What is Avalanche (AVAX)

Avalanche is an open-source platform for building decentralized applications in one interoperable, decentralized, and highly scalable ecosystem. Powered by a uniquely powerful consensus mechanism, Avalanche is the first ecosystem designed to accommodate the scale of global finance, with near-instant transaction finality. It was conceived and developed by Ava Labs, a team led by Cornell computer scientist Emin Gün Sirer, known for his work in peer-to-peer systems and cryptocurrencies.

How does Avalanche(AVAX) work?

The Primary Network

Avalanche is a heterogeneous network of blockchains. As opposed to homogeneous networks, where all applications reside in the same chain, heterogeneous networks allow separate chains to be created for different applications.

The Primary Network is a special subnet that runs three blockchains:

• The Contract Chain (C-Chain)
• The Platform Chain (P-Chain)
• The Exchange Chain (X-Chain)

Avalanche Mainnet

The Avalanche Mainnet refers to the main network of the Avalanche blockchain where real transactions and smart contract executions occur. It is the final and production-ready version of the blockchain where users can interact with the network and transact with real world assets.A network of networks, Avalanche Mainnet includes the primary network formed by the X, P, and C-Chain, as well as all in-production subnets. These Subnets are independent blockchain sub-networks that can be tailored to specific application use cases, use their own consensus mechanisms, define their own token economics, and be run by different virtual machines.

Fuji Testnet

The Fuji Testnet serves as the official testnet for the Avalanche ecosystem. Fuji's infrastructure imitates Avalanche Mainnet. It's comprised of a Primary Network formed by instances of X, P, and C-Chain, as well as many test Subnets. Fuji provides users with a platform to simulate the conditions found in the Mainnet environment. It enables developers to deploy demo Smart Contracts, allowing them to test and refine their applications before deploying them on the Primary Network.

History of Avalanche

• 2018: A whitepaper titled "Snowflake to Avalanche: A Novel Metastable Consensus Protocol Family for Cryptocurrencies" is released, introducing a unique consensus mechanism. The paper is published under the pseudonym "Team Rocket."
• 2019: Ava Labs, founded by Emin Gün Sirer, Kevin Sekniqi, and Maofan "Ted" Yin, starts developing the Avalanche platform.
• 2020:
• July: Avalanche conducts a token sale, raising around $42 million in a short span.
• September: The mainnet of Avalanche is launched with three interoperable chains: X-Chain, P-Chain, and C-Chain.
• 2021: Avalanche's ecosystem sees a surge in adoption, especially in the decentralized finance (DeFi) space. The Avalanche Rush program, a significant liquidity mining incentive, is announced to further boost DeFi projects on the platform.
• 2022: Avalanche stands as one of the prominent smart contract platforms in the crypto space, with a vibrant ecosystem of projects and dApps.

Tokenomics

Token Utilities

AVAX is a capped-supply (up to 720M) resource in the Avalanche ecosystem that's used to power the network. AVAX is used to secure the ecosystem through staking and for day-to-day operations like issuing transactions.

AVAX represents the weight that each node has in network decisions. No single actor owns the Avalanche Network, so each validator in the network is given a proportional weight in the network's decisions corresponding to the proportion of total stake that they own through proof of stake (PoS).

Any entity trying to execute a transaction on Avalanche pays a corresponding fee (commonly known as "gas") to run it on the network. The fees used to execute a transaction on Avalanche is burned, or permanently removed from circulating supply.

Token Distribution

• Staking Reward: 50%
• Team: 10%
• Public Sale Option A1: 1%
• Public Sale Option A2: 8.3%
• Public Sale Option B: 0.67%
• Foundation: 9.26%
• Community & Developer Endowment: 7%
• Strategic Partners: 5%
• Private Sale: 3.5%
• Seed sale: 2.5%
• Airdrop: 2.50%
• Testnet Incentive Program: 0.27%

Why Is Avalanche (AVAX) Valuable?

Blazingly Fast

• Avalanche employs the fastest consensus mechanism of any layer 1 blockchain. The unique consensus mechanism enables quick finality and low latency: in less than 2 seconds, ustheer's transaction is effectively processed and verified.

Built to Scale

• Developers who build on Avalanche can build application-specific blockchains with complex rulesets or build on existing private or public Subnets in any language.
• Avalanche is incredibly energy-efficient and can run easily on consumer-grade hardware. The entire Avalanche network consumes the same amount of energy as 46 US households, equivalent to 0.0005% of the amount of energy consumed by Bitcoin.
• Solidity developers can build on Avalanche's implementation of the EVM straight out-of-the box, or build their own custom Virtual Machine (VM) for advanced use cases.

Advanced Security

• Avalanche consensus scales to thousands of concurrent validators without suffering performance degradation making it one of the most secure protocols for internet scaling systems.
• Permissionless and permissioned custom blockchains deployed as an Avalanche Subnets can include custom rulesets designed to be compliant with legal and jurisdictional considerations.

Highlights

• Whitepaper Release (2018): The introduction of the Avalanche consensus mechanism through a whitepaper titled "Snowflake to Avalanche: A Novel Metastable Consensus Protocol Family for Cryptocurrencies." This paper was anonymously published under the pseudonym "Team Rocket."
• Foundation of Ava Labs (2019): Emin Gün Sirer, Kevin Sekniqi, and Maofan "Ted" Yin founded Ava Labs, the company behind Avalanche's development.
• Token Sale (July 2020): Avalanche's public token sale took place, and the project raised approximately $42 million in a few hours, showcasing the anticipation around the project.
• Mainnet Launch (September 2020): The official launch of Avalanche's mainnet occurred, introducing three interoperable blockchains: X-Chain, P-Chain, and C-Chain. The C-Chain, in particular, was Ethereum-compatible, allowing for easy porting of Ethereum applications.
• Ecosystem Growth (2021): Throughout 2021, Avalanche witnessed a significant uptick in the number of decentralized applications (dApps), particularly in the decentralized finance (DeFi) space. Many projects either launched or migrated to Avalanche, citing its speed and scalability as reasons.
• Avalanche Rush Program (2021): A $180 million liquidity mining incentive program called Avalanche Rush was announced to attract top DeFi projects to its platform, further enhancing the ecosystem's growth.
• Partnerships & Integrations: Avalanche continued to form strategic partnerships and integrations with various crypto projects, wallets, and exchanges, amplifying its reach and usability in the broader crypto space.
• Avalanche Bridge (2021): The launch of the Avalanche Bridge, an improvement over the previous Avalanche-Ethereum Bridge (AEB), provided a faster and cheaper way for users to transfer assets between Avalanche and Ethereum.
• Ecosystem Grants & Funding: To further stimulate growth and innovation on its platform, Avalanche initiated various grant programs, offering funding to startups, developers, and initiatives building on Avalanche.
• Community & Developer Initiatives: With the establishment of hackathons, developer boot camps, and educational resources, Avalanche worked towards fostering a strong community and developer ecosystem.