What Is Avalanche Crypto Protocol?

Avalanche has been rising steadily in value in the last few months since its inception due to its tokens’ stability. Moreover, other than operating its blockchain, this decentralized platform can aggregate other blockchain protocols and cryptocurrencies on its network. Due to these features, many crypto traders see it as an Ethereum alternative.

What is Avalanche?

Avalanche is a new protocol operating in the DeFi industry and finalizes transactions in under one second. This is possible since it works under a proof of stake system.

Proof of work is the method used to power cryptos such as Ethereum and Bitcoin. Its transaction volume is low. Moreover, proof of work has high transaction fees.

On the other hand, proof of stake ensures that blockchains are secure, energy-efficient, and highly scalable. Moreover, it connects to several blockchain networks, making it ideal for users who intend to access platforms on Ethereum and other popular blockchains.

Brief History of Avalanche

Three co-founders launched the project in September 2020. The most known founder Emin Gun Sirer is a computer scientist from Cornell University. He is accredited for playing a critical role with Bitcoin scalability upgrades for several years, dating back to the early days of crypto.

Prestigious venture capital firms such as Polychain Capital and Andreessen Horowitz back Avalanche.

Ava Labs launched AVAX token in August 2020 to raise funds for the crypto project. One month later, it was trading at $ 4.10 and had a market cap of $100 million. At the time of writing this article, the token is trading at $27.03 per coin. This represents a drop of 9.82 percent in the last 24 hours. The token’s current market cap is approximately $2.1 billion, showing an unprecedented increase in value in less than 6 months.

After a team of PhD researchers vetted and reported in 2018 that the Snow family consensus protocols that powers the platform works, Ava Labs launched the process of creating the platform later in the same year.

Avalanche Platform Features

Avalanche architecture is made up of four main concepts.

DAG-optimized consensus

On launch, it had a DAG-optimized consensus known for having a high-throughput and simplicity to prune.

There is also the Snowman, which is an optimized chain consensus. It has:

  • High-throughput
  • Great features for smart contracts
  • Totally ordered

Virtual Machines (VMs)

These machines use code consensus to produce a database in the form of a log file, a DGA, chain, or some other data structure that needs synchronization across several machines.

Chains

On the blockchain, every chain is assigned ChainID. They are typically part of a single subnet. Nevertheless, one can deploy the same chain multiple times within other subnets or a subset. It comes with three chains. These are:

  • X-Chain
  • P-Chain
  • C-Chain

Subnets

Some people refer to subnets as subnetwork, and it is a subset of validators in the platform. Anyone who chooses to be a subset member has the right to validate the chains deployed on a subset.

Subsets create their incentive mechanisms for each validator.

AVAX Token and its Purpose

AVAX is Avalanche’s native token. It is a medium of payment on the platform. It is also used for governance and rewards on the Avalanche.

AVAX’s maximum supply was capped at 720 million tokens, and the genesis block contained half of that.

The platform will release the remaining half according to an emission curve as per the Avalanche whitepaper.

Unlike in the case of the Bitcoin emission, community consensus can change the AVAX release rate at any time.

Another contrast is that users can “burn” AVAX transaction fees to increase token’s scarcity. The release of new coins often offsets the process.

Avalanche Wallet

Avalanche wallet was designed with the needs of users in mind. The non-custodial wallet for managing and holding Avalanche assets is simple and secure.

1. Access your wallet

Once you visit the network, you can access your wallet or create another one to send, receive, and swap the assets in no time.

  • Remember to store your 24-word key phrase safely to avoid disappointments. Anyone who has access to the phrase can access your funds and mismanage them. Moreover, you can’t access your wallet if you misplace the key phrase.

After that, you can start staking your coins to maximize your earnings, which is the goal of yield farmers.

2. Transfer your tokens to the P chain from the X chain.

  • You can use the X chain to create and trade the assets. However, if you want to manage the metadata or stake your tokens, you should transfer them to the P chain.

3. Delegate the tokens to a validator

  • Look for a delegator that suits your needs and preferences. If you want a particular Node ID, you can make use of the search bar. Next, select the duration in which you intend to stake your AVAX in the wallet.

Note that as long as your tokens are staked, they are illiquid. Also, you won’t earn rewards during the staking period. Once the period has ended, your tokens will become liquid again. Besides, you will receive staking rewards.

Where to get AVAX

You can buy lots of AVAX tokens from a wide variety of platforms. This is so given that the token is freely exchangeable. One easy way to get AVAX, therefore, is to head to Swapzone. Here is a simple guide on getting AVAX tokens.

  1. Go to Swapzone.io to get your work started.
  2. Select the cryptocurrency that you'd like to exchange, a coin or a token.
  3. Specify the total amount you're going to transfer.
  4. Select AVAX in the Get Up To section.
  5. Review the offers on the screen. You will find multiple offers with the best rate listed at the top. You can also see how many minutes it would take for you to complete the exchange.
  6. Confirm the offer you wish to utilize and then enter the wallet to receive the AVAX currency.
  7. List the address that will take the currency you are exchanging.
  8. Confirm the trade to complete the transaction.

If you are new to the crypto industry, you might also want to know about how to buy AVAX on exchanges such as OKEx, Huobi Global, and Binance. Here is what you should know before you proceed:

  1. Understand how your chosen exchange works and whether it supports AVAX
  2. Create an account on the exchange
  3. Make the required deposit
  4. Search for the AVAX market and ensure you have a suitable cryptocurrency in your account
  5. Trade the currency for AVAX

Please note that you can also open or buy a wallet that supports AVAX. This is often optional since most exchanges will give you the right to use their built-in wallets. However, be sure your wallet is secure before opting to use it.

Conclusion

Avalanche platform effectively fills use cases that present cryptocurrency platforms cannot provide. While offering this, it retains the promise of decentralization. As such, if you want a system that supports your high-throughput, ensures privacy, and transacts within the shortest period, this platform is suitable for your needs.