ZoneBitcoin EditorialThe launch of the Ethereum-Avalanche Bridge has recently attracted the attention of a large part of the DeFi community to Avalanche. For some, it's the great innovation that we've been waiting for for a long time and is finally functional. We will therefore focus here on the new Avalanche protocol and see what these impacts are for decentralized finance as a whole.
Crypto saw a lot of momentum last March and everyone is talking about this new consensus which aims to be revolutionary! Yes, another one, except that here, we are perhaps not wrong to believe it.
You will understand why we think - on zonebitcoin - that this project has a future ahead of it and that yes, we can consider it as a new powder that arrives, with violence, in our snowy mountain..
Avalanche Overview:
Avalanche was created by Ava Labs, a company created by Cornell Emin Gun Sirer and it was in September 2020 that Avalanche was officially launched.
The project managed to raise more than 18 million dollars from the most important investment funds such as Andreesen Horowitz and Polychain Capital to name a few. After this first success, they collected in less than 5 hours, more than 42 million dollars during the first sale of the AVAX token, in July 2020.
What is Avalanche's ambition?
Like many blockchains, the goal is to offer a network and architecture that is more efficient, faster and cheaper than the Ethereum blockchain. For this, the operation of Avalanche has been well designed and allows greater flexibility of use.
The particularity of Avalanche is that it is made up of several blockchains, all based on an efficient proof of stake consensus. How? The company claims that its consensus combines the advantages of Nakamoto consensus (robustness) and classical consensus (speed, speed and low energy cost).
According to the comparison table published by the company, we see that Avalanche is much more efficient than the Bitcoin, Ethereum and Tendermint blockchain. This is true both in terms of the speed of transactions, the energy cost, the limit on the number of validators, Sybil protection, etc.
What can you do on Avalanche?
The platform supports several custom virtual machines like EVM or WASM. This allows you to perform and manage specific functionalities specific to each use. Virtual machines can be deployed on blockchains called “subnetworks” which are made up of a set of validators.
Thus, deploying a protocol on this network is facilitated by the very functioning of its infrastructure.
Avalanche can thus be thought of then and defined as a “platform of platforms”, comprising thousands of subnetworks which forms a single interoperable network: Avalanche.
What are the advantages of Avalanche?
One of the biggest advantages that the user can benefit from right now is the bridge created by Ethereum-Avalanche, to take a concrete example.
The Avalanche-Ethereum Bridge, is a “bi-directional token bridge that enables seamless ERC-20 and ERC-721 transfers between Avalanche and Ethereum”. In order to use assets that are based on Ethereum on dapps on Avalanche, users can then lock these assets into the ChainBridge contract and then mint an equivalent token on the network. Smart and practical, isn't it?
So the advantages are numerous. High network fees can be avoided on Ethereum. We can interact and use more complex DEFI protocols and even be more profitable in general.
Moreover, applications are always more numerous and the Avalanche ecosystem is becoming ever denser as you can see.
An increasingly broad and varied ecosystem
Ava Labs is wasting no time and has already succeeded in conquering new projects within its network. We can cite for example Pangolin which is a decentralized exchange. Transaction fees are much lower than what we see with Ethereum gas price rises, For example. The adoption of this DEX has been very rapid and more and more users are using Chain, for example, to swap tokens.
We are talking here about Pangolin because the name terrifies us with the covid situation as you will understand but know that there are plenty of other sheets that have joined the Avalanche ecosystem.
Thus, the applications offer very different services from each other, making the ecosystem ever more complete. Among these, we find:
- Prosper (a decentralized prediction market).
- Jelly Swap (cross-chain swaps and token exchange on Avalanche, Bitcoin, Ethereum, Harmony and Binance SmartChain). ( You can learn more about how it works JellySwap. )
- UNION (collateral optimization instruments and grouped insurance coverage).
- Reef (liquidity aggregator).
- Yield (automated portfolio and wealth management).
- Aleph.im (decentralized cloud like file storage).
- Ankr (A node hosting and validation service for Avalanche).
There are still plenty of other protocols joining the ecosystem and this is also what contributes to the increase in value of Avalanche. Let us add that the Ava Labs team regularly enters into new partnerships. From a marketing point of view, it is also very well thought out. Indeed, each protocol will also indirectly advertise Avalanche, pushing ever more users and developers to seriously consider Avalanche.
Final word: should we invest in AVAX?
Some say that despite the hype for ETH 2.0 and the high expectation from the community, it is possible that blockchains as powerful as Avalanche (also mentioned Solana also), it could be that ETH2.0 will have less impact than expected…
This tells you how much investors believe in this project and…we do too! We think it would be wise to have AVAX in your portfolio if you believe in the project. It would be very likely that crypto would grow in importance as the ecosystem becomes ever more important.
Did the Avalanche blockchain appeal to you? You want to know more?
— Read our article on investing on crypto AVAX.
Disclaimer: The information contained in this article and on this site is provided for informational purposes and should not be construed as financial advice, investment recommendations or an offer or solicitation for transactions in cryptocurrencies.
