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What Is Avalanche (AVAX)? 

Read 5 min
Coins spiraling in a circle
— Avalanche, a next-gen blockchain platform, competes with Ethereum by offering fast, secure, and scalable transactions.

— The unique consensus mechanism of Avalanche, built on PoS, enables near-instant transaction finality and high throughput.

— A versatile platform for dApps and custom subnetworks, Avalanche employs a multi-chain system with specific functions and designs for each chain.

Blockchain technology has become a vital part of the digital landscape, transforming industries and providing new ways of conducting transactions. However, the blockchain trilemma, which refers to the tradeoff between scalability, security, and decentralization, has become a significant challenge to the technology’s development. 

Enter Avalanche (AVAX), a blockchain platform that aims to address this trilemma and offer improved performance.

But what exactly is Avalanche? At its core, Avalanche is a decentralized platform that offers high throughput, low latency, and strong security while offering support for smart contracts.

So how does Avalanche work, and what makes it different from other blockchain platforms? In this article, we’ll dive deeper into the technical aspects of the network and how it fits within the larger blockchain ecosystem.

What Is Avalanche?

The next-generation blockchain platform, Avalanche (AVAX) offers fast, secure, and scalable transactions while remaining highly accessible and cost-effective.

Using a unique consensus mechanism called Avalanche Consensus, the network allows for near-instant transaction finality and high throughput. It can handle as many as 4,500 transactions per second (TPS) while maintaining the security and decentralization of the network.

Avalanche’s native token is AVAX, used to pay transaction fees and for staking on the network.

Who Created Avalanche?

Team Rocket, a group of pseudonymous developers, laid the foundation for Avalanche by publishing an article in May 2018 that outlined the basis for the Avalanche protocol.

Then, Emin Gun Sirer, a software engineer and computer science professor at Cornell University, decided to build the chain known as Avalanche. In 2018, Sirer founded AVA Labs with his two doctoral students, Kevin Sekniqi and Maofan Ted, to build the chain’s underlying technology  The Avalanche blockchain officially launched its mainnet in September 2020. 

The launch was highly anticipated, with the project completing a $42 million ICO in July 2020 and a $230 million token sale in July 2021. Since then, Avalanche has continued to grow and expand, regularly announcing a range of new projects and partnerships.

In addition to AVA Labs, there is also the Avalanche Foundation, which is a Singapore-based non-profit organization. This supports the growth and development of the ecosystem by managing funds and resources to develop the platform and its projects.

How Does Avalanche Work?

Designed to combat centralization, Avalanche addresses common issues like scalability, interoperability, and usability. Using three distinct blockchains and a unique consensus mechanism, it claims to be the fastest smart contract platform in the industry. 

Avalanche Uses a Proof-of-Stake Consensus

Its consensus mechanism, called Avalanche Consensus, is unique and builds upon the Proof-of-Stake (PoS) foundation.

It uses a sampling process to reach a consensus on transactions. Validator nodes receive initiated transactions and sample a small, random set of other validators to check for agreement. 

The validators continue to sample and communicate with each other until they reach a consensus, ultimately agreeing on the transaction outcome. Validators receive rewards relative to the length of time spent staking and their adherence to the network’s rules.

Multi-chains for multiple functions

Avalanche uses a multi-chain system to provide a platform for building dApps that require high speed and throughput. Each of these chains has its own specific function and design.


X-Chain is the main chain of the Avalanche network. Also known as the Exchange Chain, it is responsible for managing digital assets and tokens, including AVAX, as well as facilitating peer-to-peer crypto transfers. 

It uses a unique consensus model called DAG, which allows it to achieve high transaction speeds and scalability.


C-Chain is a customizable chain on the Avalanche network that enables developers to create and launch their own blockchains. It is fully compatible with Ethereum Virtual Machine or EVM, making it easy to port dApps into the Avalanche ecosystem.


P-Chain is the platform chain of the Avalanche network, responsible for coordinating validator nodes, managing staked funds, and creating custom subnets. 

It also allows the creation of subnets with their own rules and validators, which are easily customizable to meet specific business needs.

Together, these chains make Avalanche a unique and versatile platform.


Avalanche network also uses sub-networks or subnets. As the demand for block space on the C-Chain continues to increase, fees have risen correspondingly. To address this challenge, Avalanche has developed subnets as a solution. 

Subnets involve dividing a network into smaller, more controllable units to make managing and enhancing overall efficiency easier. Basically, they are individual, customizable chains that operate within the Avalanche network. They allow users to create their own blockchains with unique characteristics and rules while still being able to communicate with the primary network and other subnets.

The nodes within the subnet use Avalanche’s consensus mechanism to reach an agreement on the validity of transactions. However, it’s worth noting that all subnet validators must also validate the Avalanche Primary Network, ensuring that the entire network remains secure and decentralized. 

This unique architecture allows subnets to operate independently while remaining interconnected, making it easier to develop new use cases and applications within the Avalanche ecosystem.

What Is AVAX?

AVAX, the native cryptocurrency of the Avalanche network, had its initial launch during a public sale in July 2020.

The total supply of AVAX comprises 720 million tokens, and users can divide these into smaller units. The smallest denomination, called “nanoAVAX,” is equal to 0.000000001 AVAX.

AVAX plays a crucial role in the Avalanche network by offering multiple utilities, including:

Transaction Fees: Users pay transaction fees on the network using AVAX, which then go through the burning process to reduce the token’s total market supply.

Staking: AVAX holders lock their tokens to participate in the consensus mechanism and earn rewards for helping to secure the network. 

Those that want to run a validator node in Avalanche’s PoS consensus mechanism must have at least 2,000 tokens, while becoming a delegator requires 25 tokens.

Governance: AVAX holders can participate in the network’s governance and decision-making processes through staking and voting.

Asset Creation: One can use AVAX to create new assets and tokens on the X Chain.

Pros and Cons of the Avalanche Network

Now, let’s take a closer look at Avalanche Network by examining its advantages and disadvantages.


  • It’s fast and supports smart contracts.
  • Incentivized reward structure for participation.
  • Allows for interoperability between different blockchain networks.


  • No punishment for malicious validators.
  • Risk of centralization due to a small number of large validators.

How to Buy, Store and Manage AXAX

Now that we have a solid understanding of the Avalanche Network, let’s help you get started with AVAX. Here’s a step-by-step guide to buying, storing, and managing AVAX:

  1. Set up a hardware wallet: 
  2. Install the Avalanche app on your device through Ledger Live
  3. Buy AVAX on an exchange:
    Your ledger device supports the AVAX wallet. However, you can not currently buy AVAX through ledger live. Accordingly, you will need to buy AVAX on a CEX or DEX and then transfer the coins to your hardware wallet. However, this is set to change, so watch this space!
  4. Transfer your coins

Now you’ve bought AVAX, you must send it to your ledger device to stay secure. This is as easy as sending your funds to your Avalanche Receive address corresponding to your device.

Staying secure in the AVAX Ecosystem

When buying, selling or managing any coin, including AVAX, it’s important to note who has control over your assets. Bear in mind that if you use a centralized exchange, you forfeit your ownership of your keys. Therefore, it is imperative that you move the funds out of these types of wallets as soon as possible. 

Furthermore, using CEX-compatible hot wallets can put your private keys at risk, since they use your internet connected device to store them. Thus, before you enter the ecosystem, it’s important to do your due diligence and remember only you have the power to secure your assets effectively.

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