stub Avalanche Vs. Cardano – What’s the Difference? - Securities.io
Connect with us

Avalanche Investor

Avalanche Vs. Cardano – What’s the Difference?

mm
Updated on

Securities.io is committed to rigorous editorial standards. We may receive compensation when you click on links to products we review. Please view our affiliate disclosure. Trading involves risk which may result in the loss of capital.

As you delve deeper into trading cryptocurrencies, there is a good chance you will come across the Avalanche (AVAX) vs. Cardano (ADA) debate. Understanding the differences between these advanced DeFi Networks is crucial in helping you to decide which one is best suited to meet your needs. Here is some valuable insight into Cardano vs. Avalanche.

What is Cardano?

Cardano is often called the “smart blockchain” due to its close relationship with the academic sector. The project began as an experiment to see how incorporating scientific methods into blockchain creation could improve security and functionality. It launched to heavy support, securing over $62M during its ICO.

Today, Cardano is a popular third-generation blockchain that hosts a variety of Dapps. Notably, the network got its name from the Italian physician,  Girolamo Cardano who is best known for the introduction of the systematic computation of probabilities theory.

Cardano (ADA) vs Avalanche (AVAX) - Twitter

Source: Twitter @avalancheavax

Cardano entered the market during the crypto rush of September 2017. Its team consists of former Ethereum developers and founder Jeremy Wood and Charles Hoskinson. The two helped to create Cardano after deciding that Ethereum was limited in its capabilities.

What is Avalanche?

Avalanche is an advanced third-generation DeFi ecosystem that continues to see growth in the market. The network provides programmability and scalability with low-cost transactions to drive adoption. Notably, Avalanche is one of the first networks to introduce multiple blockchains as part of its ecosystem.

Avalanche is designed to support the issuance of complaint Dapps and a wide variety of digital assets and even other blockchains. Its token, AVAX, enables developers to bake regulatory requirements directly into the token’s coding. This approach ensures compliance throughout the life of the asset.

What Problems was Cardano Built to Alleviate?

Cardano was built to help create an academic-centric blockchain. The network provides decentralized computing services to the academic market as well as commercial users. The entire project was focused on leveraging academic theory and peer review to improve the creation and support of decentralized networks.

Sustainability Concerns

When Cardano launched Ethereum was still using a Proof-of-Work consensus mechanism – an approach often derided due to its potential for energy consumption. As such, Cardano wanted to create a more energy-efficient and sustainable alternative.

The network accomplishes this goal by integrating a PoS (Proof of Stake) consensus algorithm that eliminates the use of power-hungry miners. In the Ourobororos consensus system, users stake their tokens to secure the network. In return, they receive rewards in the form of ADA tokens.

What Problems was Avalanche Built to Alleviate?

Avalanche was designed to help reduce a variety of issues plaguing the market. For one, the system helps to alleviate congestion issues that Ethereum developers were suffering from at the time. It accomplished this task by using a blockchain designed to operate exactly like Ethereum for transitioning Dapps.

Ethereum Dapps can launch on this chain and often enjoy lower rates and faster performance. Avalanche is very fast, with the network clocked at 6,500 transactions per second (tps) and sub-second finality. This performance puts it far ahead of Cardano in terms of its tps rate. Notably, the developers claim that Avalanche can scale vertically to support millions of transactions per second one day.

Inflation

Another major issue that AVAX was designed to help reduce is token inflation. Inflation is a major problem for fiat currencies today and has been an issue in the past for DeFi networks. The main reason inflation occurs in a DeFi system is over the issuance of tokens.

To combat this issue, Avalanche introduces an integrated deflationary system. This mechanism automatically burns all network fees. Burning tokens refer to removing them from circulation forever. By reducing the number of tokens in circulation, you drive up the demand. The goal is for these actions help to bolster long-term price stability.

How Does Cardano Work?

Cardano uses a multi-layered approach to improve the reliability and uptime of the network. The system introduces the ‘Ourobororos' consensus mechanisms as part of this strategy. This system is a PoS variety that leverages snapshots of the network called epochs. Epochs streamline validation because they provide faster reference points.

Cardano introduces ADA as its principal utility token. This digital asset can be sent in a peer-to-peer manner internationally. Interestingly, it is also named after another famous mathematician and programmer Ada Lovelace. She was the first computer programmer. Today, Cardano plays a vital role in a variety of academic projects.

How Does Avalanche Work?

Avalanche leverages three separate blockchains working together to provide its services. The network's first chain provides support for Dapps and smart contracts. This chain is where developers can launch assets and more. It’s supported by another inner-network blockchain that handles validation services.

Twitter Cardano (ADA) vs Avalanche (AVAX)

Source: Twitter @Cardano

There is also a blockchain that was designed to support Ethereum migrations. This blockchain replicates the EVM scenario so that developers can easily move their projects to Avalanche and start saving on fees. This structure has proven to be a success as Avalanche is one of the fastest-growing Ethereum competitors currently.

Users can stake their AVAX to gain rewards. The system has minimal requirements including 2 CPU cores, 4GB of memory, and only a 40 gig HD. Anyone can become a validator and secure returns. Staking is one of the easiest ways for new DeFi users to secure consistent returns without risking the loss of their original assets.

How to Buy Cardano (ADA) and Avalanche (AVAX)

Currently, Cardano (ADA) and Avalanche (AVAX) are each available for purchase on the following exchanges.

Uphold – This is one of the top exchanges for United States & UK residents that offers a wide range of cryptocurrencies. Germany & Netherlands are prohibited.

Uphold Disclaimer: Terms Apply. Cryptoassets are highly volatile. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong..

Kraken – Founded in 2011, Kraken is one of the most trusted names in the industry with over 9,000,000 users, and over $207 billion in quarterly trading volume.

The Kraken exchange offers trading access to over 190 countries including Australia, Canada, Europe, and is a top exchange for USA residents. (Excluding New York & Washington state).

Cardano (ADA) vs. Avalanche (AVAX) – Two Reliable Protocols on the Move

There are a lot of benefits that both of these networks bring to the table. Cardano is intertwined with the academic sector, which is a vital part of furthering blockchain adoption and use case scenarios. Avalanche is a top-performing DeFi and Dapp provider that offers low fees and flexibility to users. As such, these networks target different clientele, giving them room to expand in the coming months

To learn more, make sure to visit our Investing in Avalanche and Investing in Cardano guides.

David Hamilton is a full-time journalist and a long-time bitcoinist. He specializes in writing articles on the blockchain. His articles have been published in multiple bitcoin publications including Bitcoinlightning.com

Advertiser Disclosure: Securities.io is committed to rigorous editorial standards to provide our readers with accurate reviews and ratings. We may receive compensation when you click on links to products we reviewed.

ESMA: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Investment advice disclaimer: The information contained on this website is provided for educational purposes, and does not constitute investment advice.

Trading Risk Disclaimer: There is a very high degree of risk involved in trading securities. Trading in any type of financial product including forex, CFDs, stocks, and cryptocurrencies.

This risk is higher with Cryptocurrencies due to markets being decentralized and non-regulated. You should be aware that you may lose a significant portion of your portfolio.

Securities.io is not a registered broker, analyst, or investment advisor.