Avalanche has established itself as the most scalable among its peers, despite the many challenges commonly associated with layer-1 blockchains.
Some of the most promising value propositions of Avalanche include its ability to offer a low-latency block time up to one second, compatibility with Ethereum Virtual Machine (EVM) and, most importantly, a suitable user experience that edges out the majority of its peers. Just before we proceed to unpack the subject matter, let’s take a look at a brief history of the layer-1 blockchain.
Brief history of Avalanche
Avalanche is one of two portfolio projects (together with Ryval) developed by Ava Lab – a blockchain company based in Brooklyn. A team of computer specialists, including Emin Gun Sirer, Kevin Sekniqi, and Ted Yin, co-founded the company in 2018, setting the record as the first scalable layer-1 blockchain.
Prior to the launch of Avalanche, most layer-1 blockchains encountered scaling issues, necessitating the integration of layer-2 blockchains in most situations. As a result, there were no major attempts to create a scalable layer-1 blockchain from scratch.
However, Ava lab, made up of more than 50 experienced tech specialists, took a new approach that is quite unique from anyone that has been previously adopted by other layer-1 blockchains.
Specifically, Avalanche made use of three separate blockchains on its platform all of which operate as one and is powered by its native token, AVAX. Likewise, by adopting multiple blockchain infrastructures, Avalanche employs multiple consensus mechanisms which further make it a more superior blockchain network among its peers.
What is Avalanche?
Avalanche is a fast-growing layer-1 proof-of-stake (PoS) blockchain and smart contract platform that aims to address a major pain point in blockchain dilemmas – blockchain scalability, for example, without giving up decentralisation.
Avalanche employs a multiple blockchain architecture composed of ‘the X-chain,’ ‘C-chain,’ and ‘P-chain,’ three of which constitute the platform’s mainnet.
By leveraging multiple blockchain infrastructures, the platform enables the creation of custom and interoperable blockchain networks as well as, hosting numerous decentralised applications (dApps).
Also, unlike its fellow layer-1 blockchain counterparts, Avalanche is able to achieve a higher throughput of up to 4,500 transactions per second (TPS), edging out Polkadot which came close, by a margin of 3,000 TPS.
Because Avalanch is built on the most recent Byzantine fault tolerance protocol, it can achieve a very high throughput (BFTP). Among other things, BFTP guarantees a speedy validation process by establishing a consensus model known as randomisation, in which validators are selected at random for each transaction within the network.
How does Avalanche work?
Avalanche’s technical architecture is unique in the sense that it is currently the only blockchain that operates more than two blockchains in a single mainnet, while leveraging a proprietary Virtual Machine (VM), known as the Avalanche Virtual Machine (AVM).
The Avalanche mainnet is made up of three integrated blockchains which serve different purposes. The first, which is known as Exchange Chain (X-Chain) is used for creating and exchanging both the native asset, AVAX, and other digital assets. Notably, digital assets that are created in this context are compelled to follow the ERC-20 token standard.
The second, known as the Platform Chain (P-Chain) facilitates the creation of subnets (sidechains or smart contracts) which makes the integration of dApps possible, while the third chain known as Contract Chain (C-Chain) is responsible EVM (Ethereum Virtual Machine) contract execution. Basically, the C-Chain coordinates the network’s validators, track active subnets, and facilitate the creation of new ones.
While the X-Chain make use of Avalanch consensus protocol, both the C-Chain and P-Chain, on the other hand, uses a consensus mechanism known as the Snowman consensus protocol.
Specifically, the Avalanche protocol ensures that all validating nodes within the X-chain work in parallel to check other validators’ transaction confirmation randomly. In addition, it is responsible for improving speed and scalability across the integrated blockchains while running all the processes on a single mainnet.
Furthermore, Avalanche makes use of Snowball – an Ava Labs-designed Proof-of-Stake (PoS) consensus mechanism that requires users to stake AVAX in order to become transaction validators. To participate in consensus, validators must stake at least 2,000 AVAX tokens, or perhaps, have your AVAX delegated to a validator of choice.
Avalanch native token – AVX
Avalanch, like most decentralised protocols, has its own native asset called AVAX, which serves as the network’s utility token as well as other hosted subnets. Notably, the ERC-20 token allows for interoperability across subnets and the mainnet.
AVAX tokens can be staked by community members in order to become validators, who can earn up to 11% annual percentage yield (APY) in the long run.
Currently, AVAX boasts a maximum supply of 720 million tokens with an initial supply after the initial coin offering (ICO) pegged at 360 million. That said, all fees paid on the network being burned owing to the deflationary mechanism employed by the protocol.
Avalanche governance
Avalanche enables key network modifications to be implemented dynamically based on community members’ input. While a participant must have staked AVAX tokens, the implementation process is dependent on genuine activities like how active a node participates in the validation process.
Also, while proposals may be presented by any participating node, they undergo a system-wide voting procedure that is underpinned in the Avalanche consensus mechanism.
Ultimately, Avalanche’s EVM compatibility makes it a highly promising project that could see growing interest from dApp projects looking for a more scalable blockchain with reduced costs.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.