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The evolution of the crypto market can be seen in today’s top-performing networks. Understanding the difference between networks such as Avalanche (AVAX) vs Polkadot (DOT) can help you to gain a better understanding of the direction of the crypto industry. These high-performance smart contract programmable protocols provide more flexibility and scalability when compared to their predecessors. Here’s everything you need to know about Avalanche vs Polkadot.
What is Avalanche?
Avalanche is a very popular token that can be found on many exchanges. The protocol was built with the goal to provide more interoperability and improve developer onboarding. Uniquely, Avalanche leverages a multi-chain infrastructure to provide a trustless framework for developers. The protocol operates as a payments system that supports the latest DeFi functionalities, including the creation of application-specific blockchains.
What is Polkadot?
Polkadot is a smart contract programmable blockchain that was built to improve on many of the shortcomings of Ethereum. The protocol was developed by Ethereum co-founder, Gavin Wood. He left Ethereum in 2016 with the goal to create a more expansive and capable blockchain. Polkadot accomplishes this task via a sharded design and new features.
What Problems was Avalanche Built to Alleviate?
Avalanche entered the market with a targeted approach. The network helps to eliminate some of the biggest issues faced by developers. For one, the network reduces centralization. For years, Ethereum was the only smart contract programmable network. Avalanche provides an alternative that is more energy-efficient, cheaper to use, and scalable.
It was necessary to ensure that Avalanche would be able to out scale early networks. The developers were able to leverage a multi-chain approach to give Avalanche unmatched scalability. Specifically, the network has been clocked at 6,500 transactions per second. This is a major upgrade from Ethereum's 30 tps. Additionally, the unique consensus protocol enables sub-second finality.
In the past, new networks could find it difficult for developers to convert due to new programming languages and other technical roadblocks. Avalanche eliminates this problem. The highly programmable blockchain can leverage multiple custom virtual machines. This approach streamlines Dapp migrations to the network because it eliminates the need to recode.
Avalanche makes it easy to create digital assets, networks, and smart contracts. Developers can use the network to create Dapps that cost less to operate and provide more functionality. Additionally, developers can build compliant Dapps that integrate custom rule sets to meet regulatory requirements.
What Problems was Polkadot Built to Alleviate?
Polkadot was built to provide the crypto market with an alternative to Ethereum. Wood realized early on that Ethereum’s congestion issues and developer restrictions would grow to become major issue in the future. His assumptions were correct, as Ethereum is now the most expensive network to run smart contracts on.
Polkadot provides lower fees to developers. It’s cheaper to create blockchain assets, conduct transactions, mint new tokens, and build blockchains versus Ethereum. The protocol leverages a unique ecosystem to improve interoperability between blockchains. This structure enables developers to leverage data from both public and private blockchains. To accomplish this task, the network introduces bridges.
Another issue that Polkadot helps to solve is Dapp operating costs. Many Dapps don’t require a constant connection to a blockchain to operate properly. For these protocols, it can be much more cost-effective to use Parathreads. Parathreads are custom-built networks that operate on a pay-as-you-go pricing model.
How Does Avalanche Work?
Looking at Avalanche the first thing you notice is the network is composed of three separate blockchains that communicate together to improve functionality. The main component of the network is called the subnet. The Subnet is where new blockchains are built. This layer provides flexibility to developers. These networks can have unique fee structures, tokens, and even consensus mechanisms.
The next layer is the X-chain. X-chain is the layer where users mint new digital assets. Here you will find everything to create NFTs (non-fungible tokens), stablecoins, utility tokens, and wrapped tokens. These assets can leverage advanced DeFi protocols such as staking features. Staking simplifies securing consistent returns as your rewards are based on your stake and not the crypto market's performance.
The C-chain is a unique concept to Avalanche. This blockchain was built specifically to streamline Ethereum conversion. The layer provides full interoperability with Ethereum’s top tools and features. Developers can use this layer to include more features in their protocols and build apps using the options they are familiar with. Specifically, the layer supports MetaMask, Web3.js, Remix, Truffle Suite, and Embark Platform
The P-Chain is the validation layer of AVAX. This layer maintains the network's core functionalities. The P-chain handles the creation of subnets, monitoring existing systems, and coordinating network validators. This layer is also where users stake their tokens to secure returns.
How Does Polkadot Work?
Polkadot leverages a different style of a multi-layered approach to accomplish its goals. The network can be broken into Parachains and Parathreads. Parachains are blockchains built on Polkadot’s infrastructure. These networks are stand-alone blockchains that have full creative control.
It’s common for a parachain to have separate consensus and governance mechanisms in use. Parachains are ideal for commercial use as they enable developers to optimize the protocol for specific use cases. These networks can have their own tokens as well. The other networks in use within the Polkadot ecosystem are called Parathreads. These are the pay-as-you-go networks.
Another cool feature of Polkadot is its bridge protocols. This system allows parachains and parathreads to connect and communicate with external networks like Bitcoin. Developers can use the best features from other networks using bridges which makes them extremely popular. This feature saves time and provides more functionality for Dapps.
AVAX is the utility token for Avalanche. This flexible token has a capped supply of 720 million tokens. You can use AVAX to pay fees on the network or send value globally. You can also stake AVAX to secure passive returns. Users stake AVAX to become a validator on the network.
DOT is the utility token for Polkadot. DOT is a popular option among traders. It can be staked or used as a cryptocurrency. Users hold DOT to participate in the network's community governance systems.
How to Buy Avalanche (AVAX) and Polkadot (DOT)
Currently, Avalanche (AVAX) and Polkadot (DOT) can each be purchased 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).
Avalanche Vs. Polkadot
Avalanche (AVAX) vs Polkadot (DOT) is a common debate that traders encounter in the market. Now that you have more insight into the matter, you are prepared to make an informed decision. It’s worth noting that both of these protocols have a strong following in the market. As such, you can predict both to see continued adoption.
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