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What is Avalanche? A Smart Contract Blockchain Platform

What is Avalanche? A Smart Contract Blockchain Platform

  • Avalanche is the most advanced smart contract platform in the blockchain industry. It is fast, open, and programmable for decentralized applications.
Portada Avalanche

Avalanche is the most advanced smart contract platform in the blockchain industry. It is fast, open, and programmable for decentralized applications and has its native token, AVAX. Avalanche helps build decentralized apps (dapps) quickly, cheaply, and compatible with Solidity, a programming language.

These Ethereum dapps confirm transactions instantly and process thousands of transactions per second, much faster than any current decentralized blockchain platform. It also helps launch custom, private, and public blockchains that fit the needs of any application.

What is Avalanche?

According to its website, Avalanche is the fastest smart contracts platform in the blockchain industry as measured by time-to-finality. It has the most validators securing its activity of any proof-of-stake protocol, and it is fast, low cost, and green. Avalanche can outperform any smart contract-enabled application. For example, it can process 4,500 TPS (transactions per second) versus Ethereum’s 14 TPS.

According to CoinDesk, Avalanche’s native token, AVAX, is the 10th-largest, with a market cap of $33 billion up to March 2022.

How does Avalanche Work?

The goal of Avalanche is to create a unified global financial market in which users can trade cryptocurrencies without friction. Avalanche uses the Proof-of-Stake consensus mechanism, which means that obtaining the corresponding reward in a transaction block is directly proportional to the number of coins deposited.

It makes the platform fast and consumes less power than other available exchanges. AVA, Avalanche’s network, enables the development of dapps by users to further enhance the platform. It also allows the launch of their networks with suitable and smaller infrastructure.

The platform targets different blockchains and exchanges and processes around 4,500 transactions per second.

Avalanche plataforma blockchain

Avalanche’s Origin

Avalanche started as a project in 2018 and was released in 2020. It was created by Emin Gün Sirer, a computer scientist and professor at Cornell University. Gün Sirer is also the founder of Ava Labs, where he worked with Kevin Sekniqi and Maofan Yin to lay the foundation for AVAX and the network before its launch in 2020. The team wanted to build something more scalable than Bitcoin, so they founded Ava Labs.

cornell univerisity avalanche
Cornell University.

Investments and Partnerships

Avalanche has received three rounds of undisclosed investment, except for its second round of $50,000. This platform’s developers and investors launched an incubator and investment company called Blizzard with $200 million.

Currently, it is in its initial stage. The fund was raised by investors, including the Avalanche Foundation, Ava Labs, Polychain Capital, Three Arrows Capital, Dragonfly Capital, and CMS Holdings.

Ava Labs and six former Avalanche Foundation employees will run the company and incubator. The added value of the Blizzard Incubator are resources to help with community building, marketing, and introduction to service providers.

In exchange for the services and capital provided, Blizzard will receive a portion of the governance tokens that control the products in the Avalanche ecosystem. These tokens will be distributed to the fund’s founders and will not be held by Blizzard. Now part of Blizzard, Ava Labs has already made 1,100 deals in the last ten months.

Competitors in the Market

Despite being such a new concept, Avalanche already has competitors like Ethereum. However, it does not offer the flexibility to launch blockchains with many application-specific feature options, which Avalanche does. Still, Ethereum has become a significant cryptocurrency for many transactions.

Avalanche competitors

Another competitor is Algorand which has a wide range of partners, from universities to financial services. Also, Cosmos, a network built with Web 3.0, is your competition. The platform has 253 apps in its ecosystem and has less focus on finance. Cosmos is selling itself as «the internet of blockchains,» which could even beat Web 3.0 at its own game.

Avalanche and the Web 3.0

Avalanche offers a wide range of services eloquently suggested by the epithet «the internet of money.» Among these services are peer-to-peer lending, trading, and the creation of subnets for which AVAX tokens are required. The platform aims to provide a seamless operating experience across different financial assets and activities.

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Another step of Avalanche toward Web 3.0 is that it presents many new possibilities for developers and creators of dapps on the blockchain. The platform will act as a central hub and exchange for the future of financial transactions, both crypto and more traditional.

avalanche possibilities for creators of dapps on the blockchain

With the AVAX token supply launching in early 2022 and surging in the final weeks of 2021, Avalanche can outperform its competitors on the path to a blockchain and financial ease internet.

Its popularity has continued to rise, and the Avalanche token is currently worth $28.34. With this, greater demand from users may cause the price to increase. Avalanche will be part of the future of blockchain and indeed Web 3.0, especially in the long term.

AVAX in 2022

Grafica Avalanche 2022
Avalanche between 2021-2022. Source: Coinmarketcap.com

So far this year, AVAX has lost more than 75% of its value; it went from 113 dollars to 27.63 dollars. If we consider May 2022 critical for all cryptocurrencies, the drop has been 57%. Total Value Locked (TVL) also fell by $4.77 billion.

Currently, the total supply of AVAX is 720 million, and it has a market capitalization of 7.6 billion. On the other hand, the main changes to trade on Avalanche are with Binance, OKX, Bybit, and FTX.

On the other hand, Avalanche is one of the leading blockchains in NFT sales. He has generated more than 277 million dollars with digital art to date.

Predictions for AVAX

Based on AVAX’s behavior so far in 2022, the cryptocurrency will be in a neutral term. Its minimum value would be around 24 to 26 dollars, and the maximum could reach 37 dollars. In turn, everyone agrees that to recover its value of 113 dollars that it had at the beginning of the year would still take three to four years.

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