You may think the layer-1 war is over, and that Ethereum (ETH) won it, since the so-called Ethereum killers like Solana (SOL) are much smaller in TVL (Total Locked Value) and Ethereum continues to develop a complete ecosystem with layer-2s which would be better than most of Ethereum killers...
However, the goal of the other layer-1 chains is not only to compete against Ethereum, but to offer complementary options which might be more adapted to some use cases than ETH.
One of these layer-1 chains is Avalanche (AVAX). Let's look at the pros and cons.
Pros
- Avalanche C-chain is cheaper to use and faster than Ethereum mainnet
- Avalanche is one of the most decentralized blockchains, with thousands of nodes and a Nakamoto coefficient higher than Ethereum...
- As it is EVM (Ethereum Virtual Machine) compatible, it supports most ERC-20 tokens and hence offers a lower cost alternative to Ethereum for DeFi
- They recently signed a partnership with Amazon which announced that they will launch their own metaverse project using some layer-1 blockchains...
Cons
- Most nodes are in datacenters...
- It is one more EVM compatible blockchain, without any clear differentiating factor...
- Avalanche founder has been involved in a scandal since he would have paid lawyers to discredit competitors
- AVAX inflation rate is really high
Why I have Avalanche in my layer-1 portfolio
There are mostly two reasons:
- GMX.io DeFi dapp, that I prefer to use on Avalanche rather than on Aribtrum
- Benqi lending protocol, which allows to lend sAVAX (liquid staked AVAX) to borrow USDC which can be swapped to GPL to earn yield interests on GMX.io...
The next layer-1 article will be about the Binance Smart Chain.
Disclaimer: this article does not contain any financial advice. The information is provided for general informational and educational purposes only.
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