improvements on protocols such as Avalanche is still based on the theory that is yet to be proven.
- According to experts, Snowball cannot reach binary consensus as fast as the developers of Avalanche claims. It was merely designed for a certain use later in the protocol, and it does not yet work efficiently beyond its initial purpose. Snowball is not immune to attacks, and it could stall with the presence of 17% of malicious actors.
- With Avalanche, transactions can be assembled into DAG, and Snowball can then be used for every set of transactions. While this makes Avalanche extremely attractive, the overall infrastructure could lead to the rejection of transactions.
- In February 2023, the Avalanche network experienced high levels of network congestion which triggered a “non-deterministic bug.” However, during this, no funds were at risk.
- Vee Finance, a DeFi platform that was built and launched on the Avalanche blockchain, suffered a hack where $35 million in Bitcoin and Ethereum was stolen.
What is Avalanche’s largest Competitor?
Polkadot is the largest competitor of Avalanche.
Polkadot is a well-known heterogeneous blockchain protocol that can connect different blockchains into a single network which achieves some of the highest levels of scalability. Polkadot achieves this by using innovative sharding technology where several blockchains run parallel to one another, also known as parachains.
All these parachains are connected through a Relay Chain, and this allows for developers to easily build and launch a wide range of custom DApps by using the Substrate development network. The Relay chain is used to validate the state transition of all the parachains that are connected.
This allows for an overall shared state that is spread across the entire ecosystem. The validity of the overall system allows for it to be incorruptible. Polkadot is capable of 1,500 transactions per second as opposed to Avalanche’s 6,500, and Polkadot’s technology limits the number of parachains connected to the Relay Chain, with the hope that the platform can soon allow for up to 100 connections.
On the other hand, Avalanche does not have the same issue, and there can be an infinite number of subnets that can be created on the network. Polkadot has over 1,000 validators in its relay chain, which is further divided into smaller numbers because there are validators on every Parachain.
Avalanche’s consensus allows it to scale up to tens of thousands of nodes, potentially up to millions soon, with the benefit that the more validators there are, the faster the network becomes.
Polkadot uses a Hybrid consensus protocol with finality being reached within 60 seconds while Avalanche reaches finality within 3 seconds with an average of one second, with transactions completely irreversible and immutable.
Polkadot was launched in 2016, and there are over 70 projects featured on the platform. Avalanche was launched in 2020, and there are over 200 projects on the platform, making Avalanche the more popular platform for DApp development.
In terms of market cap and popularity, Polkadot has a market capitalization of over $40 billion, and it is #8 on the altcoin list, while Avalanche has a market cap of over $19.3 billion and it is #13, which shows that both projects are popular and have an extremely high potential for further development.
What is the Staking Process involved with Avalanche?
Avalanche uses a Proof-of-Stake (PoS) consensus mechanism to achieve network security instead of using a Proof-of-Work (PoS) like many other cryptocurrencies such as Bitcoin, Litecoin, and Ethereum.
Participating in a PoW consensus mechanism involves extremely high computational requirements which use a significant amount of energy. However, Avalanche has a revolutionary mechanism that can scale to accommodate millions of validators who actively participate in transaction verification.
Users who stake their AVAX coins can earn rewards of between 9.69% and up to 11.54% depending on the staking period, with a minimum of 14 days and a maximum of up to a year.
Avalanche does not have slashing that penalizes validators, but there is a requirement that validators maintain at least 60% uptime to make them eligible for staking rewards. If validators cannot achieve this, they will not be slashed; they will simply not receive any rewards for staking coins.
The minimum amount of AVAX required to become a validator is 2,000 AVAX, which could decrease as the coin appreciates. Another option is that validators may charge a fee to allow users to delegate their stake, which will inevitably reduce running costs.
Another consideration is that the circulating supply of AVAX is reduced because of staking. Avalanche uses a PoS, which means that a large supply of AVAX is subsequently locked. Unlike other staking platforms, Avalanche encourages users to lock their coins for extended periods so that they can earn more rewards.
There is currently over $14 billion worth of AVAX locked in staking, and there is a staking ratio of up to 60%, which further limits the available supply that can be sold. According to the simple principles associated with supply and demand, as the supply falls and the demand remains the same or increases, Avalanche is set to increase.
What can Avalanche smart contracts do?
A smart contract can simply be defined as a program that runs on the Solana platform and ecosystem. Smart contracts consist of a collection of codes, which are its functions, and data, which is its state, that all reside at a specific address on the Solana blockchain.
Smart contracts are not controlled by the user. They are deployed to the network and subsequently run as they were programmed.
Smart contracts can define certain rules, like any typical contract, and these rules are automatically enforced through the code. Smart contracts cannot be deleted, and the interactions with them are irreversible.
In terms of necessity, smart contracts are important because they help to solve the issue associated with mistrust between different parties as well as business partners.
Smart contracts have several advantages for many industries, and they can reduce unnecessary costs as well as time expenditure while simultaneously enhancing transparency.
Smart Contracts can be used across several industries, including:
- Mortgage Contracts
- Digital Identity
- Financial Data Recording
- Supply Chain Management
- Protecting Copyright Content
- Insurance, and many others.
Avalanche is a powerful and versatile platform where developers can run smart contracts through different technologically advanced platforms, including MetaMask and Remix. The primary network of Avalanche consists of three different chains, namely P-Chain, X-Chain, and C-Chain.
Smart contracts on Avalanche is run on the C-Chain, which is the same as the Ethereum Virtual Machine. The C-Chain on Avalanche is powered by the Snowman consensus protocol, and the C-Chain RPC can perform anything that an Ethereum client can because it uses similar RPC calls.
The immediate benefit that developers have when they use Avalanche instead of Ethereum include the same benefits of using Avalanche overall, including faster transaction speeds, infinite scalability and decentralization, increased security, and so on.
The properties associated with Avalanche improve the overall DApp performance as well as the user experience, which is why Avalanche has become so popular in such a short time. The process of launching smart contracts on Avalanche is extremely simple, and it involves:
- Setting up Metamask
- Funding the C-Chain Address
- Connecting Metamask and deploying a smart contract using Remix
Can blockchains be hacked? Has Avalanche ever experienced any hacks?
Yes, Blockchains can be hacked. However, Avalanche’s blockchain has never experienced any hacks. However, in saying this, a DeFi application that was built on Avalanche, Vee Finance, was hacked. This does not relate to Avalanche’s blockchain, and neither does it mean that Avalanche’s security has ever been compromised.
Blockchain technology allows users to record transactions on a distributed ledger, which consists of a distributed network of computers.
The servers are secure, and the transactions that are carried out are permanent, making the verification thereof easier. While blockchain technology can have several uses, it is currently being used by cryptocurrencies.
Whether a blockchain can be hacked will inevitably depend on each cryptocurrency project and the security measures that are in place.
Blockchains can be susceptible to the following common attacks:
- 51% Attacks – where a malicious entity can gain control over more than half of the mining process. This could allow them to create an additional version of the blockchain, also known as a fork, where some transactions may not reflect. This allows the attacker to designate the additional blockchain as the true version, allowing them to double-spend cryptocurrency.
- Creation bugs and errors – which refers to security glitches, errors, and vulnerabilities when a blockchain is created. Attackers consistently try to discover and exploit vulnerabilities that exist in the blockchain. Smart contracts are often a point of attack because of possible bugs in the code.
- Insufficient Security – There have been countless hacks on cryptocurrency exchanges, especially those who keep client funds in hot, online wallets. Blockchains and exchanges must ensure that there are enough measures in place and users are urged to take control of their fund security.
Is Avalanche a Good Investment?
Yes, Avalanche is a good investment.
Avalanche has incredible potential to become a store of value based on its unique technology and the fact that it can be applied in real-world applications. Avalanche is a good investment according to the following factors:
- Utility – Avalanche has a limited supply which provides it with the scarcity that will make it a good investment option. However, this is not enough for a coin to be a good store of value, and demand is another factor that must be considered. Avalanche offers a wide range of uses in the enterprise and consumer space, which means that there is a high demand for AVAX, making it an ideal store of value long-term.
- Payment – Avalanche has a transaction capacity of 6,500 transactions per second with sub-second finality. Avalanche can also comfortably accommodate millions of validators that will only speed up transactions. This makes Avalanche a perfect payment network that can cater to payments in AVAX as well as other cryptocurrencies, including stablecoins.
- Transaction fees – Avalanche was created with a wide variety of financial markets in mind. Avalanche has native support and allows for digital smart assets to be created and traded. These financial assets can represent anything from debt, equities, bonds, and anything else. The transaction fees on Avalanche are burnt, removing these from supply and resulting in all users benefiting.
- Technology – Avalanche has three separate blockchains that each serve a unique purpose and provide Avalanche with advanced versatility and infinite potential for development and growth.
- Subnets and blockchain creation – Avalanche is one of the best platforms where thousands of subnets form a heterogeneous interoperable network of several blockchains, and while other blockchains achieve this, Avalanche has revolutionary consensus mechanisms that allow it to offer a secure, truly decentralized, trustless, and interoperable framework that complies with the necessary regulation. Avalanche also caters to the development of public and private blockchains on its platform.
- Enterprise Adoption – With the unique technology that Avalanche offers for private and public blockchains to be created on its platform, companies can easily develop and use Avalanche’s technology to create proprietary private blockchains that can be used, boosting enterprise adoption.
- Supply – There is a limited supply of AVAX, and with transaction fees being removed and AVAX being removed from circulation, the supply of AVAX is set to decrease while demand will increase as adoption spreads, which means that Avalanche will become scarce.
- Staking – Avalanche uses PoS, and this provides users with an additional way to secure passive income when they stake their AVAX to receive rewards of between 9.69% and up to 11.54%.
What is the supply and distribution of Avalanche?
Avalanche has a limited supply of 720,000,000 AVAX.
- Fixed or maximum supply can be defined as the total number of coins that can ever be in circulation.
- Total Supply refers to the number of coins that have been mined, including the missing coins that are no longer in circulation or that have been lost.
- Circulating supply refers to the total number of coins that are in circulation.
In terms of the effects that Unlimited/Limited Supply has on coins, the following can be considered.
- In terms of Unlimited Supply, cryptocurrency coins are inflationary, which means that the coins will inevitably lose value as supply increases, with demand decreasing as a result.
- Cryptocurrencies that have a limited supply are deflationary, which means that the coins that are in circulation will gain value over time as demand surpasses supply.
The token distribution of Avalanche is as follows:
- Staking Rewards (50%) with 360 million AVAX minted at launch and the other half being kept for staking rewards that will be paid to validators, set to release over decades.
- Seed Sale (2.5%) where AVAX was sold for $0.33 per token with an investment schedule of 10% of the allocation, which was released when the mainnet was launched, with plans to release 22.5% every three months in the past year.
- Private Sale (3.5%) where AVAX was sold for $0.5 per coin.
- Public Sale Option A1, where 1% of AVAX coins were sold at $0.5.
- Public Sale Option A2, where 8.3% of AVAX coins were sold at $0.5 per coin.
- Public Sale Option B, where 0.67% of AVAX coins were sold at $0.85 per coin.
- Foundation (9.26%) – this amount is kept for building initiatives in the ecosystem, and it also includes marketing, incentive programs, and more. This part has a 10-year vesting period.
- Community and development endowment (7%) with tokens allocated to groups as well as individuals who are involved with the development of tools and infrastructure on the platform.
- Testnet Incentive Program (0.27%), where AVAX coins were given to participants that validated in the different incentivized testnet programs before the mainnet of Avalanche was launched.
- Strategic Partners (5%)
- Airdrop (2.5%)
- Team (10%)
Is Avalanche a viable Alternative Coin?
Yes, Avalanche is one of the best alternative coins in terms of the following factors:
- Traceability – Avalanche transactions can be viewed on a block explorer without divulging the information of individual users, such as identity, location, and so on.
- Hacking – Avalanche has never experienced a direct attack on its network or blockchain.
- Security – Avalanche is infinitely scalable and extremely decentralized, which means that there are high levels of security. In addition, because Avalanche can allow the scalability of millions of validators, this will make the network more secure as well.
- Transaction speed – Avalanche can process up to 6,500 transactions per second, with validation being reached in less than a second.
- Technology – Avalanche uses innovative technology that works seamlessly, and that has several real-world applications.
- Price Stability – The price of AVAX has increased significantly since its launch in September, and while the cryptocurrency market is inherently volatile, the price on Avalanche is set to appreciate in weeks, months, and years to come.
- Potential Investment – Avalanche is a great potential store of value based on its use case, technology, coin distribution and supply, and other components.
- Popularity – Avalanche is a popular alternative coin that ranks quite high on the list of Altcoins, especially considering that there are more than 13,000 and Avalanche currently ranks #13 according to its market capitalization.
- Future Uses – Avalanche offers endless potential for future development and growth as Defi becomes more widespread.
What are the differences between Avalanche And Bitcoin?
Bitcoin is still the largest cryptocurrency in the world according to market capitalization, and while it is unlikely that any other coins will overtake it soon, Bitcoin is facing a lot of competition from projects such as Avalanche.
Bitcoin is the ultimate store of value as a cryptocurrency, and it is a reliable payment network that is seeing adoption for thousands of merchants worldwide. However, unlike Bitcoin, Avalanche has improved consensus that was specifically designed to ensure speedy transactions, scalability, and flexible implementation.
Bitcoin reaches finality in an hour, while Avalanche can reach it in less than a second. The production of Bitcoin’s blockchain involves two dozen mining pools as well as individual miners.
Avalanche, however, can easily accommodate millions of block producers without the value of the system being compromised. Bitcoin can comfortably handle seven transactions per second, while Avalanche can process up to 6,500 transactions a second, even faster than VISA, which can process up to 1,500 transactions per second.
Avalanche uses a PoS consensus mechanism that is more environmentally friendly than Bitcoin’s PoW, which is extremely detrimental to the environment. While Bitcoin remains the most popular store of value and medium of exchange in digital currencies, others like Avalanche are better options in many ways.
|Price change 20/21||+$400%||+2,500%|
|Market Cap||$1.1 Trillion+||$19.3B+|
|Past Hacks||None||DApp hack (Vee Finance)|
|Altcoin Rank||#1 – Original Crypto||#13|
What are the differences between Avalanche and Ethereum?
Compared to Ethereum, the largest alternative coin and overall second-largest cryptocurrency in the world, Avalanche shares a lot of similarities with the project, but there are also many improvements and differences between the two.
Ethereum uses a PoW, like Bitcoin, but it is busy with the process of transitioning to an eco-friendlier PoS when Ethereum 2.0 launches in 2023. The PoW consensus mechanism is one of the best ways for robust protocols to be established, but it tends to slow down network actions and confirmations to ensure overall network security and stability.
While Ethereum keeps using PoW, the network will struggle with scalability, high transaction fees, and immense network congestion. The PoS mechanism will help Ethereum, but it will cause increased complexity and execution risk of sharding.
Avalanche easily overcomes these challenges, and the protocols in Avalanche can easily achieve sub-second finality, with more than 6,500 transactions that are processed every second. In addition to this, Avalanche can scale up to millions of validators that will only speed up the network instead of slowing it down.
Applications on Avalanche do not need to compete for network resources because every project can have a proprietary blockchain that is validated by a custom set of validators. All subnetworks are still connected to Avalanche, but their relationships are not competitive but value-adding.
Avalanche also comfortably enables the launch of subsets where developers make the rules and can set the economics, allow participants, and ensure the security of the implementation. While Ethereum remains the most popular platform for DApp creation, projects such as Avalanche are becoming increasingly popular.
|Price change 20/21||+880%||+2,500%|
|Market Cap||$550 Billion+||$19.3B+|
|Past Hacks||None||DApp hack (Vee Finance)|
What are the differences between Avalanche and Dogecoin?
Dogecoin was created in 2013 as a joke following the hype that surrounded Bitcoin. However, despite this, Dogecoin has attracted the attention of enthusiasts from around the world, including Elon Musk, who is one of the largest supporters.
Dogecoin is a peer-to-peer cryptocurrency that can be used as a medium of exchange rather than a store of value. It is used to tip content creators on different social platforms, and it remains one of the popular cryptocurrencies because of the hype that surrounds it.
However, experts expect that the hype that surrounds Dogecoin will not always last, and it can plummet at any given time, which makes it one of the riskier investments. Avalanche has real-world value, and many metrics show that it is a store of value and an ideal medium for exchange because of its transaction speeds.
While Dogecoin can be mined, staking Avalanche can provide users with a generous return on investment and a passive income which will be much higher than the rewards gained from mining DOGE.
|Price change 20/21||+7,300%||+2,500%|
|Market Cap||$34.8 Billion+||$19.3B+|
|Past Hacks||None||DApp hack (Vee Finance)|
What are the differences between Avalanche and Neo?
Neo intends to be a rapidly growing and developing smart economy to establish the next generation of the internet, an economy where everything is digitized, from payments to identities and assets.
Neo is the first-ever blockchain that was launched in China, and it has a worldwide community that is actively involved in developing new infrastructures for adoption. Neo can be used to build and launch DApps and to run smart contracts, and while this is the same as Avalanche, both projects have different goals and objectives in the cryptocurrency space.
Avalanche is perfect as a payment network and medium of exchange because of its fast transaction speeds and quick validity. In addition to this, Avalanche is a good store of value because of its limited supply and overall adoption and popularity.
|Price change 20/21||+160%||+2,500%|
|Market Cap||$3.4 billion+||$19.3B+|
|Past Hacks||None||DApp hack (Vee Finance)|
What are the differences between Avalanche and NFTs?
Nonfungible tokens (NFTs) are digital assets that each have a unique value, with no two NFTs holding the same characteristics or value as another. Avalanche, on the other hand, is fungible, which means that one AVAX has the same value and characteristics as another AVAX.
What are the differences between Avalanche and Solana?
Solana is a unique project that offers faster and cheaper transactions, with the network comfortably handling up to 50,000 transactions per second compared to Avalanche’s 6,500, which makes Solana more ideal as a medium for exchange and a payment network.
Solana has become a mainstream option for many emerging financial companies, and new NFTs have been launching on Solana recently because the blockchain allows for the creation, development, and launch of different digital assets such as NFTs, in addition to DApps and DeFi applications.
While Avalanche is a strong contender against Solana, the latter has unprecedented performance, and it is more established as a smart contract and DApp platform, but not by a large margin.
Avalanche’s unique technology places it in direct competition with the likes of Solana, Ethereum, Cardano, and several other popular projects. Avalanche could become the project that takes down Ethereum while Solana has the potential of replacing VISA with its transaction capacity and proof of history consensus.
Avalanche is the first blockchain project that can successfully confirm transactions under a second, while Solana is the great contender that has the best transaction speeds and inherently low fees.
|Price change 20/21||+9,300%||+2,500%|
|Market Cap||$72 Billion+||$19.3B+|
|Past Hacks||None||DApp hack (Vee Finance)|
What are the differences between Avalanche and Cardano?
A notable difference between Avalanche and Cardano is the fact that the utility of Avalanche is far less than Cardano’s, which is one reason why it is less popular in the cryptocurrency space.
AVAX coins are cheaper than ADA, and transactions are much faster in terms of confirmation, but both projects have the same level of decentralization. While Avalanche is considered less trustworthy than Cardano, it does not mean that Avalanche is not highly secure.
Avalanche and Cardano both support smart contracts and allow for decentralized contracts to be linked to their native blockchains. They both support the development and launch of DeFi applications and DApps on their protocols.
Both projects are fully deployed and have full functionality with a significant amount of future potential as adoption becomes more widespread. Both projects aim to achieve the same, and each has its own supporters.
However, between the two, Avalanche is the better option for transactions because of its capacity to handle more and to ensure that validation is done in under a second.
|Price change 20/21||+2,100%||+2,500%|
|Market Cap||$69 Billion+||$19.3B+|
|Past Hacks||None||DApp hack (Vee Finance)|
What are the differences between Avalanche and Ripple?
One of the main differences between Avalanche and XRP is that Avalanche has faster transaction speeds and validation of under a second. XRP is a real-time settlement system, and the project was purely designed to be a global settlement system with the lowest transaction fees in the crypto space.
XRP serves as a trustless agent between parties in a transaction, and it was designed to replace payment processors such as SWIFT. While both Avalanche and XRP can be used as a medium of exchange, Avalanche has deeper functionality, and both projects serve different purposes.
Avalanche is the better option for the development and launch of DApps and DeFi apps, while XRP is the ideal replacement for conventional payment systems.
|Price change 20/21||+840%||+2,500%|
|Market Cap||$50 Billion+||$19.3B+|
|Past Hacks||None||DApp hack (Vee Finance)|
What are eco-friendly cryptocurrencies?
Eco-friendly cryptocurrencies relate to coins that have lower energy consumption. These coins typically use different consensus methods as opposed to the conventional Proof-of-Work, which requires higher computational power to allow for the mining of coins.
For cryptocurrencies to achieve overall adoption, developers are urged to find ways through which energy consumption can be decreased. The prospects and potential that cryptocurrencies must change the world of finance are immense, but not at the cost of the environment and non-renewable resources, which is one of the major reasons why adoption is slow.
Eco-friendly cryptocurrencies are like others, but they are more environmentally friendly and likely to attract the attention of ethical traders and investors.
The advantages of eco-friendly cryptocurrencies revolve around the reduced impact on the environment, attracting more investors, and widespread adoption of blockchain technology.
The disadvantage of eco-friendly cryptocurrencies is that while there is reduced impact on the environment, environmental impact cannot be eliminated, and not all developers will take the same stance on changing existing cryptocurrencies to become more eco-friendly.
What is the difference between regular cryptocurrency and eco-friendly cryptocurrency?
Eco-friendly cryptocurrencies use different technologies that make them more eco-friendly either by using renewable energy, energy-efficient protocols, or carbon footprint offsetting.
Regular cryptocurrencies such as Bitcoin, Dogecoin, Litecoin, and others that use PoW still require the use of computers for the network to be secured and to release coins into circulation, which consumes energy and will inevitably affect the environment.
Which DApps are compatible with Solidity?
Solidity is a high-level programming language that is object-orientated and primarily used by the Ethereum blockchain. It is one of the most popular programming languages that is used to write different smart contracts.
Some of the best solidity integrations include the following:
- Remix – a browser-based IDE which has an integrated compiler as well as a Solidity runtime environment that does not require any server-side components.
- IntelliJ IDEA plug-in
- Visual Studio Extension is a plugin that can be used by Microsoft Visual Studio.
- Atom Solium Linter
Several projects use Solidity to run smart contracts. These include:
- Ethereum Classic
- Binance Smart Chain (BSC)
- Hedera Hashgraph
Solidity allows these projects to create and run smart contracts on the protocol by using Turing completeness. This means that these smart contracts can run without intervention from third parties.
Solidity is the basis on which Tendermint was created, and it has become one of the most sophisticated consensus mechanisms that are based on the Byzantine Fault Tolerance (BFT).
What is the difference between Proof of Stake and Proof of Work?
- Proof of Stake
- Proof of Work
1. Proof of Stake
The simplest definition of Proof of Stake (PoS)is that it allows users to add blocks to a blockchain and verify transactions according to the number of coins that they hold on a blockchain. This means that users who hold more coins have more rights to validate/add blocks.
Proof of Stake was created as a more efficient solution than PoW because it addresses scalability, and it is more environmentally sustainable than the PoW protocol.
The necessity of PoS is for blockchains to validate a block and secure the network in a way that is more efficient and more environmentally friendly. PoS is the way forward for blockchains to gain more adoption without impacting the environment negatively.
The function of PoS relates to the protocol choosing validator nodes according to their proportion of stake. PoS also has a system where validators can be penalized if they show poor behavior.
Proof of Stake is less risky when considering the potential for attack from malicious entities because it structures compensation in such a way that attacks are less advantageous.
In terms of advantages, PoS has the following pros:
- It is more energy efficient
- It provides fast transaction processing
- It ensures lower transaction fees
- PoS does not require specialized equipment such as the case with PoW
The disadvantages of staking include:
- PoS is not as proven as PoW, where security is concerned.
- Validators that have large holdings could influence transaction verification negatively.
- Some PoS blockchains require that coins are staked for extended periods, and these coins cannot be used for the duration that they are locked up.
2. Proof of Work
Proof of Work is a consensus method and a system that requires a significant amount of effort and computational power to release new coins into circulation and to secure a blockchain network, effectively deterring frivolous or malicious use of computing power.
Bitcoin was the first cryptocurrency that used PoW, followed by several other cryptocurrencies that use the same basis to allow for fully decentralized and secure consensus. PoW is necessary to ensure that peer-to-peer transactions are carried out securely.
It is also used to validate blocks before they are added to the blockchain or distributed ledger where all transactions are arranged in sequential blocks, effectively resolving the issue of double-spending and deterring tampering.
The advantages of PoW are:
- It ensures an extremely high level of security.
- It provides true decentralization and ensures that transactions are verified
- It allows for cryptocurrency miners to earn block rewards when they solve the hash
The disadvantages associated with PoW relate to:
- Slow transaction speeds because of the complex process involved with transaction verification.
- Higher transaction fees because of the effort that is involved with verifying a transaction
- Extremely high energy consumption
- It is expensive to mine cryptocurrencies that rely on ASIC mining rigs
- It may not always be profitable because of the expenses involved with being able to mine coins such as Bitcoin