The latest crypto bear market may have spoofed many people into selling but savvy investors have instead shifted their attention towards identifying the next crypto that can deliver significant growth. Most of the pump and dump coins have already been exploited and the next best place to look for potential growth is crypto projects with solid development, a healthy roadmap, and robust tokenomics. Very few projects fit the above criteria and Avalanche happens to be one of them.
Avalanche is a smart contract-enabled and interoperable blockchain that was designed to be customizable while delivering high levels of scalability and speed. It also supports application-specific sharding, as well as support for the Etehreum virtual machine. Avalanche developers hope to scale up the network’s throughput so that it can handle as many transactions as Visa.
The Avalanche network has a unique consensus protocol that is highly decentralized and highly scalable. The consensus mechanism repeatedly samples the network where each node queries a randomly selected set of neighboring nodes about the prevailing state of the network. In case a majority of the neighboring nodes support a different value at any given point, the node switches. The nodes will communicate with other validators about transaction validity when they are proposed on the network. This approach allows them to pole other nodes thus boosting their confidence that they are submitting valid transactions.
The network also leverages a proof of stake mechanism to ensure network security by making it extremely difficult and expensive for a rogue actor to try and control some of the network nodes. Subnetworks or subnets are a critical part of the Avalanche blockchain. They are dynamic validators that collaborate to deliver a consensus on the state of a blockchain collection. They can also run a proof of stake or proof of work consensus. The interoperability of the subnets with an underlying subnet is similar to the parachain approach on Polkadot.
Avalanche developers are constantly working on upgrades to the network with the ultimate goal of introducing support for more powerful smart contract tools. Meanwhile, they have so far managed to develop a network that is highly customizable and can support multiple use cases, and address the needs of developers. It is a network that can facilitate the development of different blockchains within it, and each can deploy its own consensus measures.
AVAX is the native token on the Avalanche network and it plays a vital role. It facilitates the transfer of value across the multiple blockchains, is used to pay for fees, and facilitates security, as well as governance on the network, thus multiple use cases. It is currently trading at $25.97 after tanking from its all-time high of $60.30 which it achieved in February this year. Interestingly, it is still performing better than it did at the start of 2021 when its price was lower than $2.
AVAX currently has a circulating supply of just over 172 million tokens and a market cap of $1.95 billion. Its low circulating supply combined with the fact that it has multiple use cases makes it quite an appealing cryptocurrency. Those factors could potentially deliver robust growth in the future, but only if the Avalanche network continues to benefit from widespread adoption.
Unfortunately, Avalanche has to contend with multiple other major blockchain projects competing in the same space. AVAX might also attract a lot of attention because it offers some of the highest staking rewards ranging from 7% to 12%. The total maximum supply of 720 million AVAX should not be a concern because they will be gradually released over the years and some of them will be offset by fee burning. Overall, AVAX is currently one of the most promising cryptocurrencies and one that is worth keeping an eye on.
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