clock10 minutes
article image

AVAX coin

The avalanche of crypto technology has totally shaken up finance, making transactions swift and secure. But, despite all of their positive sides, existing blockchain platforms face ongoing challenges like scalability, security, and even decentralisation. Fortunately for all crypto lovers, Avalanche (AVAX) stepped up to tackle these issues and bring more efficiency and security to the game.

Being a Layer-1 blockchain, Avalanche presents itself as a sophisticated platform for DApps and tailored blockchain systems. Being a direct  competitor of Ethereum, the progenitor of all decentralized applications and the creator of a highly valuable crypto, Avalanche directs its focus on surpassing Ethereum and becoming the preeminent blockchain for smart contracts.

So, what is it about Avalanche that makes it stand out? Well, for one, it's shooting for a crazy high throughput – up to 4,500 TPS – all while keeping scalability in check. That's the kind of game-changing move that could redefine the whole blockchain scene.

The Short History of Avalanche (AVAX) Technology

The story of Avalanche begins in 2018, with a group of developers linked to Team Rocket, keeping their identities under wraps, dropped the bombshell "Snowflake to Avalanche: A Novel Metastable Consensus Protocol Family for Cryptocurrencies" on the IPFS hypermedia communication protocol’s  website.

This move didn't go unnoticed – the project quickly earned kudos as a groundbreaking development, even getting a thumbs-up from professor Emin Gün Sirer, who worked at Cornell University. In that same remarkable year, Emin Gün Sirer, along with buddies Kevin Seknicki and Maofan Yin, decided to kickstart Ava Labs, which now stands behind the development and operation of Avalanche platform.

Fast forward to 2019, and Ava Labs, joining forces with Team Rocket, rolled out an updated version of "Snowflake to Avalanche." They didn't keep it to themselves, sharing the whole shebang online, featuring three whitepapers diving deep into the token, Stablecoins, and the Avalanche platform. By the time 2020 rolled around, Ava Labs had managed to pocket a cool $12 million through a private tokensale and an additional $42 million through public tokenization.

The official launch of Avalanche unfolded on September 21, 2020, marking a very important milestone in the platform's evolution.

How Does Avalanche Function

At the heart of Avalanche lies its consensus mechanism, embracing a pioneering PoS (“proof-of-stake” and not what you just thought of) approach. In this intricate process, validators commit AVAX tokens to approve the transactions. Each validator autonomously approves a transaction and subsequently selects an array of other validators to reach consensus. Crazy to think about it, but this process typically takes just a few seconds. This rapid consensus not only upholds a heightened level of decentralization and scalability but also anticipates enhanced efficiency as the network undergoes expansion.

Avalanche's architectural framework is centered around the integration of multiple blockchains, each tailored to specific functionalities. This distributed approach among multiple chains contributes significantly to Avalanche's efficiency, enabling the processing of 4,500 TPS and the swift completion of transactions that takes only 2 seconds. The three primary chains encompass the following:

1.Exchange Chain (X-Chain): Has a role of the default blockchain. Exchange Chain orchestrates minting and exchange of crypto assets, including AVAX's proprietary token.
2.Contract Chain (C-Chain): Its primary focus is to streamline the generation and implementation of smart contracts, utilizing the Ethereum Virtual Machine for smooth inter-chain communication.
3.Platform Chain (P-Chain): This chain takes charge of overseeing validators and the creation and operation of sub-networks (sub-chains).

AVAX Crypto Coin

The Avalanche system embraces a wide array of crypto assets. 

In this varied landscape, AVAX stands out as a notable entity. AVAX is a transaction (gas) crypto token that boasts a capped maximum issuance of 720 million. It has a pivotal role in financing the dynamic operations of the Avalanche network. This inventive approach leads to a gradual diminishing of the AVAX token supply, evolving as more users participate and utilize the platform. Its importance becomes evident when handling transaction fees within the network, seamlessly integrating with the intricate functionalities of the platform.

The allure of AVAX lies in its capacity to unlock a diverse range of platform services, actively bolster network security, and grant owners the autonomy to oversee platform management. The price of 1 AVAX coin is normally dancing around 30-32 USD per coin. The AVAX price doesn't just fluctuate randomly; it's influenced by a few key things:

1. General Market: Like any other token, AVAX coin is affected by how people generally feel about the market. For example, if you compare prices of AVAX and Bircoin, you might notice that they tend to move together.
2. Avalanche's Market: The success of Avalanche in the market really matters for AVAX. For example, in August 2021, Avalanche Protocol did something big — they introduced a $180 million USD liquidity mining incentive program, teaming up with well-known DeFi players like Curve and AAVE. This move brought more DeFi projects into the growing ecosystem, laying a strong foundation for AVAX to grow significantly.

Is AVAX an ERC20 Token?

No, AVAX isn't an ERC20 token. Avalanche plays the role of an Ethereum-compatible blockchain platform, letting you easily move your ERC20 tokens using the Avalanche Bridge. This strategic feature reflects the team's astuteness regarding the prevalence of ERC20 tokens, contributing to enhanced interoperability within the Avalanche ecosystem.

The Good and Not-So-Good Sides of Avalanche

Now it’s time to talk about the pros and cons of Avalanche:

Pros: Cons:
Rapid transactions  Tough competition from the giants of crypto world like Ethereum
Active participation incentivized through a rewarding structure Validators are required to stake 2,000 AVAX tokens
Flexibility. Avalanche (AVAX) is supporting the wide array of blockchain projects Unfortunately, there are no consequences for validators who aren't playing by the rules, posing a risk of losing AVAX coins.


How To Buy AVAX?

Acquiring Avalanche (AVAX) token is a streamlined process, offering a range of options for users. A prevalent method involves using crypto wallets to store your Avalanche (AVAX), such as Metamask wallet. Following this, AVAX can be obtained from various cryptocurrency exchanges, one of which being the prominent platform known as Kraken. Simply register on Kraken, deposit funds, and locate the AVAX trading pair to execute your purchase. Once AVAX is secured, it is advisable to store it safely in your Metamask wallet, or any wallet of your choice.