Avalanche is an open-source blockchain with smart contracts that is decentralized, and it’s the fastest smart contract platform when it comes to blockchain industry. The Avalanche native token is AVAX and it’s a Proof-of Stake (POS) Layer 1 blockchain. The two main use cases for the Avalanche blockchain are for creating subnets and also creating decentralized applications.
The Avalanche has an impressive TPS of 4,500 (Transaction per Second) and also has what they call transaction finality at 2 seconds compare to other blockchain like Bitcoin that has 1 hour and Ethereum that has 6 minutes. This makes the Avalanche blazingly fast. The Avalanche also has a low cost fees compare to the likes of Bitcoin and Ethereum. Depending on the transaction, the average fee is $0.05 - $10 whereas Ethereum average fee is $20 for normal transfers. The Avalanche is also eco-friendly.
The Native Token (AVAX)
The native token used on the Avalanche platform is AVAX and there are 720 million AVAX tokens in total and during its launch 360 million tokens were issued the next 360 million are scheduled to be used as reward for stakers. One disadvantage about the AVAX token is that, it is deflationary in the sense that over a period of time the supply is set to go down because the transaction fees are not redistributed to validators, instead they are being burned.
How it works is that, aside the primary blockchain, Avalanche also uses additional three separate blockchains but the primary blockchain is in charge of validating all the transactions done on the sub-chains. The sub-chains are X chain, C chain and P chain.
X chain: The X chain is also known as the Exchange chain API; it is used for setting conditions and rules for the creation and trading of digital assets on the Avalanche platform and when needed to set time and location restrictions on an asset, they are done with this chain. The Exchange Chain also runs as an instance of the AVM (Avalanche Virtual Machine.
C chain: The C chain is also known as the contract chain API; the C chain is the one in charge of smart contract executions and it’s also compatible with both the native Avalanche and the ERC-20 contracts. The C chain use a snowman consensus protocol which is more efficient and optimized for smart contract functionality and speed as well as security for cross compatibility with Ethereum. The Contract Chain also runs as an instance of the EVM (Ethereum Virtual Machine.
P chain: The P chain is also known as Platform Chain API, just like the X chain, it is used for setting conditions but with parameters for creating new blockchains to be built on Avalanche ecosystem. The P chain also uses snowman consensus protocol.
There are many problems existing on a blockchain network but with Avalanche most of these problems are solved. Some of the problems some blockchain are facing due to the popularity of them are traffic and making the network congested like Bitcoin and Ethereum where users interact with crypto every minute. Avalanche has tackled this problem because of the Snowman Consensus Protocol it uses increasing transaction capacity. Users are also trooping to Avalanche because of its affordable fees in transactions just as we discussed compared to Ethereum and Bitcoin. We have also seen users complain of the high gas fees of Ethereum.
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