With several projects competing against Ethereum, it’s evident that some are garnering public attention and building their own communities. This is a positive sign, as many projects won’t last in the long run, and only a select few will capture attention and adoption. One such project is Avalanche.
Coin Price History
$AVAX is a fixed supply token, similar to $BTC, which ensures scarcity and protection against devaluation due to inflation, unlike other staking platforms. To put it into perspective, Polkadot has a 10% annual inflation rate, and by 2050, the supply of DOT will grow from 1 billion to 16 billion. Assuming that the prices of DOT, ETH, and AVAX remain constant, here’s how their market caps would look in 2050:
ETH: $157 Billion.
Avalanche underwent over a year of development before its mainnet launch in September 2020. The project was initiated by Ava Labs and led by Emin Gün Sirer, a Cornell researcher with a deep background in Bitcoin and decentralized networks. Ava Labs has three co-founders, including Emin Sirer, a prominent computer scientist associated with Bitcoin. Sirer had long been concerned about Bitcoin’s scalability, and the Avalanche consensus mechanism was a direct result of his research, allowing significantly higher transaction volumes compared to Bitcoin, even competing with entities like Visa. Similar to Sirer, co-founders Kevin Sekniqi and Maofan “Ted” Yin also have connections to Cornell University. Sirer serves as an advisor to Yin, who is pursuing a Ph.D. in computer science. The rest of the team includes experts in computer science, economics, finance, and law.
Avalanche is an open-source platform for launching decentralized applications and enterprise blockchain deployments within an ecosystem designed for scalability and rapid transaction finality. It is the first decentralized smart contract platform built for global financial scale, with almost instant transaction finality. Ethereum developers can quickly build on Avalanche because the Solidity language works directly.
Avalanche (AVAX) is a blockchain ecosystem designed for secure, globally distributed, and decentralized networking. It has been called the “platform of platforms” by developers. Uniquely, the protocol leverages three separate blockchains to create a trustless framework that can communicate with each other. Additionally, Avalanche offers a payment solution in the form of the AVAX cryptocurrency, with the goal of outperforming ETH 2.0 in terms of production yield and latency. AVAX is designed to address several limitations of older blockchain platforms, including low transaction speeds, centralization, and scalability, using various innovations to achieve this. This includes the unique Avalanche consensus protocol, promising low latency, high production capacity, and resistance to 51% attacks.
Avalanche enables individuals and companies to easily deploy their own blockchains built for their specific purposes, whether for private (permissioned) or public (permissionless) use. This is unique because it uses a combination of custom-built blockchains, alongside a robust proof-of-stake consensus mechanism, to create an exceptionally decentralized platform for developers to build on. Due to its compatibility with Ethereum tools, developers can easily port their Ethereum dApps to Avalanche and launch a wide range of decentralized applications on the platform. These applications can run on their own Avalanche blockchains, giving developers incredible control over their security and usability, as well as determining who can access them.
Strengths and Weaknesses of the Project
In addition to its high scalability, Avalanche is built to address other major issues facing today’s blockchain-based systems: Interoperability. It achieves this by allowing blockchains within and between subnets to communicate with each other, enabling them to complement each other and support cross-chain value transfer. It is also highly inclusive. While many proof-of-stake blockchains only allow a small number of validators to participate in achieving consensus, Avalanche allows anyone staking at least 2,000 AVAX to participate.
Around early February 2021, an Ava Labs engineer reported a minor code bug that severely impacted the Avalanche blockchain due to increasing network congestion. The blockchain, which had been touted for its ability to handle high transaction volume, was slowed to a standstill by an unusually high volume of transactions.
Avalanche launched in September 2020 with a claim that it could process 4,500 transactions per second. While positioned to capture market share from Ethereum, Avalanche has also been announced as a way to complement and connect rather than directly compete with its predecessor. Avalanche has three “default chains,” including the so-called “contract chain” that supports Ethereum Virtual Machine and its Solidity programming language. However, this chain was part of the code bug problem. In short, to increase transaction throughput, the three Avalanche chains remain separate and different from each other. Each performs a range of transaction types, and it’s time for an asset to jump to another chain.
This process was placed under extreme stress, following the launch of a new decentralized money market called Pangolin at the time. Given Avalanche’s decentralized nature, it would be virtually impossible for all nodes to collude and roll back the problematic transactions. A solution was found through a phased patch deployment, similar to how any software gets updated.
In conclusion, Avalanche has been rapidly advancing. The entire development stack and product releases are prepared for its new features. One of the major developments is the Apricot upgrade, which has brought various advancements to Avalanche. This includes ‘certifiable pruning’, allowing nodes to be online in a fraction of the time; there is a freeze and unfreeze function for token issuers; and native ERC20 support. Beyond this, the layer 2 decentralized exchange platform, Injective Protocol, will be integrated with Avalanche to bring a wide range of derivatives that can operate alongside the platform. Furthermore, in its broader vision, there are plans to add a ‘Privacy VM,’ which will allow private smart contracts on Avalanche, one of the most significant upgrades on Avalanche’s roadmap.