Dennis Y.Tue, Nov 2, 2021 6:10 PM
Rolling Stocks: Avalanche Crypto Review - Bridge & Ecosystem
Blockchain platforms with smart contracts are becoming key players in the digital industry. Many users have appreciated the tremendous opportunities that smart contracts bring to the financial services sector through DeFi projects. Today, financial products that are independent of centralized organizations have already become the norm. The main goal of modernizing the financial system with distributed ledger technology is to speed up transactions between users.
Money needs to get from sender to receiver as fast as possible, but traditional blockchain ecosystems still don't have enough bandwidth. Startup Avalanche is taking on the challenge. Avalanche offers a new consensus protocol that can be used to run DeFi products with high transaction speeds. In this review, we will talk about the resources and capabilities of the Avalanche ecosystem project. Let's try to figure out if it can compete with other blockchain leaders, become a basic platform to expand the DeFi sector, and what are the expectations for its price.
What Is Avalanche Really Is?
Avalanche is an open-source platform for running dApps (decentralized applications), financial assets, trading, blockchain deployment and other services.
The goal of the project is to solve the problem of the fragmented digital asset industry, which is full of obstacles arising from regulatory and geographical differences in the projects. The developers want to create a single global financial market where users can conduct transactions with cryptocurrencies smoothly.
The platform aims to become something of a global network for the exchange of digital assets, allowing anyone to create, trade-in any form, and control them in a decentralized way using smart contracts and other advanced technologies.
Avalanche launched its network in September 2020. The platform's native token, AVAX, acts as a control in Avalanche and also functions as a rewards and payment system for users.
Avalanche is one of the fastest smart contract blockchain platforms on the market. The speed of the system is about 4,500 transactions per second. This is how the developers themselves present the startup on its official website. Ava Labs developers claim that Avalanche provides transaction full completion in less than one second as standard.
Here's the official brief video presentation of the project.
Avalanche Blockchain Founders
Ava Labs has three co-founders, including Emin Gun Sirer, a great computer scientist long associated with crypto and decentralized networks.
Sirer has long been involved in Bitcoin scaling solutions, and Avalanche Blockchain Consensus is a direct extension of that research, allowing transaction volumes to be much higher than other crypto and compete with payment systems such as Visa.
The co-founders Kevin Sekniqi and Maofan "Ted" Yin are also affiliated with Cornell University. Sirer is an advisor to Yin, who is getting his Ph.D. in computer science.
The rest of the team consists of experts in computer science, economics, finance, and law.
Avalanche Security Fundamentals
Avalanche is based on a PoS protocol that rewards users for stacking coins. Earlier PoS networks have been criticized because of their low cost of attack, which in some cases has exposed serious vulnerabilities.
According to Ava Labs, Avalanche Blockchain Solutions solve this problem by changing the governance so that an attacker cannot covertly reach the necessary consensus.
Avalanche-Ethereum Bridge and How It Works
In early 2021, Avalanche launched its first Bridge that enabled a two-way asset flow between Avalanche and Ethereum. The Bridge secured Avalanche success on the market and attracted new investors to the platform. In the first months after the launch, the Bridge saw more than $1bll asset transfers via the Avalanche Bridge. Since then, the service has only grown bigger and expanded its features, creating innovative cross-chain interoperability.
To ensure seamless flow and increase liquidity, Wrapped AVAX has been implemented. WAVAX enables interoperability across Avalanche and Ethereum ecosystems. The ERC-20 standard token significantly simplifies the experience for AVAX holders. Asset transfers are carried out between X-Chain (Exchange Chain) and C-Chain (Contract Chain) via the Avalanche Wallet.
How to Bridge from Ethereum to Avalanche
With the help of the Avalanche Bridge, users can transfer ERC-20 standard tokens created on Ethereum to Avalanche’s C-Chain and vice versa. To do that, you first need to connect your wallet using Metamask, Coinbase Wallet, or WalletConnect.
Once you have logged in to your wallet, choose the network you would like to transfer your assets from. Select your assets and the amount you want to transfer using the Bridge.
Choose Transfer and sign the transaction pop-up prompt. Wait for the transaction to complete on both networks. It can take anywhere from 30 seconds for Avalanche and around 10-15 minutes for Ethereum to process the transaction.
Before starting a transaction, make sure you have AVAX tokens in your wallet to pay for your transaction fee.
During the last few months, the cross-chain bridge trend has taken off in the finance world. The Avalanche network, being one of the most popular platforms among crypto holders, has also undergone a couple of upgrades and improvements. The Avalanche Bridge is now supported by multiple blockchains, allowing users to transfer their assets between them while also making Avalanche the prime figure in the process.
The new bridge is built using Intel SGX Enclave technology, which, according to experts, is a breakthrough in secure and efficient computing. Moreover, transaction fees are now expected to be one of the lowest on the market.
In late September 2021, Binance launched the development process of its own bridge to Avalanche that will allow AVAX holders to skip the process of logging into their wallets entirely. By creating a BSC to AVAX bridge, it will be possible to transfer BEP2 or BEP20 tokens to the ERC-20 network and back.
A significant number of coins have already partnered with Avalanche, and the number only keeps growing. One of them is Shiba Inu. The meme token is already supported by the Avalanche Bridge, making it possible for SHIB tokens to be transferred between Ethereum and Avalanche ecosystems.
Comparing to Avalanche Blockchain to other Blockchains, Pros and Cons
The Avalanche official site contains a great table with the comparison of Avalanche vs. Other Leading Crypto Projects. You can see it below:
Avalanche has its own consensus network, AVA. It can be used to develop dApps (decentralized applications) to further improve the platform. With AVA, users can also create their own networks with the infrastructure they need.
The combination of capabilities for seamless asset transactions has become a reason to call Avalanche the Asset Internet Project.
Avalanche vs. Ethereum
The project's main competitor is Ethereum. Unlike its opponent, Avalanche offers more tools to form a barrier-free digital environment in the market of digital assets. The project also wins over Ethereum because it was originally built based on the PoS algorithm. And Ethereum just tries to use PoS super carefully.
There are already several projects on the market that were built based on Avalanche. One of them is Pangolin DEX, a decentralized crypto exchange. The platform allows the trading of digital assets, which are hosted on Avalanche and Ethereum.
Avalanche vs. Solana
Speaking about the Avalanche vs. Solana, there's no point in opposing them to each other. These projects are built on completely different technologies. However, they are both aimed at creating a strong infrastructure and ecosystem. At the same time, Solana has a strong emphasis on high network and transactions speed. Theoretically, there are enough clients for each.
As for the market prospects for both projects and tokens, you can see from the trends that both projects feel extremely confident - the tokens are growing, the projects are perfectly capitalized.
History, News and Development Milestones of Avalanche
When working on the startup, the developers used the digital currency Karma, which appeared before Bitcoin.
In 2018, the developers presented the concept of the future project to the public. The team commissioned the Avalanche Foundation, a nonprofit organization, to oversee the development of the startup.
The testnet of the project was launched in April 2020. In the summer of the same year, the developers held a token sale. According to the project's blog, 72 million AVAX tokens worth $42 million were sold out in 4.5 hours. Investors gained access to them after the launch of Avalanche, which the development team implemented a few months later - in September 2020.
The project team also held several private token sales. For example, in June 2020, the developers raised $12 million, and in September 2021, the Avalanche team received $230 million. The funds were consumed by the developers to evolve the project.
Avalanche investors include Andreessen Horowitz, Galaxy, Bitmain, NGC, Dragonfly Capital, Polychain, Three Arrows Capital and other major market players.
In August, the Avalanche Foundation created the $180 million Avalanche Rush fund, which will also be used to buy tokens and fund DeFi projects.
The developers continue to improve the project. For example, at the end of September 2021, the project team called on users to update the node on the background of protocol optimization.
Avalanche Cryptocurrency (AVAX) and Project's Tokenomics
The system analyzes the amount of assets in users' wallets in order to evenly and fairly distribute the reward for processing network transactions using computing devices among the platform's audience.
Avalanche crypto can be staked. Technically, staking replaces the project with classic mining, which serves as a mechanism in cryptocurrency networks such as Bitcoin to release new coins into the market.
Despite the platform's young age, AVAX has consistently ranked among the most capitalized cryptocurrencies. Avalanche's issuance is limited. There will be 720 million coins in total. The genesis block contained half of the issue. The second half of the issue will be issued according to the curve detailed in Avalanche's white paper.
The key difference between the AVAX issue and Bitcoin is that the AVAX release rate can be changed due to the community's decisions. The general supply cannot be changed. All that can be changed is the rate at which the supply limit is reached.
In contrast to Bitcoin and many other networks, transaction fees are "burned" to increase the token deficit. This process is offset by the issuance of new coins.
The transaction fees themselves depend on the type of transaction performed by an AVAX transaction in the Avalanche blockchain network.
Avalanche Price Prediction
AVAX in many ways repeats the movement patterns of other, more capitalized digital asset market participants. For example, the token went down in early summer amid pressure on the crypto industry from Chinese regulators. As the market recovered, AVAX also showed positive momentum.
At the moment of writing, AVAX token is on #16 at CoinMarketCap with Avalanche price of $62.56, and a current market cap of $13,783,055,287. Circulating supply: 220,286,577.21 AVAX.
Since the start of AVAX exchange trading, its basic support lines are:
- $55. This is the nearest support line, and its relevance is confirmed by the fact that in February, in the area of the previous ATH, it was a strong resistance line.
- $9.5 (most relevant for summer 2021).
- $3.5. It was extremely relevant until the end of 2020. Now it will only be relevant if the market falls very hard.
On the basis of strong positive Avalanche blockchain news (see above) ATH was September 23, 2021 when Avalanche price almost reached the $80 mark.
Considering the active development of the Avalanche blockchain ecosystem, as well as the possibility of stacking and good prospects for buying AVAX tokens to enter projects based on Avalanche and for governance, the price in the foreseeable future is able to beat its ATH. Therefore, we would not consider the $80 price as a strong resistance level. Moreover, Avalanche price is now moving in an upward bullish trend with quite a clear trend line (see screenshot below).
AVAX Price Prediciton, timeframe: 1 day. Source: TradingView.
We can assume that the coin will continue to repeat the patterns of market behavior. In this case, it is important to follow the updates of the project, because they can also affect the movement of AVAX. You can do that with the help of the Avalanche blog, for example, or Avalanche Crypto Reddit section. Constant developments and feature updates encourage users to expect further price increases.
Where To Buy Avalanche Coin?
You can find the up-to-date list of platforms for buying AVAX tokens (with prices, volume and dynamic) at Coingecko, at the "Markets" section. At the moment, there are more than 80 platforms for AVAX.
Unlike most cryptocurrencies, Avalanche is a technologically strong project that is building a powerful ecosystem. The project is actively developing in 2021, receives large investments, its market cap and circulating supply constantly grow, and the startup plans to develop further. Because of this, AVAX token has excellent future prospects.