Avalanche is an open-source, proof-of-stake blockchain platform for building customized public or private blockchains, as well as decentralized applications, or DApps. The native cryptocurrency of the Avalanche protocol trades under the ticker AVAX. The cryptocurrency can be used to pay fees on Avalanche, for staking to secure the network and as a unit of account within different chains in the Avalanche ecosystem.
The multi-purpose blockchain ecosystem, developed by Ava Labs, aims to allow developers to build without limitations through its open, programmable platform. So far, it has gained attention from decentralized finance developers for its ease of use, wide range of tools and compatibility with Ethereum. The project aims to be an enterprise-grade blockchain that offers high scaling capabilities and rapid transaction times, crediting what it calls its unique consensus mechanism for the speed.
Avalanche can be compared to Polkadot and other blockchains with DeFi applications in its aim to address the scaling and bottleneck issues that Ethereum's proof-of-work chain has experienced. So far, a number of successful projects, including SushiSwap and TrueUSD, have launched on Avalanche, alongside many other DeFi applications.
As well as encouraging governments, institutions and enterprises to build on Avalanche, the platform also allows for nonfungible tokens, or NFTs, to be minted quickly and cheaply.
The Avalanche platform is compatible with assets, DApps and tools built on or for Ethereum. This means that anyone who has built DApps on Ethereum can easily use the same primary programming language, Solidity, to build on Avalanche.
The total hard-capped supply of AVAX is 720 million coins. Half of the total supply, or 360 million AVAX, will make up the Avalanche mainnet supply, while another 360 million AVAX are being held out of circulation for staking rewards. The mainnet supply of AVAX has various vesting periods that range from one to 10 years, depending on the coin's allocation.
The public sale of AVAX took place in the summer of 2020 and saw the project raise $42 million in less than five hours. Two months later, in September 2020, the Avalanche project launched its mainnet.
In terms of allocation, the AVAX mainnet supply has been divided up between the testnet incentive program, the foundation, partners, community members, the project's team and an airdrop.
The AVAX chart shows that on Dec. 31, 2020, the AVAX price traded at an all-time low of just $2.79 — hitting all-time highs of $59.95 less than six weeks later.
The main developer behind the Avalanche network is Ava Labs, which was founded in 2018 and is backed by prominent firms, including Dragonfly Capital, Initialized Capital and Galaxy Digital, to name a few.
Ava Labs was founded by Emin Gün Sirer and Maofan "Ted" Yin, one of Sirer's Ph.D. advisers at Cornell University. Yin is also the chief protocol architect at Ava Labs.
Sirer is a computer scientist and associate professor at Cornell and serves as the CEO of Ava Labs. He was an early advocate of Bitcoin and the crypto space in general. His research generally focuses on distributed systems and networking. Sirer also co-directs the Initiative for Cryptocurrencies and Smart Contracts, a working group that includes faculty from Cornell and other leading universities.