What is Avalanche Blockchain?
Avalanche blockchain (AVAX) is a DLT platform that has features such as interoperability, usability, and scalability. The project was first introduced in 2020 by Ava Labs. The network is also compatible with smart contracts.
Avalanche brings scalability solutions without sacrificing decentralization and security. At the same time, the project focuses on lower costs, faster transaction speeds, and eco-friendly qualities.
The total value locked (TVL) on the Avalanche blockchain is around $8.41 billion. The product has continued to become more popular among dApps developers. Another unique feature of Avalanche is that it has multiple consensus mechanisms. AVAX is the native currency of Avalanche blockchain.
Introduction to AVAX
AVAX the native currency of Avalanche blockchain is a utility token. AVAX acts as a medium of exchange. It means that blockchain users can use AVAX to transfer value from one point to another. This transfer charges a small portion of each blockchain transaction which is called fee.
Additionally, AVAX is also used for distributing incentives among network participants. AVAX is also used in staking protocol at Avalanche. The validators on the blockchain can lock AVAX tokens to get a chance to verify blockchain transaction records and earn yield.
Origin of Avalanche
Blockchain networks have a technical issue called the blockchain trilemma problem. This problem postulates that blockchain networks have to comprise one out of three features namely scalability, security, or decentralization when one of them is improved.
This problem persists in almost all blockchain networks and stems from technical limitations. Ava Labs, the issuer of Avalanche blockchain uses the three-blockchain solution to address the issue.
How does Avalanche Work?
Avalanche has launched three core blockchains namely the exchange chain (X-chain), Platform chain (p-Chain), and contract chain (c-chain). Each chain takes care of a specified function, mentioned as under:
Exchange Chain (X-Chain)
X-chain is used for asset trading. It allows users to make quick and secure payments. In this manner, this is optimized for real-time trading. At the same time, there is an option for multi-signature wallets that bring more security to the platform. Furthermore, this chain also boasts a built-in programming language that can be used to write customized trading protocols.
Platform Chain (P-Chain)
P-Chain is dedicated to building applications and assisting in asset management. This layer runs decentralized applications in an effective manner. In this manner, it lends speed and latency to X-chain. At the same time, this layer has a native smart contract development tool where developers can make customized applications.
Contract Chain (C-Chain)
C-chain is hyper-focused on smart contracts. It contains an ecosystem for smart contract generation and deployment. This layer accelerates transactions and lowers latency. It has a local language for tailor-made contracts.
Solutions offered by Avalanche Blockchain
Congestion
Avalanche focuses on bringing scalability solutions. The network has a 65K TPS (transaction per speed).
Lower Fees
The high transaction fee is a problem that blockchain users face. The Bitcoin community has also discussed the issue of gas fee inflation since the introduction of the Ordinals. However, Avalanche network brings a unique solution to the problem in the form of a burn mechanism. This mechanism allows users to send all AVAX collected as fee after minting, staking, transactions, and blockchain creation to be sent to burn addresses.
Benefits of Avalanche Blockchain
Interoperability
Avalanche blockchain allows various networks to exchange data and communicate with each other in an effective manner. This feature brings value to the overall decentralized networks and unites DeFi in a consolidated industry without depending on a centralized system.
Scalability
Avalanche design ensures scalability that also paves the way for sub-second transaction finality. In this manner, the blockchain is able to support secure transactions at a competitive speed.
Usability
Avalanche blockchain is smart contract enabled. In this manner, the platform hosts a number of decentralized applications that are natively built, updated, and managed.
Conclusion
AVAX is listed on all major exchange platforms such as Binance. The platform is introduced by well-known developers with a sound technical background. At the same time, the project is reliable and brings value to the DeFi industry.
