What is Avalanche Network (AVAX) and how does it work?

What is Avalanche Network (AVAX)?

Avalanche, launched in 2020 by Ava Labs, is a smart contract compatible blockchain platform. Avalanche aims to offer a scalable blockchain solution while maintaining decentralization and security, focusing on lower costs, fast transaction speeds, and environmental friendliness.

Avalanche quickly became popular in the cryptocurrency space, and Avalanche TVL is currently worth $8.41 billion and continues to rise in Avalanche decentralized applications (DApps). Avalanche works with its native token Avalanche (AVAX) and multiple consensus mechanisms.

With Avalanche, users can create an unlimited number of interoperable, custom blockchains. To operate a blockchain on the Avalanche coin, AVAX, a subscription fee must be paid.

What is Avalanche crypto used for?

The AVAX native token is a utility token. AVAX serves as the medium of exchange for the Avalanche ecosystem. In other words, the token is used as currency within the network, typically for transaction fees, incentives, and many other use cases.

It is also used for AVAX staking, which serves to secure the network. Participants are then rewarded with more AVAX. Some users bet AVAX to earn passive income on the net.

avalanche story

When the Bitcoin blockchain was launched in 2009, it paved the way for the design and invention of later blockchains, including Ethereum. However, with the current large-scale use of non-fungible tokens (NFTs) and decentralized finance (DeFi) protocols, the technical limitations of the original blockchain design have become more apparent.

Bitcoin’s proof-of-work (PoW) consensus, for example, inhibits decentralization to some extent due to its resource-intensive validation process. Transactions also tend to be slower. Most Ethereum applications today use layer 2 scaling solutions to address these issues. By using layer 2, transactions are removed from the main chain. They are then rolled into ordered “bundles”, which are sent back to the Ethereum chain, taking pressure off Ethereum.

Although effective, this solution adds layers of complexity, leaving the network open to some security. threats. So how can a blockchain keep everything within a layer 1 protocol that is decentralized and scalable but also secure?

Enter Ava Labs, the founders of Avalanche, who came up with a brilliant three-blockchain solution to address the major issues plaguing blockchain. In September 2020, Ava Labs US launched the Avalanche blockchain after raising $6 million during its funding round. His subsequent token sales, private and public, totaled $48 million.

Who is behind Avalanche (AVAX)?

The three people behind Avalanche are Kevin Sekniqi, Maofan “Ted” Yin, and Emin Gün Sirer. A pseudonymous group called Team Rocket first published critical information about the protocol in May 2018 on the Interplanetary File System.

The technology was then developed by a group of Cornell University researchers, led by Cornell computer science professor and software engineer Emin Gün Sirer. He was assisted by two of his doctoral students: Maofan “Ted” Yin and Kevin Sekniqi.

The AVA code base for the Avalanche consensus protocol became open source in March 2020, making it publicly available. The Avalanche Initial Coin Offering (ICO) ended in July 2020, followed by the launch of Avalanche in September of the same year.

What problems does Avalanche (AVAX) solve?

As mentioned above, Avalanche was created to address many of the issues facing most blockchain networks. By providing an alternative to networks like Ethereum, platforms like Avalanche work to combat centralization within the crypto space.

Two of the main problems Avalanche addresses are:


Avalanche was deliberately designed with scalability in mind. On par with top-tier payment processors like PayPal and VISA, Avalanche has sub-second transaction times.

Avalanche is also tremendously powerful and efficient, capable of processing up to 6,500 transactions per second with sub-second finality. This is a huge improvement on Ethereum’s limitations in terms of the number of transactions that can be processed per second.

low rates

Considered by many to be a competitor to Ethereum, Avalanche also beats Ethereum in terms of gas fees. Avalanche fees are more affordable than Ethereum by a wide margin.

Fees on the network are used for various purposes such as asset creation and minting, staking, transaction fees, and blockchain creation, after which these fees are burned, permanently reducing the amount of AVAX within. of the platform.

Used fees are burned because “$AVAX is a scarce and limited asset used to pay fees and secure the network.” avalanche shared On twitter. The burned AVAX can be found at burnavax.com.

How does Avalanche (AVAX) work?

In an effort to continually develop and improve blockchain technology, the creators of Avalanche sought to develop a solution to some of the common problems with older blockchains like Bitcoin. Some of these are lack of interoperability and scalability and usability issues.

Avalanche addresses the issues mentioned above through a unique approach: the use of three separate blockchains. Avalanche claims to be “the fastest smart contract platform in the blockchain industry, measured by time to completion.”

Let’s take a closer look at the three blockchains that make up the Avalanche mainnet:

  • X-Chain – This blockchain is used to manage assets. It uses the Avalanche consensus protocol.
  • C-Chain – This blockchain is used to create smart contracts. It uses the Snowman consensus protocol.
  • P-Chain: This blockchain is used to coordinate validators. It also uses the Snowman consensus protocol.

Avalanche’s consensus protocol verifies transaction confirmations from validators randomly by having all nodes run in parallel with each other. The idea is that repeatedly doing random checks increases the probability that a transaction is true/valid. The Snowman consensus protocol works more or less the same but uses blocks in a linear process.

Avalanche Benefits (AVAX)

The main benefits of Avalanche can be found mainly in the way it was built. The founders of Avalanche found a way to address common blockchain problems through the network’s unique structure.


Only a few blockchains support trading of various forms of cryptocurrencies and data with other platforms. Avalanche facilitates interoperability by allowing different blockchains to share data and effectively “interoperate” with each other.


Bitcoin mining (BTC), for example, requires tremendous energy and computing power. Ethereum can only process 15 transactions per second. While powerful and highly valuable, these blockchains are difficult to scale due to such limitations. Avalanche, on the other hand, was built to be scalable, boasting sub-second transaction times and incredible processing power.


One of the concerns in adopting any technology is ease of use, or the extent to which the software or technology is easy to use and implement across various applications and use cases. Avalanche has proven itself in a number of cases and is gaining momentum in the crypto community at a rate that can rival Ethereum.

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Where and how to buy AVAX


Uphold is one of the leading crypto exchanges in the United States facilitating trading needs in various cryptocurrencies including AVAX. The platform also offers user-friendly features that allow users interested in purchasing AVAX to do so intuitively.

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Uphold has desktop and mobile apps and a customizable trading view for users to present the assets they trade the most. New traders, in particular, prefer to use Uphold because of its simple and modern interface that makes it easy to navigate on both desktop and mobile.


Known globally as one of the most trusted cryptocurrency exchanges, Binance allows users to easily buy AVAX. Users who want to buy AVAX on Binance can enjoy lower trading fees as well as increased liquidity that makes it easy to buy and sell quickly. Binance users in Australia, Canada, the United Kingdom, Singapore, and other international locations can purchase AVAX. US residents are currently prohibited from purchasing AVAX on the platform.

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BitPanda is well known in Europe as a trusted exchange for buying and selling Bitcoin. Currently, the platform also offers the trading of various cryptocurrencies and the purchase of assets such as precious metals. AVAX is the easiest to buy on BitPanda, but it is currently only open to residents of the European Union.

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Gate.io is another reputable trading platform that provides a user-friendly interface that even trading newbies can easily use. It also offers advanced charts for more technical traders.

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The platform is a cryptocurrency exchange that offers a wide range of altcoins, including AVAX. Gate.io is notably known for its strong stance against market manipulation. It is open to US residents, except those residing in the states of New York and Washington.