Avalanche (AVAX) is currently one of the highest crypto coins — according to its market capitalization right now. This article will break down this coin, its network, and how it is tied into the entire DeFi Universe.
What is Avax?
Avalanche (AVAX) is a layer-1 smart contract platform developed by Ava Labs, a Singapore-based company. Avalanche was founded in 2018 by Emin Gün Sirer, a Cornell University professor who created Ava Labs in the same year. After raising $60,000,000 in 2019 and 2020, the Avalanche Mainnet went live in 2020.
It is a proof-of-stake blockchain that’s compatible with Ethereum. The Avalanche is a crypto network where you can develop decentralized applications (dApps) and build your own blockchains.
The Avalanche Network
The ecosystem comprises a primary network and three built-in blockchains that allow Avalanche to expand inside its own digital network further.
The primary network secures and validates the three built-in blockchains. These blockchains make it possible to exchange and stake on the network that you would not be able to perform unless you want to separate dApps. They are the following:
X-Chain (Exchange Chain)
They can be traded based on the DAG (Directed Acyclic Graph). It operates through the partial ordering of decisions, a method of storing data that differs from the linear approach of both Bitcoin and Ethereum. This allows every transaction in the Avalanche network to belong to its own set where it can use the Avalanche consensus protocol to process the fastest transactions in the market.
P-Chain (Platform Chain)
Using the snowman consensus protocol, the P-Chain can manage and keep track of active subnets and create new subnets. Subnets are a group of validators. Each subnet can validate multiple blockchains simultaneously, but a blockchain can only be validated by one subnet at a time.
C-Chain (Contract Chain)
A smart contract blockchain on Avalanche enables the creation of Ethereum compatible smart contracts. So the C-chain is capable of interfacing with decentralized apps and paying gas fees that would be expensive on the Ethereum blockchain, which is a problem that Avalanche is looking to solve.
Guarda now supports Avalanche (AVAX) C-Chain. Available for holding purchase, and exchange.
The Avalanche Consensus
The Avalanche tries to solve the complex problem known as consensus. These protocols achieve an agreement where they vote on transaction issues. And the validators vote on the confirmation of the transactions. It is just like voting in politics, where you have the bill voted on by the senators on the seat. Then, the bill is either passed or vetoed.
How does the consensus work?
The consensus works with the help of random sub-sampled voting and network gossip. The consensus method is developed when random volunteers are asked to repeatedly make decisions until the decision is finalized. The volunteers who make decisions are known as validators.
- The trader makes the transaction
- Validators receive the transaction as well as other transactions
- The validators vote on whether the transaction is valid—It is either accepted or rejected
- Transactions that are accepted are added to the list of valid transactions where the snowball algorithm begins random subsampling. A random subset of validators is selected and asked while being updated while the threshold is met.
- Once the preferred threshold is met, any transaction that conflicts with the threshold will be rejected. If the transaction is accepted, it will be added to the Avalanche network.
Benefits of the Avalanche Ecosystem
- Avalanche is one of the crypto coins with fast agreement time in the market that are scalable.
- Transaction speed is high when compared to Bitcoin or Ethereum. Avalanche takes around 3 seconds to finalize a transaction.
- Avalanche consensus makes it possible to process over 4,500 transactions per second with near-instant finality while maintaining a high level of security.
- Transaction fees are low.
AVAX — Avalanche’s primary token — can be used as governance on the platform. Investors can stake their AVAX tokens by validating and helping secure the primary network. Coins can also be used to vote on proposed changes in the network.
AVAX has a max supply of 720 million coins. Half of which was generated in the Avalanche chain genesis block. Avalanche token fees are periodically burned as an anti-inflationary mechanism. The proof-of-stake platform relies on validators to receive block rewards by staking AVAX. Validators can earn up to an 11% annual reward on staked AVAX.
Staking is the process of locking up tokens to support a network while receiving a reward in return like Monetary compensation or increased network utility.
How to buy AVAX on Guarda
Guarda is a crypto platform where you can buy, exchange, store, and even stake your cryptocurrencies. Follow these steps to buy the AVAX token on the platform.
- Create an account on the Guarda platform via browser, in-app, or even the chrome extension.
- Input the amount you want to pay for the AVAX coins. Guarda supports many currencies, USD, EUR, etc.
- Choose your preferred payment option. On Guarda, you can pay with Visa/Mastercard or SEPA.
- Verify your identity and payment. After verification, click buy, and your coins will appear in your wallet.
Within a few years, Avalanche gained a lot of attention, and it’s quickly changing the blockchain industry. Although there are many reasons for the platform’s popularity, the best reasons include * its exceptional scaling capabilities
- valuable consensus protocol features
- quick confirmation times.
In the future, Avalanche is set to introduce various unique features to expand the network to improve the existing user experience.