Global goal of the network Avalanche — scaling and rapid deployment projects on its own blockchain, while eliminating damage to the speed of work networks and its decentralization. Avalanche offers a truly unique product – it consists of three blockchains, several mechanisms consensus. And management platform happens with the help AVAX coin – official token. Some experts predict that Avalanche will outperform Ethereum by capitalization. Let us evaluate the reality of such judgments by considering the solutions blockchain Avalanche.
History of creation
Emin Gün Sirer and Kevin Sekniki founded Ava Labs in 2018. The project was based on the Karma coin, which appeared even before bitcoin, it was she who inspired the developers to create a cryptocurrency startup. Further, the non-profit organization Avalanche Foundation was launched to supervise the project.
The New York-based Ava Labs team launched the Avalanche test blockchain in the first half of 2020. The laboratory attracted large investments in the amount of 300 million dollars. This allowed for a token sale, which was divided into two parts – public and private. In total, 72 million coins were sold in a public way, which made it possible to raise $42 million in 4 hours. Financial need led to developers conducted several private tokensales in the amount of $242 million.
Then the main network was launched – Avalanche mainnet, its bandwidth at the time of launch was estimated at 4500 transactions per second. In the autumn of the same year, the coin was listed AVAX on the largest cryptocurrency exchange Binance. Crypto Exchange Adds AVAX to Major Stablecoins and AVAX Trading Pairs/BTC and AVAX/BNB. Then margin trading and derivatives were launched – today the coin is presented on many well-known exchanges.
Cryptocurrency Avalanche was created as an obvious competitor to the Ethereum coin, which will soon move from mining to proof of stake. Therefore, after the listing, the AVAX rate soared by 650%. It is worth noting the investors who contributed to the launch of the coin: Bitmain, Galaxy, Polychain and other participants in the cryptocurrency market. Today, the blockchain is operating in standard mode, and plans for the development of the project are scheduled for years to come.
That’s why AVAX – coinwhich solves three main problems – scalability, fees and compatibility.
Main characteristics and features
The most important parameters coins are:
- number of transactions – using subnets, the number of transactions per second tends to infinity (for example, throughput bitcoin is 7 transactions per second);
- transaction execution time – 2 seconds (polkadot considered a fast blockchain, but even there the execution time is 30 times higher);
- high energy efficiency – classic mining with ASIC or GPU is not available;
- the number of validators – there are thousands of validators in the network, which allows you to continuously improve the consensus mechanism;
- algorithm – proof-of-Stake;
- method of earning – staking.
The key feature of the system is that it consists of 3 compatible blockchains:
- X-Chain exchange chain – allows you to carry out transactions with AVAX coins and other assetsall commissions are paid in AVAX;
- chain of contracts C-Chain – allows developers create smart contracts for decentralized applications;
- P-Chain platform chain – accounting and creation of subnets, coordination of the work of validators.
The consensus mechanism is also unusual. There is no definite leader in the network, which allows increasing decentralization. The transaction is processed by a regular participant, after which his work is verified by a third party. For optimization, DAG technology is used, which allows checking transactions in parallel. The bottom line is that validators check other validators. Mathematics also states that several random checks allow you to determine the truth of the completed transaction.
Avalanche also has the following distinctive features:
- support for Ethereum blockchain tools – Solidity language and Ethereum Virtual Machine;
- incredible security and complete decentralization;
- due to the scalability of the blockchain, several thousand projects have already been launched;
- cross-chain transactions and NFTs.
Cryptocurrency AVAX – overview
AVAX is the internal token of the Avalanche system. A total of 720 million coins have been issued, of which only 270 million are circulating on the market, which is 38% of the total supply. The network has launched a mechanism for burning transaction fees, which means a deflationary path of development. The summary of the coin is as follows:
- the current value of the coin is $24;
- the maximum cost of ATH (All Time High) is $146;
- current rating — 14th place among all coins;
- capitalization of the asset – 6.7 billion dollars;
- the average trading volume per day is $500 million.
The AVAX coin is considered young, so the asset chart clearly follows the main crypto coins. Project updates affect the cost most actively, in such cases the price of the token may even go against the market. The token has three main uses:
- AVAX can be staked, become a validator, or delegate authority to another validator. The average validator yield is 10% per annum, and the income from delegation is set on an individual basis.
- AVAX is the main coin of all subnets and ensures interoperability.
- All network fees are paid in AVAX coin.
Becoming a network validator is quite simple – you will need a laptop or desktop computer. There are no special requirements for system performance. The main condition is sending 2000 AVAX coins for staking.
Potential investors often ask the question: AVAX – crypto with collateral? Token support is made up of the following factors:
- manufacturability and regular updates — the project is constantly being upgraded, its developers follow the roadmap;
- limited issue of coins – the issue is stopped and new coins cannot be issued, the deflationary mechanism implies continuous burning;
- a strong community, participants see real benefits from the project and constantly buy more AVAX coins – the token is really in demand on exchanges.
The coin was first introduced to the exchanges in September 2020. The initial price of the asset was approximately $4 per coin. The asset initially received strong support from exchange players, so even at the start the price did not fall below $2.8.
The first take-off occurred six months after the launch of the main network – the coin approached the $40 mark, which is 10 times higher than the original price. This happened due to the following events:
- listings on the OKCoin, KuCoin exchanges;
- release of FRAX (an algorithmic stablecoin) and the Avalanche Club accelerator;
- hard fork, which marked the burning of 50% of all commissions for transactions within the network.
Further listings, releases, updates and meetings proved the viability of the project – the price of the coin exceeded $140 exactly one year after the launch. After reaching ATH, the cost gradually began to decline.
A seven-fold drop does not mean the weakness of the project. The coin follows the global bearish trend that started in the cryptocurrency market. The spring of 2022 is marked by renewed US monetary policy and new global conflicts. The current price mark of 20-25 dollars is considered optimal for buying coins.
Buying and holding AVAX coin
Today, there are hundreds of ways that allow you to buy an AVAX token, borrow it from an exchange (margin trading), or purchase derivatives. Consider 4 main acquisition methods:
- centralized exchanges – the user creates a verified account (KYC), deposits dollars to the balance using a bank card, the largest exchanges are Binance, FTX, OKX and others;
- decentralized exchanges – free trade zones without KYC (SushiSwap, PancakeSwap and other swaps);
- exchange sites;
- services for buying crypto coins for fiat money from real people.
It is worth buying and trading coins only from a computer that has been checked for malware. It is better to purchase AVAX on a well-known exchange, and large amounts of coins should be immediately withdrawn from the exchange to a hardware wallet (Ledger, Trezor).
Next, consider the storage of AVAX coins. Hardware wallets are optimal, but it is advisable to store only a large amount of coins on them (from 100 and above). This does not mean that other wallets are bad or insecure. It is worth using only proven applications from this list:
- Avalanche Wallet is a convenient web-wallet that supports all network functions;
- MetaMask is a well-known wallet that is available as a browser extension or mobile application;
- Coin98 is a lightweight client that supports AVAX.
For beginners with a small amount of coins, any of the three applications will do. Advanced users can use the hardware wallet in conjunction with the Avalanche Wallet app.
Advantages and disadvantages of the project
First, let’s evaluate the strengths of Avalanche:
- the main competitor of Ethereum, surpassing it in terms of transaction speed and scalability (and containing its main tools for developers);
- thoughtful tokenomics and deflationary mechanism for burning commissions;
- high network performance and a strong community;
- unique blockchain and own wallet Avalanche Wallet;
- transparency of work and a large amount of information about the project in the network;
- blockchain is ideal to start DeFi-applications;
- the coin has found application in real life – launching landing pages and decentralized exchanges, banking and digital identification, collecting and art.
Coin Avalanche Overview disadvantages:
- the huge interest in Ethereum may offset the achievements of the project;
- high competition from Solana and other high-speed projects (given that Terra Luna can be considered a failure).
Network and Token Perspectives
The cost of the project has already increased by several thousand percent, but do not rush to buy. Investors recommend investing only those funds that will not affect your daily life. The price of a token can fluctuate greatly. Leaders and outsiders will appear among the new coins. However, the Avalanche network has shown its effectiveness.
After Ethereum leaves for the PoS algorithm, Avalanche can become a good alternative, because the project is able to duplicate the functions of Vitalik Buterin’s blockchain. Blockchain Avalanche entered the TOP-100 coins in less than a month, and such success may be repeated in the future. Analysts say that the fair price of AVAX coins by 2026 will be approximately $200.
The Avalanche network has already overtaken the Ethereum network more than once in terms of the number of transactions. However, few people mention the Solana and Polygon networks, which are not inferior in terms of manufacturability. After the transition to Ethereum 2.0, only one of the coins will be able to become its alternative. And it is far from certain that she will become Avax cryptocurrency review which has just been studied by you. The designated event is already scheduled for the end of 2022, so the wait is not long.
Now it is worth considering AVAX as an exchange instrument that shows significant volatility. Trade this coin is profitable on any segments, the main thing is not to be afraid of trading from a short in a bear market.
The materials presented in this section do not constitute individual investment advice.