What is Avalanche? Introduction to AVAX token

1. What is Avalanche?

Avalanche (AVAX) is a Layer 1 blockchain innovation crafted by Ava Labs. This project serves as a facilitator for decentralized financial (DeFi) applications, managing financial assets, transactions, and diverse services. Notably, Avalanche operates on an open-source platform boasting remarkable scalability through the utilization of the Proof of Stake mechanism.

Within the Avalanche framework, developers can flexibly and efficiently create decentralized applications, fostering an environment conducive to the implementation of sophisticated financial applications. The ultimate goal is to establish Avalanche as a global asset trading platform, empowering individuals to engage in decentralized creation or transaction of various assets through the utilization of smart contracts.

2. Key highlights of AVAX

Avalanche has been designed with a focus on optimizing transaction speed, scalability, and security. The transaction processing speed of Avalanche is measured in seconds, allowing it to handle thousands of transactions per second. It maintains compatibility with thousands of validators, ensuring high performance.

The security of Avalanche is upheld through the support of smart contracts created and utilized in Solidity. Developers further enhance security using tools such as Remix, Metamask, Truffle, among others, originally developed for Ethereum. Users have the flexibility to create either shared or private blockchains based on their specific needs and objectives.

Avalanche facilitates the creation and transaction of digital assets with intricate terms in a user-friendly and expeditious manner. These assets can represent various forms such as capital, stocks, debts, real estate, and more.

3. How does AVAX work?

3.1. Primary Network

AVAX platform is a diverse network of blockchains, differing from unified networks where all applications share a single chain. In this structure, the Chief Executive Officer symbolizes the Primary Network, where blockchain consensus operates. Avalanche consists of three chains:

• The Exchange Chain (X-Chain): Manages native token operations and serves as a decentralized platform for trading digital assets.

• The Platform Chain (P-Chain): Coordinates validator and Subnet-level activities, overseeing subnets and enabling the creation of new ones using the Snowman consensus protocol.

• The Platform Chain (C-Chain): Hosts the Ethereum Virtual Machine, allowing the deployment of smart contracts through its API.

3.2. Subnet

In addition to the three primary chains, Avalanche incorporates Subnets. Subnets are subnetworks within the Primary Network of Avalanche, consisting of validators operating under a shared consensus mechanism to authenticate a set of blockchains. In simpler terms, one Subnet can authenticate multiple blockchains, while conversely, one blockchain is assuredly authenticated by one Subnet. Validators can participate in various Subnets. 

Benefits of Subnets:

• Scalability: Each Subnet is an independent entity with its execution thread, avoiding competition with other Subnets and conserving network resources. This facilitates the easy addition of new Subnets.

• Gas Cost Reduction: Blockchains without Subnets may encounter congestion. Offloading network traffic through Subnets helps reduce transaction costs.

• Increased Transaction Processing Speed: Subnets reduce response time, enhancing the system's ability to process transactions per second (TPS).

• Interactivity: Users can transfer assets across chains without interacting with the X-Chain, enhancing the interconnectedness of the Subnet system.

• Validator Choice: In a system divided into multiple Subnets like Avalanche, validators only participate in blockchains related to their area of interest. This prevents Avalanche validators from being overloaded by performance demands from unrelated blockchains.

• Customizable Expansion: Users have flexibility in adjusting Subnets based on specific requirements.

3.3. AVAX Proof of Stake

The Avalanche Consensus is a Proof of Stake consensus mechanism characterized by scalability, robustness, and decentralization.

Key features of the Avalanche Consensus include:

• Speed: Avalanche's consensus ensures swift and irreversible confirmation of transactions.

• Scalability: The consensus mechanism allows for high network throughput while maintaining low latency.

• Energy Efficiency: In contrast to other common consensus protocols, participating in Avalanche's consensus requires minimal computational effort.

• Adaptive Security: The Avalanche consensus mechanism is designed to thwart various attacks, including Sybil attacks and distributed denial-of-service (DDoS) attacks. Its nature ensures that consensus results reach the desired state, even in the face of network attacks.

4. Team

Ava Labs is founded by three individuals, notably Emin Gün Sirer, a seasoned computer scientist with a longstanding commitment to Bitcoin and decentralized networks. His interest in scaling Bitcoin led to the development of the Avalanche Consensus, enabling significantly higher transaction volumes than Bitcoin and rivaling Visa. Co-founders Kevin Sekniqi and Maofan “Ted” Yin also share affiliations with Cornell University. Sirer serves as an advisor to Yin, who is currently pursuing a Ph.D. in computer science. 

The team consists of experts in computer science, economics, finance, and law, collectively contributing to the project's multidisciplinary expertise.

5. Investments & Partners

Updating

6. Tokenomics

6.1. Key metrics

• Name: Avalanche

• Ticker: AVAX

• Blockchain: Avalanche CHAIN

• Proof of type: Proof of Stake (PoS)

• Algorithm: Snow

• Mining Commencement Date: July 15, 2020

• Circulating Supply: 360,000,000 AVAX

• Total Supply: 720,000,000 AVAX

6.2. AVAX token allocation

• Staking Reward: 50%.

• Team: 10%.

• Public Sale: 10%.

• Foundation: 9.26%.

• Community & Developer Endowment: 7%.

• Strategic Partners: 5%.

• Private Sale: 3.46%.

• Seed Sale: 2.5%.

• Airdrop: 2.5%.

6.3. AVAX token use cases

Transaction Fees: The AVAX token serves as the primary means of payment for settling transaction fees on the Avalanche network. These fees are utilized to compensate validators safeguarding the network and processing transactions.

Staking Rewards: AVAX holders can engage in staking on the network by locking their tokens to support network security and consensus mechanisms, earning staking rewards in return.

Governance: AVAX holders also possess the right to participate in governance, enabling them to contribute to decisions influencing the future development of the Avalanche network. This includes proposing and voting on changes to network parameters, fees, and protocols.

Bridging: AVAX can function as a bridge currency for transferring assets between different blockchain networks. This allows users to seamlessly move their funds between Avalanche and other compatible blockchains.

Developer Incentives: AVAX is utilized to incentivize developers to build applications on the Avalanche network. Support grants, rewards, and other incentives are often denominated in AVAX to attract developers and foster creativity.

7. How to earn and own Avalanche (AVAX)?

7.1. AVAX token wallets

AVAX tokens are primarily stored on the Binance exchange or directly withdrawn to the Trust Wallet supported by Binance for the AVALANCHE network. Additionally, the following wallets can be used:

• Avalanche Wallet: This is a straightforward and secure wallet designed to store Avalanche assets without the need for complex management.

• Ledger Nano S: This is an original hardware wallet created by Ledger. It provides a convenient starting point for your cryptocurrency journey, allowing you to purchase digital assets, secure your holdings, and manage them within a single application.

7.2.  AVAX token exchanges

Users have the option to engage in trading on various platforms such as Binance, OKx, Coin Tiger, FTX, Huobi Global, and others.

8. Roadmap

NFT Token: Issuance and Introduction of NFT Tokens

Atomic Commitment: The development of the AVAX data structure protocol into an atomic core network for blockchains parasitic on Avalanche.

Enhanced Governance: Avalanche enables stakeholders to determine critical economic parameters of the system, such as minimum staking amounts and reward ratios.

Performance Avalanche: Demonstrating the system with further enhanced protocols and processing speed.

9. Conclusion

Avalanche offers innovative solutions to the persistent issues of scalability, security, and decentralization. The AVAX token, serving as the backbone of this ecosystem, not only facilitates transactions but also plays a crucial role in the governance and incentivization mechanisms. The future holds promising potential for the continued growth and impact of Avalanche and its native AVAX token in the ever-expanding realm of blockchain and decentralized finance.