Home Altcoins News Avalanche (AVAX) a Sleeping Giant With Potential For Greatness

Avalanche (AVAX) a Sleeping Giant With Potential For Greatness

If you have a good understanding of how the cryptocurrency market works, chances are that you know that a cryptocurrency has higher chances of ballooning to a huge price if it has a low circulating supply and a solid use case. There are few such coins traded in the cryptocurrency market and AVAX from Avalanche happens to be one of them.

AVAX is the native cryptocurrency on the Avalanche blockchain, and it is trading at $12.13 with a $2.08 billion market cap and 172.4 million coins in circulation, out of a maximum supply of 720 million. In comparison, Dogecoin which is a memecoin with no specific use case has a $27 billion market cap and a significantly higher circulating supply at 130 billion DOGE. These numbers highlight just how undervalued AVAX is considering its low circulating supply, likely because not many people know about it.

Avalanche AVAX USDT

Source- Binance

Here are some numbers that paint a good picture of AVAX’s undervalued nature. If its market cap was to reach $10 billion, it would be worth $58 per coin assuming the circulating supply remains constant.

If its market cap was to grow to Dogecoin’s level at $27 billion, it would be worth $156, if the circulating supply remains unchanged. That is more than roughly 12X the current price. The chances of that happening are largely dependent on network adoption and the reasons for its existence, which is why it is essential to understand its role in the Avalanche network.

What is Avalanche?

It is a blockchain project that aims to create a unifiable global marketplace where financial products such as commodities, equities and other alternative assets could be accessed within one platform. An internet of assets where digital assets can be issued and traded. Avalanche is determined to be the blockchain that will facilitate the existence of such a platform.

Avalanche was created by a computer science professor Emin Gün Sirer, who has great contributions to the cryptocurrency industry. This is because he created the first crypocurrency prototype called KARMA in 2001, which was based on a proof of work mechanism just like Bitcoin. There has even been speculation that he might be the real Satoshi Nakamoto because of his groundbreaking experiment two decades ago.

In 2018, Emin founded AVA Labs, the software company that created the Avalance blockchain whose mainnet was launched in September 2020. It leverages a DAG optimized proof of stake consensus mechanism known as Avalanche consensus.  Validator nodes on the consensus communicate with each other when a transaction takes place, and the information spreads quickly among the nodes.  This makes it possible for the validators to achieve consensus in a matter of seconds. One of the benefits of this approach is that it is difficult to corrupt.

The Avalanche network has a transaction speed of more than 4,000 transactions per second. It also functions as three blockchains within one network. The first is X-CHAIN or exchange chain, on which assets can be created and exchanged. It is the chain that hosts the AVAX token and relies on the Avalanche consensus mechanism. The second is the P-Chain which relies on the Snowman consensus and it is the chain responsible for coordinating validators on the network, while also facilitating the creation of customizable subnets.

The third chain is the C-Chain which also relies on the Snowman consensus and takes advantage of Ethereum’s virtual machine for smart contract support. But what is holding back Avalanche’s performance? The crypto market is highly competitive and most of the developers choose the most popular and prominent blockchains. The lack of enough developers has also been a huge challenge for the project. However, these are challenges that the project will likely overcome moving forward. Avalanche is still in a position for growth mostly thanks to DeFi demand which will certainly aid its price action.

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Sydney Ifergan

Sydney has 20+ years commercial experience and has spent the last 10 years working in the online marketing arena and was the CMO for a large FX brokerage.

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