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What is Avalanche?

What is Avalanche?

The Avalanche blockchain platform was launched in 2018, aiming to create a single financial marketplace for all users free of geographical and regulatory restrictions. The platform's toolkit allows the development of smart contracts and DeFi-applications.

Full name of the company: Ava Labs

Foundation date: 2018

Founder: Emin Gün Sirer (Turkey)

Capitalization: more than 21 billion dollars

Legal status: registration in the USA (New York)

Company products

Avalanche blockchain is an open-source platform that combines scalability and interoperability. It is designed to run DeFi applications, create private blockchains within a single ecosystem.

The system's speed is approximately 4,500 transactions per second, and it is considered one of the fastest platforms in the smart contract market.

The project's core mission is to deal with crypto industry fragmentation, where one faces geographical and regulatory hurdles. Avalanche developers offer to work within a single financial market, where all participants can conduct any cryptocurrency transactions.

The Avalanche architecture is represented by a Primary Network and many subnets called Subnet.

Primary Network consists of 3 blockchains:

  • P-Chain – metadata storage, validator coordination control, subnetwork tracking;
  • C-Chain – creating smart contracts that are compatible with the Ethereum network;
  • X-chain – access to tools for exchanging data between subnets and creating tokens and NFTs.

Each Avalanche member can create a subnet with a 0.01 AVAX fee for providing such service.

All nodes undertake to validate transactions on the main network and also optionally on subnets. Subnet creators can add various parameters, such as running multiple blockchains, assigning validator requirements, etc.

The Avalanche blockchain adopts the best features of the Nakamoto consensus, based on Proof-of-Work, and of the Proof-of-Stake-based classical algorithm. The Snow family of protocols is formed.

The Snow protocol verifies a transaction by deploying a subset of randomly chosen validators. They give a response whether the transaction is valid or not.

Each validator may be subjective about accepting or rejecting a transaction, so a majority vote makes the decision. The transaction processing requires a split second.

Avalanche possibilities in the DeFi sector:

  • Digital asset issuance;
  • Loans and credits;
  • Insurance;
  • Establishing a market for derivatives;
  • Creating decentralized exchanges;
  • Stablecoin creation;
  • Peer-to-peer payments.

Businesses and government agencies can benefit from the Avalanche network in such areas as:

  • Asset issuance and trading;
  • Fund management;
  • Document tracking;
  • Digital identification;
  • Access to the real estate market;
  • Loan services;
  • Intellectual property services.

Avalanche Coin (AVAX) is the network's native token used to ensure blockchain security as a transaction fee payment tool, reward validators, perform the platform's management function, and simultaneously act as the network's payment currency.

There are different ways to burn the coin, for example, via transaction fees, blockchain creation, and subnetworks. This reduces the total token offer to increase its deficiency, hence its value.

During the Avalanche network launch, 360 million tokens were issued (half of the scheduled volume). Another 360 million coins are mined with a certain frequency.

AVAX token is used for staking (annual return of 11%), commission payments, and settlements in the ecosystem subnetworks.

Avalanche Wallet is a cryptocurrency web wallet. Users can use it to connect to the ecosystem of decentralized apps.

The wallet has three types of addresses, namely, P-Chain, C-Chain, and X-Chain, each of which is designed for its own purposes, corresponding to the purpose of the network blocks. The X-Chain can be used to store cryptocurrencies, the P-Chain allows for staking, and the C-Chain is used to interact with smart contracts.

Tokens can be transferred between all addresses.

If you need to make an asset transfer, it is important to use a compatible blockchain. For example, C-Chain offers exchanges only for Binance and MetaMask wallets.

Avalanche Wallet offers storage for over 100 cryptocurrencies, and there is also a possibility to create NFTs.

Avalanche Bridge (AB) is a cross-chain technology that allows combining different blockchains and Avalanche. This bridge replaced the Avalanche-Ethereum Bridge (AEB), being faster and more secure.

AB transaction costs are 5 times cheaper than AEB, and users benefit from an improved interface. The cross-chain bridge is based on Intel SGX Enclave technology that allows to simplify transactions in a closed environment and provides protection against hacking.


2018 – Emin Gün Sirer, a Turkish-American programmer, developed the Avalanche project and created the Ava Labs organization, which formally managed the project.

That same year, the team presented the official version of the concept, followed by the appointment of the Avalanche Foundation, a nonprofit institution, as the curator.

2020 – in the spring, testing of the project and a token sale took place. It is known that 72 million issued AVAX tokens, estimated at a total of $42 million, were sold in the first 4.5 hours of trading. Спустя время разработчики привлекают 12 миллионов частных инвестиций на развитие.

Avalanche officially launched in the fall and also succeeded in securing another $230 million funding package from leading Andreessen Horowitz and Polychain companies.

2021 – The Avalanche Foundation was established to develop DeFi apps.

2022 – a $290 million developer incentive program was launched to develop functionality across all segments of the Avalanche ecosystem.

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