Avalanche is an open-source platform for launching decentralized applications and it focuses on blockchain interoperability. The public token sale of the project ran in the month of July 2020 and the mainnet was launched in September 2020. Avalanche has a unique consensus protocol and it is the first smart contracts network to offer transaction finalization under one second as standard. Avalanche supports the entire Ethereum development toolkit. It is a much-hyped project and a record 1,000+ block producers across the globe participated during its testnet. Six months have already passed since the mainnet launch of Avalanche. The native token AVAX got listed in many big exchanges and currently, it enjoys a top 50 rank as per market capitalization. The project has attracted many people to participate in developing communities and there has been a good range of strategic partnerships across the DeFi ecosystem. Is Avalanche completely ready for DeFi now?
Image source - Avalanche consensus comparison
Avalanche has 3 built-in blockchains: Exchange Chain (X-Chain), Platform Chain (P-Chain) and Contract Chain (C-Chain). All these blockchains are validated and secured by the Primary Network. Avalanche is a PoS blockchain. AVAX has a maximum supply of 720 million AVAX and 78% of the circulating supply is staked. When a validator validates the Primary Network, it receives validation rewards in AVAX. All fees are totally being burnt now. The minimum amount that a validator must stake is 2,000 AVAX and the minimum amount that a delegator must delegate is 25 AVAX. Avalanche’s subnet architecture is regulatory environment compliant. The validators must pass KYC/AML checks and hold certain licenses.
AllianceBlock, a globally compliant decentralized capital market, declared to integrate its DeFi product suite into Avalanche. Their blog post said. “Upon completion of the integration, users will be able to access AllianceBlock’s DeFi Investment Terminal, compliant P2P financial services, NFT capabilities, trustless KYC and identity verification solutions, and derivative pricing engine and analytics on Avalanche.”
Pangolin Exchange is an AMM based DEX like Uniswap powered by Avalanche. Currently, it has $200M+ liquidity. Pangolin brings the best trading opportunities with low slippage to find and maximize your yield. Sushiswap also recently expanded to Avalanche. The users can perform swaps and liquidity mining with Sushiswap on Avalanche but it costs lower fees and gives faster transaction finality. CTO of Sushiswap said,” “We look forward to our deployment of Sushi on Avalanche as an important step towards TVL, liquidity, and volume expansion.” Snowball is a project deployed on Avalanche that offers anyone to buy and sell stablecoins with near-zero fees and virtually no slippage. Stablecoin holders get excellent returns by staking assets in StableVault and also access yield farming strategy. Snowball has a $22M TVL as of now.
RAI Finance is another project which is integrating with Avalanche to expand its platform's cross-chain trading capabilities. The integration is supposed to be completed in Q2 2021 and it will enable its users to access assets on Avalanche through cross-chain asset bridges. Avalanche will get decent asset fluidity due to this.
The smart contract activity on Avalanche has boomed recently. Avalanche-Ethereum Bridge or AEV has seen good success and TVL has exceeded $100B. It is important to note that the sector’s TVL was below $20M just a few months ago. Low transaction fees of Avalanche are obviously beneficial for the users. Unlike many other blockchains, there is no need to wait for transaction confirmation as everything happens instantaneously. Avalanche can be accessed through Metamask and it helps easy onboarding for the Ethereum users. This is a project which wants to challenge the doctrine that a blockchain must be slow and not scalable to maintain security and decentralization. Solidity works wonderfully for the Ethereum developers and they can build on Avalanche due to its compatibility. 4,500+ TPS of the blockchain is attractive and it has delivered working smart contracts and platforms very quickly unlike many other top projects. The great technical specifications and growing ecosystem of Avalanche can make wonders along with time. So many Ethereum killers are competing nowadays to snatch market share from ‘the world computer’ and only the true innovators will succeed. Avalanche surely displays some advantages with its novel DAPP protocol. Decentralized finance must be interoperable, frictionless and more composable and that’s why Avalanche’s use case looks strong.
Note: This post was first published here for Cryptowriter in association with voice.com.