What Is AVAX (Avalanche)?

Dive into Avalanche’s AVAX token and learn about its consensus mechanism, tokenomics, and how it compares to other Layer-1 protocols.

Key Takeaways:

• Avalanche is a Layer-1 blockchain that prioritises low fees and fast transactions while maintaining its eco-friendly status.
• The blockchain processes 4,500 transactions per second (tps) and finalises a transaction in less than two seconds.
• Three interoperable blockchains exist at the base of Avalanche, which allows it to be extremely efficient.
• Avalanche users can launch their own Subnets (blockchains) that can be modified to have their own sets of rules.

What Is Avalanche?

Avalanche is a Layer-1 blockchain that operates using smart contracts, with a focus on low fees, fast transactions, and eco-friendly technology. After launching its mainnet in September 2020, Avalanche has been under active development by Ava Labs; it is designed to allow anybody to produce their own multi-functional blockchains and decentralised applications (dapps). Avalanche Consensus combines the best elements of both classical consensus and Nakamoto consensus to create a new, leaderless blockchain that uses the Proof of Work (PoW) consensus mechanism.

How Does Avalanche Work?

Avalanche achieves finality in less than two seconds, as opposed to Ethereum’s one minute, due to the way it operates at the base level. Avalanche consists of three interoperable blockchains: the Exchange Chain (X-Chain), Contract Chain (C-Chain), and Platform Chain (P-Chain).

• X-Chain is used to carry out transactions; its main responsibility is to help with the sending and receiving of AVAX, Avalanche’s cryptocurrency.
  
• C-Chain is a smart contract chain that allows for the creation of any Ethereum Virtual Machine (EVM) smart contracts.
  
• P-Chain is responsible for the creation and tracking of new Subnets and blockchains. It is also where Avalanche validating and staking occur.

What Is the AVAX Token?

AVAX is the native token of the Avalanche blockchain, playing an important role within the Avalanche ecosystem because of the utility it provides. The token is used to pay for transaction fees, secure the blockchain through staking, and transact between the multiple Subnets built on Avalanche.

Features and Utility of the AVAX Token

Payments: Avalanche allows for thousands of transactions on its decentralised, fully trustless platform, where 4,500 transactions per second (tps) are processed. 

Staking: The AVAX token is used for securing the network through staking, where validators must lock a certain amount of AVAX tokens in return for rewards; 56.79% of all AVAX tokens are currently staked to secure the network.

Subnets and Tokens: The Avalanche platform allows developers to create custom tokens and blockchains. Non-fungible tokens (NFTs), dapps, and a lot more can be created on Avalanche, with the AVAX token utilised for fees and subscriptions.

AVAX Tokenomics

Supply: The maximum supply of AVAX is capped at 720,000,000.

Distribution, as published by Avalanche:

• 50% of AVAX tokens are allocated for staking rewards.
• 9.26% allocated to Ava Labs; 7% allocated to community and development. 
• 5% allocated to strategic partners.
• 10% allocated to the founding and non-founding team members of Ava Labs, with a vesting period of four years.
• 2.5% allocated for airdrops. 
• 0.27% allocated for the testing incentives programmes.
• 2.5% allocated to the seed sale.
• 3.5% allocated to the private sale.
• 10% allocated to the public sale.
• 6.97% unspecified.

How to Trade AVAX

Avalanche (AVAX) is listed in the Crypto.com App, joining the growing list of 250-plus supported cryptocurrencies and stablecoins, including Bitcoin (BTC), Ethereum (ETH), Polkadot (DOT), USD Coin (USDC), and Cronos (CRO).

Crypto.com App users can purchase AVAX at true cost with USD, EUR, GBP, and 20-plus other fiat currencies and spend it at over 80 million merchants globally using the Crypto.com Visa Card. Alternatively, users can also trade AVAX on the Crypto.com Exchange.

Download the Crypto.com App and start trading AVAX today.

Conclusion

Avalanche offers a fresh perspective on Layer-1 blockchains with its innovative design and extremely quick transactions. Its three foundational blockchains provide versatility, while the AVAX token supports various functions within the ecosystem; the detailed token distribution is seen by some as highlighting a balanced approach to ensure growth and community involvement. 

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