What is Avalanche? Everything you need to know about AVAX (2024)

Avalanche facts

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What is Avalanche?

Avalanche is a blockchain platform that aims to ensure scalability, security, and decentralization through a unique Proof of Stake (PoS) mechanism. AVAX is the platform's token, enabling users to vote, perform transactions, and receive rewards in return for supporting the blockchain.

How does Avalanche work?

Similar to Ethereum, Avalanche supports smart contracts to run decentralized applications (DApps) on its network. Avalanche's smart contracts are written in the same code language as Ethereum, making Avalanche applications compatible with Ethereum applications, which are in turn used by many other blockchains.

Like many other cryptocurrencies, Avalanche has a maximum supply, which is set at 720 million AVAX tokens, with half of them being created and distributed during Avalanche's launch in 2020. The remaining tokens are to be generated on the network.

Faster than Max Verstappen

From day one, Avalanche has aimed to achieve the fastest "time to finality" for blockchain transactions. Time to finality is the duration it takes for a cryptocurrency transaction to be processed and considered irreversible. Once a transaction is final, it can never be reversed or altered.

Finality is a critical feature of blockchain, especially for financial applications. However, the time required to achieve finality varies among different blockchains. For example, Ethereum takes approximately one minute to achieve finality, while Avalanche achieves finality in one second, which is practically instantaneous.

The Technology Behind AVAX

The Avalanche platform is relatively complex, but there are three elements that distinguish it from other blockchains: the consensus mechanism, Avalanche subnets, and an ecosystem of three built-in blockchains.

Avalanche consensus

Validating and securing a blockchain requires a protocol that allows the validators (nodes) on the network to reach consensus. This is the consensus mechanism.

Avalanche uses a novel consensus mechanism that builds upon the Proof of Stake mechanism. When a transaction is initiated, it is received by a validator who randomly checks a small set of other validators for consensus. Validators repeat this sampling process and "gossip" with each other to eventually reach consensus.

A validator's message is passed to other validators, each of whom invites more validators until the entire system reaches consensus on an outcome. Just as a single snowflake can become an avalanche, a single transaction can eventually become a finalized transaction.

Subnets

Avalanche users can create specialized blockchains that operate according to their own rules.

Consensus on these chains is achieved through subnets, which are groups of validators (nodes) participating in validating a designated set of blockchains. All subnet validators must also validate Avalanche's primary network. To create a Subnet, its creators must stake AVAX tokens.

The Avalanche ecosystem

Avalanche employs three different built-in blockchains:

• The X-Chain
• The C-Chain
• The P-Chain

In summary, the X-Chain is used for creating new tokens, while the C-Chain essentially runs Avalanche's "base code." The P-Chain is used for coordinating validators and creating subnets.

The Avalanche ecosystem features three blockchains to address the limitations of the blockchain trilemma. This trilemma describes three major challenges in building blockchains: decentralization, security, and scalability. Blockchains often have to sacrifice one of these aspects to favor the other two. Avalanche's three blockchains focus on avoiding this problem.

Benefits of Avalanche

Why do investors believe in Avalanche? Here are the key advantages of AVAX:

• Avalanche blockchain technology is unique, innovative, and potentially infinitely scalable.
• Scalable without compromising decentralization.
• Compatible with applications from other blockchains.
• Very fast transaction speeds at low costs.
• Opportunities to create tokens and subnetworks.

Drawbacks of Avalanche

Like any other blockchain, Avalanche has areas for improvement. What are the disadvantages of AVAX?

• There is no "punishment protocol" for fraudulent validators.
• Becoming a validator on the network is expensive, requiring staking 2000 AVAX tokens.
• Disagreements among validators about a transaction can lead to delays.

Who is the founder of Avalanche?

Emin Gün Sirer is the founder of the cryptocurrency Avalanche (AVAX). He is a well-known figure in the blockchain industry and has played a prominent role in the development of the Avalanche network, which aims to create a highly scalable and interoperable blockchain platform.

Price forecasts

In 2026 experts expect a minimal price of €69.79 and a minimal price of €230.76 in 2031.

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Market information

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AVAX Return On Investment

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A video explanation of Avalanche

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