What is it?
Avalanche commonly known as AVAX launched in 2020 by the Ava Labs team is a cryptocurrency that possesses smart contract capabilities. Much like Ethereum, it uses smart contract to run decentralised finance (DeFi applications) or Non-fungible tokens (NFTs. Find out more here). However, unlike its competitor Ethereum, AVAX attempts to conduct faster transactions for a lower fee.
Additionally, AVAX sets itself apart by allowing its platform to be used to create subnets and custom blockchains.
The AVAX coin acts as the main currency on the Avalanche platform. Staking AVAX helps secure the network and users that do get rewarded with more AVAX.
A brief history of its incredible growth in 2021
In 2021, AVAX was classified as one of the fastest-growing DeFi platforms. With a market cap of $30.2 billion, the platform surpassed Dogecoin for a spot at the top ten cryptocurrencies of the year.
The growth of Avalanche comes at quite a surprise as famous blockchains Bitcoin and Erthereum were experiencing drops. However, AVAX saw a growth of almost 60% during Bitcoin’s and Erethereum’s price correction.
What makes Avalanche so different?
Avalanche sets itself apart from competitors in the cryptocurrency industry by its unique structure. Unlike common DeFi platforms with one blockchain, AVAX possesses three. This helps increase its scalability and transaction speed through the interoperability of blockchains.
A few features that make it unique include:
- The model – the platform makes it possible for anyone to use the building blocks to create their own public or private blockchain. The developer also possesses full control over their smart contract, meaning they can control who can view/interact with the dApp. Moreover, it allows for DeFi apps via the creation of digital assets.
- Secure- AVAX provides users with a Proof of Stake consensus which is faster than the Proof of Work used by Bitcoin and Ethereum.
Who is backing it?
As one of the fastest-growing cryptocurrency blockchains, Avalanche raised almost $230 million in private sales of AVAX tokens. Big investors included major companies such as Polychain and Three Arrows Capital. Moreover, crypto custody firm BitGo enlisted its support in the coin AVAX.
What the future holds for Avalanche
With the increasing popularity and hype around DeFi platforms and NFTs paired with Avalanche’s rising visibility and fast transaction times, it can be said that AVAX has a bright future ahead. However, with this an increase in competition is certain and Avalanche will need to move forward to create a more secure environment for its users.
