Overview
Avalanche (AVAX) is an open-source platform that allows developers to create and publish decentralized apps in a massively scalable ecosystem.
What is Avalanche?
Avalanche is the first smart contract platform capable of completing transactions in less than a second, processing large volumes of transactions while keeping fees low. Its creators say that the technology can handle 4.500 transactions per second, with security levels much exceeding the industry benchmark of 51 percent. Even if close to 60 percent of the network is hostile, Avalanche will remain safe.
As Avalanche’s founder put it, the platform’s goal isn’t to become an “Ethereum killer” but instead to provide a safety net for Ethereum as it transitions to ETH 2.0. The Ethereum Virtual Machine (EVM) as well as the whole Ethereum development kit are also supported by the Avalanche network. Developers may migrate their Ethereum apps to Avalanche to test them with better throughput as well as faster execution, which is possible thanks to the Avalanche-Ethereum Bridge.
What is the Avalanche-Ethereum cross-chain bridge?
Avalanche-X is the accelerator of Avalanche. The Avalanche Network achieves excellent results thanks to the Avalanche Consensus System, a new Proof of Stake consensus protocol. The development of the Ethereum cross-chain bridge is one of Avalanche-X’s greatest achievements.
The Avalanche-Ethereum cross-chain bridge is a two-way token cross-chain bridge that can realize the smooth transmission of ERC-20 and ERC-721 between Avalanche and Ethereum. On the Avalanche network, Ethereum-based assets may be utilized with decentralized applications, and people can lock these commodities in cross-chain bridge contracts and produce comparable tokens.
Who is behind Avalanche?
Avalanche was developed by Ava Labs, a for-profit firm based in the United States. Professionals in economics, computer science, law, and finance, make up the Ava Labs team. The firm was created in 2018 by Mafan “Ted” Yin, Emin Gün Sirer, and Kevin Sekniqi.
Sirer is an associate professor of computer science at Cornell University as well as a famous computer scientist. He is credited with being the first to mint coins using the Proof of Work (PoW) method. Cornell University has ties to the company’s co-founders.
The COO of Ava Labs is Kevin Sekniqi. He graduated from Cornell University with a Ph.D. in Computer Science. Sekniqi formerly worked at Microsoft and NASA’s Jet Propulsion Laboratory as a software developer and researcher.
Yin Maofan worked at Ava Labs as the Chief Protocol Architect. Like Sekniqi, Yin holds a Ph.D. in computer science from Cornell University. When Yin was undergoing his graduate program, Sirer was one of his advisors.
Ava Labs has successfully attracted several institutional investors. In June 2019, the initiative received $6 million in a Series A investment round. Dragonfly Capital Partners, Bitmain, Galaxy Digital, NGC Ventures, and Initialized Capital sponsored a private token sale that garnered $20.2 million four months later. In November, Ava Labs conducted a public sale of up to 42 million AVAX tokens and raised $42 million.
What are AVAX tokens?
AVAX is the native token of Avalanche, and all transactions on Avalanche need to use AVAX to pay fees.
AVAX has a total supply of about 720 million coins, with 220 million currently in circulation. According to the token distribution the maximum proportion of 50% will be slowly released to the pledge validator. Another feature of AVAX tokens is that when users use AVAX when the handling fee is paid, the AVAX will be destroyed immediately, which also makes the AVAX token a deflationary model. According to Burned AVAX data, more than 440,000 AVAXs have been destroyed, and this mechanism will also allow the remaining tokens to be destroyed.
How does Avalanche (AVAX) work?
Unlike the Ethereum platform, each Avalanche application runs on its subnet, a coordinated set of validating nodes to reach consensus on the status of a blockchain set. Developers can make use of the resources to develop custom subnets. Using these developed subnets, apps don’t need to contend for network resources, as a result maintaining faster transactions as well as low rates on the Avalanche network.
The Avalanche Network achieves excellent results thanks to the Avalanche Consensus System, a new Proof of Stake consensus protocol combining the classic consensus protocol and the Nakamoto consensus protocol to ensure security, decentralization, and scalability. In this way, Avalanche solved the blockchain trilemma for the first time.
Snowflake, Avalanche, Slush, and Snowball consensus procedures are a family of four methods that complement each other and grow more secure in the process. In a nutshell, the Avalanche consensus protocol is a one-of-a-kind voting system based on “repeated random subsampling.” Validator nodes contact other validators at random throughout this process until the network reaches a consensus and determines whether to accept or decline new transactions.
All validators are members of the main network, which consists of three blockchains: the transaction chain (Chain X), the contract chain (Chain C), and the platform chain (Chain P).
- Transaction Chain (X-Chain)
The Avalanche assets are created and processed on the X-Chain blockchain. Avalanche’s native token AVAX is now one of the most well-known crypto assets on the network, but the decentralized exchange tokens JOE and PNG are just as popular, therefore PNG and JOE projects are also implemented in the Avalanche ecosystem.
The fees incurred by transactions on X-Chain are paid by AVAX. This cost is similar to the gas cost of Ethereum. But even if transferring any cryptocurrency within the Avalanche ecosystem, such as JOE, transaction fees are also settled by AVAX.
- Contract Chain (C-Chain)
Smart contracts are the most important function of Avalanche. Developers may use smart contracts to construct decentralized apps on Avalanche, taking advantage of the platform’s scalability and security. The Avalanche ecosystem may be grown and enhanced by adding additional apps in this way.
C-Chain is a smart contract system to be run with the Ethereum Virtual Machine (EVM) and operates on the Avalanche platform. Only Ethereum smart contracts can be deployed on Avalanche to create links to existing Ethereum applications. For example, DeFi giant Aave can now easily deploy any version of its product on the Avalanche ecosystem.
Developers may utilize C-Chain to build Ethereum smart contracts on Avalanche and access Avalanche’s features using the same Ethereum developer tools as before.
- P-Chain
Anyone may establish a Layer 1 as well as Layer 2 blockchain, or perhaps a collection of blockchains, using Avalanche’s P-Chain. Subnets are the blockchains that connect them, and P-chain is the link that connects them. P-Chain maintains the subnet by tracking the verifier, nevertheless, the subnet is also responsible for verifying the P-Chain to form mutual verification. These subnets are a critical component of the Avalanche ecosystem’s scalability. Avalanche’s subnet is similar to Ethereum 2.0 sharding.
Users can create subnets as needed. In practice, this means that once the expansion limit of one subnet is temporarily exhausted, this subnet can start another subnet to provide enough or more network traffic demand and release transactions.
Subnets can create other subnets infinitely, so this kind of creation is unlimited. Avalanche’s P-Chain has an upper limit of 4,500 transactions per second, which is about twice that of Visa. However, Avalanche does not have actual TPS restrictions because the capacity of its generated subnets is unlimited.
Advantages of Avalanche
The main advantage of Avalanche is that it eliminates the high transaction fees of Ethereum. Users are already struggling to maintain the high Ethereum network fees due to the continued popularity of DeFi. As the ETH price rises, even simple token swaps on Ethereum become prohibitively expensive for newbies, with even minor transactions costing 0.1 ETH. It costs 0.1 ETH to exchange tokens, which is too expensive. One disadvantage of Ethereum is the gas price. The sudden surge in Gas price may cause the transaction to fail, and may even cause users to lose hundreds of dollars worth of ETH without executing the transaction.
However, this is where Avalanche’s greatest advantage lies. The launch of the Avalanche-Ethereum cross-chain bridge has taken such a step to transfer the slow and expensive DeFi infrastructure on Ethereum to the faster and lower-cost Avalanche network.
What is an Avalanche Forecast?
The Avalanche ecosystem is vast, encompassing anything from NFT-based games to DeFi-focused projects. Polyient Games, SushiSwap, GameSwap, Pangolin, and more projects use the Avalanche ecosystem. Avalanche is still growing rapidly, as recent activity shows. At the time of writing this article, nearly 100 projects have joined the Avalanche ecosystem in the last 3 months.
However, there are certain issues, mainly the invalid casting error mentioned earlier. Although the Avalanche team was able to fix the issue within days, the vulnerability still casts doubt on the password authentication used by the Avalanche platform. The vulnerability occurred when network traffic increased after the release of Pangolin, which in turn led to a significant increase in the number of concurrently processed blocks, which demonstrated that Avalanche is a genuinely immutable platform, as developers are unable to reverse stapled bullets.
Businesses vs AVAX
Businesses are inclined towards AVAX payment integrations in the sale of the goods and services provided by them, especially for reasons such as speeds up to 4500 transactions per second, very low transaction fees, reliability, and popularity. In addition to that Avalanche aims to provide a secure and decentralized platform. The decentralization aspect can be attractive to businesses looking for transparent and tamper-resistant payment solutions.
To complement the advantages offered by AVAX, businesses may find it beneficial to leverage a robust payment gateway like Bitpace. By integrating AVAX with Bitpace’s payment gateway, businesses can bridge the gap between traditional finance and the blockchain world, facilitating seamless transactions, and capitalizing on the unique benefits of both technologies.
Bitpace as a payment gateway for businesses has several key advantages:
Secure: Bitpace uses the latest and the greatest security systems including 2FA. By accepting cryptocurrency payments via Bitpace, any chargeback is eliminated.
Imagine, Create, and Present: Full control over the payment page. Or you can simply use our pre-made payment page if you want to get started immediately.
Fast Customer Support: The customer support team of Bitpace is available to be of assistance 7 days a week from 5:00 am to 8:00 pm GMT.
Closing Arguments
The consensus mechanism developed by Project Avalanche is among the most interesting developments in blockchain history, making the network more scalable, decentralized, and secure. Avalanche has a high chance of entering the blockchain world with solid investment and stable projects connecting to the network. Today, payment gateway platforms such as Bitpace are the number one choice for businesses that want to benefit from the advantages of AVAX, such as security, decentralization, speed, and very low transaction fees, and it is expected that the number of businesses willing to enjoy these advantages will increase in the near future.