Avalanche is an open-source environment that hosts DeFi projects using smart contracts and allows them to inter-operate with each other, using its native PoS (Proof of Stake) avalanche token. The network is highly scalable and claims to be the first smart contract blockchain with transactions settled under 1 second as the standard. It aims to be a global assets exchange. The current price at the time of this writing is $30.13 per token.
Development Team
Avalanche was and is developed by Ava Labs. Their team is headed by Dr. Emin Gun Sirer, a veteran computer scientist who helped develop scaling for Bitcoin (a direct result of that work being the avalanche ecosystem and snow protocol). Kevin Seqniki, the COO, was a professor at Cornell University and researcher at JPL (Jet Propulsion Labs) before coming onboard to Ava Labs. Their chief protocol architect, Maofan “Ted” Yin, is a protege of Dr. Sirer and working to receive his doctorate from Cornell.
Image Source
Dr. Sirer
Coin Economics
Avalanche has a hard set coin creation limit at 720,000,000. Transactions on the network burn fees, increasing scarcity, however this is offset by new token creation. The genesis block contained half of all AVAX in existence. In contrast to bitcoin, future emission rates can be changed through community consensus.
Image Source
Avalanche Emissions over time
How does Avalanche work?
There are 2 main parts of Avalanche that I want to cover here – the Snow protocols and a general overview of the infrastructure of Avalanche.
Snow protocols. The snow protocols are protocols that not only help avalanche to be robust, secure, and efficient, but also are resistant to 51% attacks. The 51% attack is the bane of all crypto investors and the fastest way to devalue a coin. But how does it achieve this? This article from coin bureau explains it best:
“The Snow protocols do this by using repeated random sub-sampled voting. This works by having each validator query only a small, random sampling of other validators each round. The selected validators are weighted by stake amount, and this methodology allows the protocol to theoretically scale to millions of participants.”
What this means is that instead of indexing all nodes to form consensus, they pick a series of random nodes to form a consensus. Thus, even if 51% of the nodes are compromised in the network, through random sampling fake transactions could still be detected and mitigated.
Next, let’s talk about platform architecture, which is made up of three parts. First, we have the X chain. What this does is handle the avalanche consensus protocol and handle the creation and exchanging of assets. Next, we have the P chain, which coordinates validators and creates individual subnets, managing the metadata for the network. And finally, we have the C chain, which handles the smart contracts and NFT aspects of the network.
Image Source
Avalanche Infrastructure
Use Cases
Avalanche has many advantages over other cryptocurrencies. Its protocol allows for up to 6500 transactions per second, which is a huge improvement over older more traditional protocols.
Original Content
This makes transferring Avalanche incredibly fast and keeps fees low, with sub 1.35 second latency on the network.
Avalanche can also host dApps, just like Ethereum. However, because of Avalanche’s protocol, smart contracts will be able to execute faster and cheaper. Economic parameters can be voted on by the community, so if it the platform was to experience a heavier load investors could vote directly to adjust costs and fees associated with transactions.
Finally, Avalanche serves to be a “platform or platforms.” They provide a decentralized asset trading exchange that anyone can create assets on. This can allow developers to create digital assets, even mimicking compliance regulations if need be. This is like the concept of an NFT, which itself is an digital asset, but more complex and with more flexibility.
Conclusion
Avalanche has an active and reputable development community along with a unique protocol for securing the network and transactions. This platform really has a lot to offer. Perhaps we will see great things from them some day? It can’t hurt to HODL a small bag. I hope you enjoyed this article.