stub Investing In Avalanche (AVAX) - Everything You Need to Know - Securities.io
Connect with us

Avalanche Investor

Investing In Avalanche (AVAX) – Everything You Need to Know

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.

Avalanche (AVAX) is a blockchain ecosystem that was designed to function as a secure, globally distributed, decentralized network. The project has been referred to as a “platform of platforms” by its developers. Uniquely, the protocol leverages three distinct blockchains to create an interoperable and trustless framework for developers to build upon. Additionally, Avalanche offers payment solutions in the form of a cryptocurrency (AVAX).

What Problems Does Avalanche (AVAX) Solve?

Avalanche was built to solve multiple issues found in most blockchain networks today. The platform combats centralization by providing a viable alternative to networks like Ethereum. It also builds upon some of the shortcomings of that network with more programmability, features, and functionalities.

Congestion

Avalanche is designed to be scalable. The network has demonstrated sub-second transaction times, putting it on par with the top payment processors in the world, such as VISA and PayPal. Specifically, the blockchain has can process 6,500 transactions per second. These transactions feature sub-second finality as well. 

Low Fees

In terms of operating costs, the Gas fees on Avalanche are much more affordable than Ethereum. There are fees for creating and minting assets. You also pay fees on transactions, staking, and the creation of blockchains. These fees are then burned.

Avalanche (AVAX) Features

Benefits of Avalanche (AVAX)

Avalanche introduces some impressive benefits for corporate and individual users. The network allows businesses to effortlessly create new blockchains. Developers can construct a selection of blockchain services, tokens, and coins. Avalanche tokens can represent financial instruments such as equities, bonds, debt, fractionalized real estate, and more. They can also be coded as NFTs (non-fungible tokens).

Programmable

One of the core desires of the developers behind Avalanche was to allow businesses to create application-specific blockchains and Dapps. The network was built to execute multiple custom virtual machines in addition to instances of the Avalanche Virtual Machine (AVM). Avalanche (AVAX) is flexible in that you can program using multiple languages, including EVM and WASM. The network was coded using the popular Go language.

Network participants can easily create and trade digital smart assets. These newly formed tokens can be tailor-made to suit the developer’s technical and regulatory requirements. In this way, Avalanche is ideal for the creation of DeFi platforms.

Avalanche (AVAX) Consensus Whitepaper

Avalanche (AVAX) Consensus Whitepaper

Avalanche (AVAX) Compliant Dapps

Avalanches network allows Dapp developers to code in complex custom rule sets. This move was wise as it allows these developers to create regulatory compliant assets. The coding can be set to describe how the asset is handled and traded. This approach makes it easy to ensure compliance can be met.

Deflationary

Avalanche is a deflationary blockchain. The network collects fees from various actions and then sends these coins to be burned. The burning of these tokens reduces the total amount of AVAX in circulation. In turn, the demand for these tokens can be controlled and prices stabilized in the future. 

How Does Avalanche (AVAX) Work

Avalanche introduces a triple-blockchain strategy to simplify conversions and development processes. The network also shares several features found in early blockchains like Bitcoin. Specifically, the UTXO model is the same. Also, the network reduces congestion further via a Segwit like protocol.

Subnet

One of the core components of Avalanche is the ability to build blockchains. These new blockchains are known as Subnets within the Avalanche ecosystem. Developers have full programmability over these blockchains. They can set up the networks with unique tokens, rules, and fee structures. Notably, anyone can create their own subnet by paying a subscription fee in AVAX.

X-chain

The first blockchain is known as the X-chain. X-chain is decentralized and designed to be easy to program. This network enables anyone to create and mint other smart digital assets. These new assets can be stablecoins, utility tokens, NFT’s, wrapped tokens, equity, and more.

C-Chain

The C-Chain was created to simplify the conversion for Ethereum Dapp developers. As a conversion chain, C-Chain is compatible with all vital Ethereum tooling. Users can migrate their Dapps to this blockchain seamlessly. The network supports popular Ethereum features such as MetaMask, Web3.js, Remix, Truffle Suite, and the Embark Platform.

P-Chain

The P-Chain is responsible for the utilities of the network. This chain is what’s used to coordinate Validators. The blockchain also plays a role in monitoring and the creation of new subnets. P-chain allows for the staking of tokens on the network.

AVAX Staking

Users can earn rewards in AVAX by staking on the network. Unlike its competitors, the hardware requirements are minimal for staking on Avalanche. You will need at least a dual-core processor, 4 GB Memory, and 40 GB SSD to run a Validator. On average, stakers receive rewards ranging between 9.69% and 11.54%. 

You must hold at least 2000 AVAX to qualify as a Validator on the network. Validators can validate multiple subnets but it’s also mandatory to validate the primary network. Additionally, regular users can delegate their tokens to a Validator and receive rewards for their participation.

Consensus

Avalanche operates as a DPoS (Delegated-Proof-of-Work) ecosystem. Validators secure the network and approve transactions. DPoS networks are much faster than PoS or PoW options due to their reduced consensus requirements. Avalanche’s blockchain is set up to accommodate millions of Validators all participating in consensus. This strategy provides layers of decentralization.

AVAX

AVAX is the main cryptocurrency of the Avalanche ecosystem. Users receive rewards and pay fees using this toke. In total, there are only 720 million AVAX tokens scheduled for issuance. Of these, 360 Million tokens were minted at launch. According to the platform’s Tokenomics, the other 360 million are earmarked as staking rewards.

Avalanche (AVAX) Features

History of Avalanche (AVAX)

Avalanche had been in the works for over a year before it launched its mainnet in September 2020. The project was created by Ava Labs. Notably, this firm is led by Cornell researcher, Emin Gün Sirer. 

Avalanche started running out of the gate. The platform’s public token sale raised $42 million in 4.5 hours. Impressively, there were some notable participants include the venture firm, Andreessen Horowitz and participants from an Ethereum Genesis address.

How to Buy Avalanche (AVAX)

Avalanche (AVAX) is available on the following exchanges:

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 exchange offers trading access to over 190 countries including Australia, Canada, Europe, and is our most recommend exchange for USA residents. (Excluding New York & Washington state)

Bitstamp – Founded in 2011, Bitstamp is one of the oldest & most trusted exchanges in the world. They currently accept Canada, UK & USA residents excluding the states of Alabama, Hawaii, Idaho, Louisiana, Nevada,  & New Jersey.

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

BinanceBest for Australia, Canada, Singapore, UK and most of the world. USA residents are prohibited from buying most tokens. Use Discount Code: EE59L0QP for 10% cashback off all trading fees. 

KuCoin – This exchange currently offers cryptocurrency trading of over 300 other popular tokens.  It is often the first to offer buying opportunities for new tokens.  This exchange currently accepts International & United States residents.

WazirX – This exchange is part of the Binance Group, which ensures a high standard of quality.  It is the best exchange for residents of India.

Uphold Disclaimer: Assets available on Uphold are subject to region. All investments and trading are risky and may result in the loss of capital. Cryptoassets are largely unregulated and are therefore not subject to protection.

How to Store Avalanche (AVAX)

If you seek to make a major investment in AVAX or if you are planning on HODLing this crypto for long periods of time, a hardware wallet is the best option. Hardware wallets keep your crypto stored offline in “cold storage.” This strategy makes it impossible for online threats to access your holdings. The Ledger Nano S or the more advanced Ledger Nano X both support Avalanche (AVAX).

Avalanche (AVAX) – Enterprise Blockchain 2.0

Avalanche provides a unique feature set that makes it ideal for enterprise-level blockchain creation. The inclusive nature of the blockchain, coupled with its technical aspects, makes it stand out in the sector. You can expect to see more interest in this project as Ethereum developers continue to seek out more cost-effective alternatives.

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