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When we talk about Avalanche we refer to a consensus algorithm mechanism. This open source blockchain protocol hosts interoperable blockchains as well as decentralized applications and financial primitives.
One of the characteristics for which this protocol is best known is for becoming a competitor to the second blockchain with the largest market capitalization, Ethereum. This is because this network is compatible with the Ethereum Virtual Machine. This has generated confidence that this network can even host Ethereum network applications offering greater advantages.
In a few words, Avalanche is a platform oriented to the launch of DeFi world applications, financial assets and other services such as trades. The main objective of this platform is to act as a global asset exchange. This way it allows any user to trade any asset and launch their own. All this in a decentralized way by means of the well-known smart contracts and other modern technologies.
The Avalanche project has a total of three co-founders, they are Emin Gün Sirer, Kevin Sekniqi and Maofan. Emin is a veteran computer scientist who has long been associated with Bitcoin and decentralized networks. During his work studying Bitcoin he became concerned about Bitcoin’s scalability so he created Avalanche, the reward of his exhaustive research.
This new project allows a much higher total transaction volume than Bitcoin and could even be allowed to compete with VISA. The other two co-founders, Kevin and Maofan are also associated with the same university, Cornell. Behind this project there is a whole team consisting of experts in the fields of computer science, economics, finance and law. The company of this team is Ava Labs.
The project had its official beginnings in 2018 although Avalanche’s mainnet was launched on September 21, 2020 and its launch was a success. As expected, part of Avalanche’s funding was an ICO. The Ava Labs team scheduled a private sale of AVAX tokens for June 24, 2020 and clearly, it was a very successful ICO. According to information on their official blog, in the first sale targeted at a group of investors Ava Labs capitalized a total of $12 million.
Shortly thereafter, the team behind the project announced a public sale of AVAX tokens on July 22nd of the same year. This second sale raised a total of $42 million in less than four hours. Needless to say, the amount of coins earmarked for the sale sold out.
Not only a platform was launched, but also a native token called AVAX. This token is responsible for performing various tasks within the platform such as a reward and payment system for users.
How does Avalanche work?
As we already know, Avalanche is an open source platform aimed at launching decentralized applications in addition to new implementations on the blockchain. All this in an interoperable and, above all, highly scalable ecosystem.
Now, what makes this platform one of the most important with respect to smart contracts? This is the first platform that can confirm transactions in less than a second which gives it a remarkable advantage over the titan we all know as Ethereum. If that wasn’t enough, it also supports Ethereum’s development toolkit and offers the possibility for millions of validators to produce full blocks.
Avalanche has the capacity to process orders of a greater magnitude than the rest of the existing blockchain networks, we are talking about more than 4500 transactions per second. Another advantage it offers is greater security than 51% of existing networks.
The network implements a system based on the Proof of Stake mechanism where millions of users are allowed to be validators of operations managing to process thousands of transactions per second. This guarantees the high speed that competes with Ethereum when performing a transaction.
Under this system the Avalanche network allows incorporating other sub-networks that operate through virtual machines thus allowing interconnection with other blockchains in the form of bridges. Thus the platform supports trending markets such as the buying and selling of NFT tokens or the DeFi ecosystem.
Avax is the native token of the Avalanche platform. It is used to secure the network through staking, it also functions as a reward to incentivize users and pay network fees. AVAX provides a basic unit of account between the multiple sub-networks that are connected on the Avalanche platform.
Considering that the official launch of the Avax token is recent we can say that the token has evolved remarkably and has given enough benefits to its investors.
The token began trading on September 21, costing $4.6 per coin. In the first few days alone, the token was already 150% higher than the initial estimated price of $1.7.