Avalanche is a Decentralized Finance (DeFi) platform that allows interoperability between third-party tokens. Essentially, Avalanche is a blockchain-based platform where issuers can transact their tokens and at a low cost. Thus, the Avalanche network has greatly improved the DeFi environment with a permissionless system where users can create their customized blockchains, both private or public. Being able to run subnets for private and public on Avalanche is the main differentiator of this network.
Whilst other blockchain platforms are taking the easy route and sacrificing decentralization and security to improve performance, Avalanche offers in excess of Visa’s level throughput with 4500 tps per subnet, where transactions are finalized in under a second and all whilst being able to scale to unprecedented levels of decentralization consisting of tens of thousands of nodes, even upwards to a million nodes all participating in consensus at the same time.
Avalanche network's cryptocurrency is called $AVAX. Let's look at $AVAX token economics:
- AVAX is the native token of the Avalanche platform.
- AVAX is a capped-supply token. Cap is 720M AVAX tokens, and 50% of those tokens (360M) will be on mainnet.
- AVAX serves as the base unit of account in the Avalanche network, provides the base security guarantees, pays for operations, and provides a wide suite of utility services.
- AVAX transaction fees are burned, increasing scarcity of AVAX.
The AVAX token is the native asset of Avalanche. Currently, its total supply makes up 720,000,000 tokens, and over 70,000,000 are in circulation. When a user transacts with AVAX, the amount is burned, which means the scarcity increases. This makes $AVAX deflationary token.
Token distribution is as follows:
Source: https://info.avax.network/
$AVAX token unlocking schedule:
Avalanche Mainnet launched on September 21, 2020. So month 0 on the chart above is September 2020.
Deflationary token, blockchain being a DeFi infrastructure, staking mechanism which decreases the circulating supply would make $AVAX a great cryptocurrency in the long term.
