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What Is Avalanche (AVAX)?
Avalanche (AVAX) is a layer one blockchain that functions as a platform for decentralized applications and custom blockchain networks. It is one of Ethereum’s rivals, aiming to unseat Ethereum as the most popular blockchain for smart contracts. It aims to do so by having a higher transaction output of up to 6,500 transactions per second while not compromising scalability.
This is made possible by Avalanche’s unique architecture. The AVAX network consists of three individual blockchains: the X-Chain, C-Chain, and P-Chain. Each chain has a distinct purpose, which is radically different from the approach Bitcoin and Ethereum use, namely having all nodes validate all transactions. Avalanche blockchains even use different consensus mechanisms based on their use cases.
After its mainnet launch in 2020, Avalanche has worked on developing its ecosystem of DApps and DeFi. Different Ethereum-based projects such as SushiSwap and TrueUSD have integrated with AVAX. Furthermore, the platform is constantly working on improving interoperability between its ecosystem and Ethereum, like through the development of bridges.
Who Are the Founders of Avalanche?
Avalanche was launched by Ava Labs, founded by Cornell University professor Emin Gün Sirer, and Cornell University computer science Ph.D.’s, Kevin Sekniqi and Marfan “Ted” Yin. Gün Sirer is a veteran in cryptographic research, having designed a conceptual peer-to-peer virtual currency six years before the release of the Bitcoin whitepaper. He was also involved in work on Bitcoin scaling solutions and research on Ethereum before the infamous DAO hack in 2016.
From that research arose the whitepaper that led to the foundation of Ava Labs in 2018. The project closed a seed round in February 2019 that included Polychain, Andreessen Horowitz, and Balaji Srinivasan investors. AVAX closed its initial coin offering in 2020 in under 24 hours, raising $42 million.
What Makes Avalanche Unique?
Avalanche attempts to solve the blockchain trilemma, which posits that blockchains cannot achieve a sufficient degree of decentralization at scale. This is a consequence of high gas fees, as is often the case on Ethereum.
To solve this problem, Avalanche designed three interoperable blockchains.
- The Exchange Chain (X-Chain) is employed to create and exchange the native AVAX tokens and other assets. Similar to the ERC-20 standard on Ethereum, these tokens follow standardized rules. It uses the AVAX consensus mechanism.
- The Contract Chain (C-Chain) hosts intelligent contracts and decentralized applications. It has its own Avalanche Virtual Machine, similar to the Ethereum Virtual Machine, allowing developers to fork EVM-compatible DApps. It uses the Snowman consensus mechanism.
- The Platform Chain (P-Chain) coordinates network validators, tracks active subnets, and enables the creation of new subnets. Subnets are sets of validators, sort of like a validator cartel. Each subnet can validate several blockchains, but a blockchain can only be validated by one subnet. It also uses the Snowman consensus mechanism.
This division of computing tasks enables higher throughput without compromising on decentralization. For instance, private blockchains on the network could require its subnet’s validators to be sufficiently geographically decentralized or comply with specific regulations. Following this modular structure, Avalanche improves its interoperability with other blockchains wishing to integrate with the Avalanche ecosystem. Furthermore, the two different consensus mechanisms are designed with each blockchain’s requirements, further improving their efficiency.