На фоне недавней мании децентрализованных финансов (DeFi) на поверхность вышел ряд альтернатив Ethereum. Недавно мы стали свидетелями одного такого ошеломляющего ралли в Солане и его пути к первой десятке криптовалют по рыночной капитализации.
However, we will be talking about the new don in DeFi town and it’s none other than Avalanche. AVAX, the native token of Avalanche has witnessed a solid rally recently. Over the last two months since mid-July 2021, the AVAX token price has surged all the way from under $10 to now above $70.
Meaning, AVAX has delivered a solid 7x or 600 percent returns in the last 60 days. As of press time, AVAX is trading at $71.12 and has a market cap of $15.5 billion. This also makes it the 11th largest cryptocurrency by market cap. Last week itself, AVAX touched an all-time high of $79.
Just like Solana, Avalanche is also among the layer-one blockchain networks eating into the market share of Ethereum. Just to give a perspective, Ethereum dominated 96 percent of the DeFi total value locked (TVL). Now, with the emergence of these new players, the Ethereum share has dropped to 67 percent of DeFi TVL.
Before we dive into the major factors driving the growth of Avalanche, let’s take a look at what is Avalanche and know a bit about it.
How Avalanche (AVAX) came to life
Avalanche is just a three-year-old project started in 2018 by Ava Labs and Cornell computer science associate professor Emin Gün Sirer. The blockchain claims to be the fastest blockchain measured by time-to-finality. It also claims to be having the most validators in comparison to other proof-of-stake (PoS) protocols.
Back in 2019, Avalanche secured a fundraise of $18 million and released its AVAX tokens priced at $0.33 each. In the subsequent year, Avalanche auctioned another 24.9 million AVAX tokens through a private sale priced at $0.50. Last year in July 2020, Avalanche raised another $42 million through its public token sale. Finally, just two weeks back, Avalanche had its biggest fundraise of $230 million taking its total amount raised close to $300 million.
As said, Avalanche is among the few layer-one competitors to the Ethereum blockchain network. The blockchain network boasts a transaction throughput of 4,500 TPS with less than three-second finality. On the other hand, Ethereum can process only 15-30 transactions every second with a 1-minute long finality.
Furthermore, the transaction costs on Avalanche are very less in comparison to those on Ethereum. As of date, Avalanche hosts more than 320 decentralized applications (DApps) to the platform. Some of the popular projects like chainlink, Sushiswap, Circle, and The Graph use the smart contracts infrastructure on Avalanche.
Besides, Avalanche has started attracting projects in the emerging NFT space. Popular sports-themed trading card company Topps minted its Major League Basketball NFT Collection on Avalanche, dubbed “Inception”.
The Avalanche core infrastructure
The major strength of the Avalanche blockchain is its core infrastructure that aims at providing higher decentralization. The core Avalanche blockchain comprises three other integrated blockchains:
- The Exchange Chain (X-Chain): This is primarily related to creating and exchanging assets.
- Platform Chain (P-Chain): This looks after coordinating with the validators and creating subnets.
- The Contract Chain (C-Chain): This looks after executing Ethereum Virtual Machine contracts. A large number of transactions happen in the C-Chain since Ethereum developers can easily build Ethereum-compatible applications using this blockchain.
The Avalanche main network secures and validates all these three blockchains. Avalanche calls the main network as a subnet wherein a “dynamic set of validators working together to achieve consensus on the state of a set of blockchains”. Users can participate in securing the Avalanche network by staking 2000 AVAx tokens currently valued at $142,000.
The subnet also facilitates certain niche use cases that are highly customizable. This can be thus useful to businesses and governments. Besides, the avalanche blockchain architecture also supports private subnets. Thus, anyone who wants to deploy private blockchains can do so.
Expanding Its scope In DeFi
To get broader market acceptability, Avalanche has initiated some key measures. One such is establishing the cross-chain Ethereum bridge. This allows users to seamlessly transfer ERC-20 and ERC-721 tokens between avalanche and Ethereum.
The bridge will facilitate easy migration of Ethereum’s Defi infrastructure to Avalanche. Thus, users will be able to create faster and cheaper transactions as a result. One of the early beneficiaries of the Avalanche-Ethereum bridge is the DeFi player and decentralized exchange (DEX) Pangolin. This DEX allows trading of all tokens issued on avalanche and Ethereum.
The Ethereum-bridge also allows Avalanche users to circumvent the high transaction times in swapping assets. So far, using the avalanche-Ethereum bridge, a total of $1.72 billion worth of assets have been transferred. Apart from Pangolin, other DApps such as Union, Prosper, bZx, JellySwap, and others have joined the Avalanche ecosystem.
Currently, Avalanche is working on bringing two leading DApps on Ethereum to its native blockchain platform. Last month, the blockchain introduced a $180-million Liquidity mining incentive program Avalanche Rush to its platform. This program has been partially distributed to Aave and Curve Finance.
In the initial phase, AVAX will provide liquidity incentives to Curve and Aave users. The Avalanche Foundation has already set aside $27 million worth of AVAX to fund this program.
The Avalanche (AVAX) price rally
Some of the key developments happening on the Avalanche blockchain. have been the reasons behind the recent rally in the AVAX tokens. The launch of Avalanche Rush has been one of the key reasons behind this AVAX rally. Besides, the Avalanche Foundation has raised another $230 million to accelerate DeFi innovation on the platform.
There’s a growing investor optimism surrounding upcoming initial DEX offerings (IDO) dubbed AvaXLauncher. This will serve as the new launchpad and incubator of the Avalanche ecosystem. The two major upcoming IDOs on Avalanche are Oracle and Gaming Project: Breed, Play and Earn.
With the launch of these projects, stakers and holders of AvaXlauncher (AVXL) tokens will receive a small portion of these IDOs through airdrop.
All such development put Avalanche at the forefront of the emerging DeFi space. It won’t be a surprise to AVAX in the top ten list anytime soon.