Why I’m so Bullish on Avalanche AVAX. Incredible Tech, Team and Tokenomics. Passive Income and Enormous Gains
What is Avalanche?
Avalanche is a platform of platforms, ultimately consisting of thousands of subnets to form a heterogeneous interoperable network of many blockchains, that takes advantage of the revolutionary Avalanche Consensus protocols to provide a secure, globally distributed, interoperable and trustless framework offering unprecedented decentralisation whilst being able to comply with regulatory requirements.
Whilst other blockchain platforms are taking the easy route and sacrificing decentralisation and security to improve performance, Avalanche offers in excess of Visa’s level throughput with 4500 tps per subnet, where transactions are finalised in under a second and all whilst being able to scale to unprecedented levels of decentralization consisting of tens of thousands of nodes, even upwards to a million nodes all participating in consensus at the same time.
Avalanche consensus combines the benefits of Nakamoto consensus (robustness, scale, decentralization) and all the benefits of Classical consensus (speed, quick finality, and energy efficiency) without the disadvantages. It is the biggest breakthrough in consensus since Nakamoto.
Avalanche allows anyone to create their own tailor-made application specific blockchains, supporting multiple custom virtual machines such as the EVM, WASM, Bitcoin VM, Privacy VM and more. This virtual machine can then be deployed on a custom blockchain network, called a subnet, which consist of a dynamic set of validators working together to achieve consensus on the state of a set of many blockchains where complex rulesets can be configured to meet regulatory compliance.
The Primary Subnet consists of 3 blockchains currently, the X-Chain, P-Chain and the C-Chain. The C-Chain uses the Ethereum Virtual Machine and is compatible with all of the key Ethereum tooling that has fuelled decentralized finance’s (DeFi’s) growth to-date, including MetaMask, Web3.js, Remix, Truffle Suite, and Embark Platform.Enabling Ethereum applications to easily port over to Avalanche and take advantage of being able to process thousands of transactions per second, finalise transactions in seconds, extremely low gas fees and Solidity works out of the box! The Avalanche-Ethereum bridge enables assets to be moved between ecosystems and projects to expand across multiple ecosystems to grow their user base.
Heterogeneous Interoperable Network
Why is it important to offer a heterogeneous interoperable network where custom application blockchains can be built? Each blockchain has their strengths and weaknesses. Rather than have a general blockchain to try and meet every requirement and developers having to compromise on a single blockchain for all use cases. Instead, custom blockchains can be built which are tailor-made for that task. Want a blockchain that specialises in payments use x, want a blockchain that specialises in compute / smart contracts use y, want a blockchain that specialises in IOT use Z. Your application may require all 3 of those and can then interoperate seamlessly between them on the same platform ensuring each part performs optimally rather than having to compromise on one.
New blockchain platforms with their own smart contract language / virtual machine can take years to build the tooling comparable to what Ethereum has built up today. By being able to implement any custom VM on top of the platform, you can immediately benefit from all the existing tooling / developers that are familiar with Solidity and enable projects to seamlessly migrate to Avalanche and benefit from the performance it offers without having to rewrite your DAPP and maintain two completely different code repositories.
It’s not limited to just the EVM and migrating DAPPs from Ethereum though, any custom VM can be used. Allowing projects from any blockchain to ultimately be easily ported over and benefit from the performance, decentralisation, low fees and customisation Avalanche offers.
Bitcoin and Bitcoin Cash Subnets — Airdrop to BTC and BCH Holders
Bitcoin and Bitcoin Cash subnets will be created on Avalanche enabling the functionality of Bitcoin to be used in more than just a digital gold proposition but also an excellent payment system by providing high throughput, sub second finality, cheap fees, low energy consumption whilst even greater levels of decentralisation by replacing Nakamoto consensus with Avalanche. Staking may potentially be implemented as well as transaction fees being burnt rather than paid to miners, following models such as AVAX and Ethereum EIP 1559 and creating deflationary pressures as well as Fixed capped supply.
It will feature the Bitcoin Virtual Machine providing the full functionality of Bitcoin, scripting language, segwit, integration with existing Bitcoin tooling.
A snapshot of the current Bitcoin blockchain will be taken and equivalent amount of tokens will be airdropped to holders on the new subnets on Avalanche. More details will be released closer to deployment but you can listen into the quick video clip discussing it in the link in the tweet below.
The Avalanche Ecosystem is Rapidly Expanding
The Avalanche Ecosystem is rapidly expanding currently there are a number of DEXs deployed with a large selection of DAPPs already been announced and deployed in the coming weeks / months as well as loads of DAPPs still to be announced
The largest DEX currently deployed on Avalanche is Pangolin which has seen enormous growth since it’s launch just a month ago with volumes in excess of $600 million and over $240 Million Liquidity.
Pangolin uses the same automated market-making model as Uniswap, offering the trading of all Avalanche and Ethereum assets at high throughput, sub second finality, cheap fees, no front running and with a 100% community-focused token distribution for governance, meaning that all tokens are distributed directly to the community, without any allocations to team, advisors, investors, or insiders so everyone has an equal opportunity to farm.
Additional projects are building on top of Pangolin and due to be released in the coming weeks such as Velox a decentralised high frequency trading bot
There Is So Much to Look Forward to in the Coming Weeks and Months
The first major upgrade to Avalanche is due to be released in the coming months and will enable a number of important features as well as making transaction fees even cheaper than they currently are (by a significant margin as well)
- Epochs — Epochs will incorporate the concept of time into Avalanche’s Exchange Chain (X-Chain). This will unlock many features from our roadmap, with unprecedented decentralization and speed. These features include state pruning, variable fees, governance, and many more.
- Freezable Assets — This new asset type enables asset creators and issuers to freeze and unfreeze assets on the platform. While we can’t envision every way people will deploy this functionality, there is a clear need for organizations with regulated use cases to ensure only approved users have access to assets. It will also be a key component of new assets coming soon to Avalanche.
- Avalanche Native Asset ERC-20 support — This upgrade, which introduces a new Ethereum Virtual Machine (EVM) instruction called callex, makes it possible for the Avalanche Contract Chain (C-Chain) to transfer native Avalanche assets while invoking smart contracts. This, in turn, enables native Avalanche assets to be deposited into ERC20 wrapper contracts.
Securitize is one of the most successful and recognized companies in the security token space, with currently more than 150 customers and 50,000 investors currently using its issuance and compliance platform for digital securities. Securitize’s wholly-owned subsidiary, Securitize Markets, LLC, is an SEC and FINRA registered broker-dealer and alternative trading system (ATS).
In 2019, private capital markets raised more than double that of public markets — $2.9T versus $1.4T (according to the World Federation of Exchanges) and did so with only 2.5% of eligible accredited investors participating. By 2023 private capital markets are projected to be worth $14 Trillion
Initial Litigation Offerings
Avalanche, Roche Cyrulnik Freedman LLP, and Republic Advisory Services are bringing the $10B asset class of litigation financing to the Avalanche blockchain through the creation of a first of its kind token, the Initial Litigation Offering (“ILO”), a blockchain-enabled litigation financing product open to all investors.
Litigation funding, also known as legal financing and third-party litigation funding, provides individuals who otherwise lack the necessary resources the funds needed to litigate or arbitrate a civil claim. ILOs raise the funding required to pursue litigation in these cases and tokenize an economic right in such claims. Each token indirectly represents a legal claim to a portion of the potential financial recovery which has been converted to a digital asset.
“ILOs are a breakthrough for both individuals lacking the resources to seek remediation, and for retail investors who are often locked out of the most highly-performant asset classes. They are fundamentally unique from any other investments, and the creation of the ILO marks the first time blockchain technology will be used to democratize financial products at a multi billion-dollar scale.” — Kevin Sekniqi, Ava Labs
Congress of the Mexican State of Quintana Roo
The Congress of the Mexican State of Quintana Roo is the first government publicly using Avalanche to use it for the digital certification of its legislative documentation, which works through the correspondence and file management system.
The initiative will guarantee the integrity and transparency of legislative documentation for citizens, entities, and deputies against the modification or destruction of the initiatives presented. Every initiative will be linked to a QR code, that when scanned will take readers to the site where they can download and validate the document.
Major Exchange Listings, Major Qualified custodians, Institutional Investors
“Two major qualified custodians are in the process of integrating with Avalanche. This will not only enable faster integrations with leading partners across the world, but also open AVAX to the institutional marketplace. Furthermore, more major listings, including large U.S. venues, are expected to be supporting Avalanche in Q2.” — Emin Gün Sirer
This is in addition to the recent integration with Copper to enable institutional clients to trade AVAX.
“Institutional clients trading AVAX, the native token of Avalanche, will have access to Copper’s secure storage and trading ecosystem with immediate effect. Copper will add AVAX to the 150+ collection of digital assets supported across Copper’s infrastructure.
Institutional AVAX traders, community, and whales now have access to Copper’s hybrid MPC (multi-party computation) wallet technology, which combines secure offline storage with seamless access to leading online exchanges.”
The Coinbase Rosetta Technical Lead also recently joined avalanche, where it was his job to deeply study all the important Layer 1s that have launched in the last few years and you can see why he believes Avalanche is above the rest and has joined the team of experts at Avalanche in the tweet thread below
NFT DEX — Polyient Games
Polyient’s NFT exchange will be powered by the Avalanche blockchain and will exist within the firm’s forthcoming Polyient Games Marketplace. The exchange is slated to host exclusive NFT auctions and peer-to-peer trading, with plans for “more liquid NFT trading products” and “NFT-adjacent tokens” in the future. There have been numerous other NFT Exchanges announced as well.
Lots more Announcements around NFT’s soon the be released
“NFTs will be a huge area for growth on Avalanche, as creators can easily issue NFTs directly through the Avalanche Wallet. In Q2, we should anticipate core NFT infrastructure like auction and discovery platforms coming to Avalanche, and potentially a marquee brand in the collectibles world.”
DeFi ecosystem is going to massively expand over the coming weeks and months in addition to the huge amount already announced many more applications will be expanding to Avalanche, including cornerstone functionalities like lending, collateral optimization, decentralized options, and most crucially fiat onramps for users to seamlessly access Avalanche’s DeFi ecosystem.
Institutions and Enterprises
The Ava Labs team is exploring multiple proofs-of-concept with institutions and enterprises across the financial services, insurance, and pharmaceutical industries, including two publicly-traded companies.
In addition to participating in multiple proof of concepts in the traditional finance space:
- Successfully completed proof-of-concept to replace a Fortune 250 SaaS company’s blockchain efforts with an Avalanche blockchain-as-a-service deployment.
- Tokenization of alternative asset shares and Development of a tokenization arm offering custody and management of third parties’ funds for a $150 Billion+ Asset management Firm
- Tokenization of gold on a permissioned blockchain network between financial institutions and to support regulatory compliant privacy scheme for a Regional Commercial Bank
Multiple Fundraising / Auction / Token Launch Platforms coming very soon
Wallet support is vital to expanding the Avalanche ecosystem, and improving user experience. In Q2, AVAX will be supported by some of the most downloaded crypto wallets in the world, bringing Avalanche to tens of millions of new users.
Staking AVAX Is Like Mining Bitcoin in the Early Years. Earn Incredible Passive Income on an Asset Which Is Going to Exponentially Rise in Price.
With so much to look forward to in the coming months — and all the above still only covers a part of it, combined with the enormous stimulus packages such as the $1.9 Trillion recently passed in the US and 3 Trillion Euros in Europe then we could see the price of AVAX rise dramatically. It’s is ridiculously undervalued and below is a quick overview of the tokenomics
AVAX has a max supply like Bitcoin so doesn’t have the continuous dilution through high inflation like other projects. A completely meaningless comparison I see some people making is comparing the fully diluted cap of a fixed-cap asset such as AVAX to the diluted cap of a variable-cap asset. This makes no sense. You’re comparing the fully diluted cap that will take 50+ years to reach, to the current total supply of a variable-cap asset which has unlimited supply and yearly compounded inflation rate, and that’s before you take into consideration the AVAX tokens which get burned. Polkadot in comparison has 10% yearly inflation, in 2050 the supply of DOT will have increased from 1 billion to 16 Billion. If the price of DOT and AVAX stayed the same this is how their market cap would look in 2050:
DOT: $602 Billion
AVAX: $22 Billion (this would actually be far lower than this due to not all being in circulation at that time and the continuous burning of tokens)
In addition to having a limited supply like with Bitcoin, it goes further by burning of AVAX tokens for fees for all sorts of operations on the network in the primary network such as transaction fees, subscription style fees for creating subnets and creating of blockchains, thus increasing the scarcity of AVAX for all token holders and creating deflationary pressure when the amount burnt exceeds the minting rewards.
There has been over 30,000 AVAX burned already in just a few months, all with just a few DAPPs live, just imagine how much is going to get burned once all these DAPPs go live and there are thousands of blockchains running on the platform.
AVAX already implements a burning mechanism like Ethereum EIP 1559 except with AVAX all of the transaction fee is burnt rather than just partial, not only that but asset / blockchain and subnet creation fees are also burnt and that’s across each of the 3 blockchains currently in the primary subnet.
EIP 1559 will lead to miners extracting value from other means such as front running / arb opportunities etc whereas with Avalanche’s sub second finality, leaderless consensus and ability for anyone to easily run a node on modest hardware makes front running pretty much a non issue
Avalanche offers far more customisability and scalability than other heterogenous platforms such as Polkadot and Cosmos, combined with a revolutionary consensus mechanism to achieve scale without compromising decentralisation. You can see this article for how they compare.
Comparison between Avalanche, Cosmos and Polkadot
A frequent question I see being asked is how Cosmos, Polkadot and Avalanche compare? Whilst there are similarities…
Avalanche has support for custom VMs enabling DAPPs to easily migrate over from ETH as well as other platforms to benefit from more users, cheaper gas fees, faster transactions. Without that it takes years to build all the tooling around the ecosystem, Avalanche gets to use that from day one.
Not only can you earn 11% Staking AVAX but as there is no slashing with Avalanche you will soon be able to also use the staked AVAX with liquidity mining / DeFi opportunities to earn even more and all with minimal hardware requirements so anybody can run one at low cost. Combined with AVAX increasing in price substantially this is amazing passive income.
You can also validate other subnets with your node and earn rewards for those earning their native tokens on top of all the other rewards in AVAX.
AVAX is one of very few projects that actually has utility for the token with enterprise use cases — with the vast majority of projects enterprise partnerships just means a permissioned version of the chain / side chains which don’t use the token as gas fees, nor do they stake. With Avalanche every subnet also has to validate the primary network and stake 2000 AVAX as well as pay fees for subnet and blockchain creation which are burned.
The Avalanche platform will also have huge appeal to enterprises as they can build permissioned and permissionless blockchains, as well as create regulatory compliant subnets. Combined with sub second finality and high throughput makes it a perfect platform for payments as well as the trading of securities to transition to. (With derivatives market alone with over $800 trillion)
With the launch of subnets, Initial subnet offering platforms is all going to lead to even AVAX being locked in to secure funds for subnets adding additional utility. The staking ratio is already around 80% of total supply.
Over the coming weeks and months, the Avalanche platform is going to grow exponentially and even then this is just the very beginning of what is going to be an incredible journey. Everything is going to be tokenised, most industries are going to be completely transformed through blockchain from the entire financial infrastructure, supply chain, Identity, capital markets, energy even the Internet itself is going to radically change. The current market caps are just a tiny spec of what they will be once we reach anything close to mass adoption. It’s just a matter of time before the price per AVAX is in the 4 digits.
You get very few opportunities to invest in projects such as Bitcoin, Ethereum in the early years, many people didn’t realise the scale of what they hold and sold early. Others such as this wallet held Eth from ICO from 0.30 cents to $1433 and only sold it then to participate in the Avalanche ICO (the maximum amount they were allowed to participate). That speaks volumes.
This is just the beginning
Avalanche Looks Set for Exponential Growth with Subnets, Enterprise Partnerships, Defi Blue Chips…
Avalanche Autumn and Avalanche Rush has officially begun with $650+ Million in incentives, the largest DeFi Blue Chip…
A Quick Overview of Avalanche (AVAX) and Why You Should Be Paying Attention
This article is the contents of a tweet thread seen below but in article form to make it easier to read.