Avalanche promises high transactional throughput and sub-second finality; here's a look at the top decentralized apps in the Avalanche ecosystem.
What Is Avalanche?
Avalanche (AVAX) is a blockchain platform and a cryptocurrency that has developed a reputation as a rival to Ethereum (ETH). AVAX is the cryptocurrency used by the Avalanche blockchain and it is the main utility token used by projects and smart contracts. AVAX C-Chain is Ethereum Virtual Machine (EVM) compatible, and it supports the use of Ethereum-based smart contracts, thereby allowing it to support a variety of DApps from Ethereum. For certain DeFi users, AVAX is preferable to other Layer-1s platforms such as Ethereum due to its advance and user-friendly features. Moreover, its EVM-compatibility feature has played a vital role in increasing its community base. Also, Avalanche uses a proof-of-stake (PoS) consensus mechanism, and users are able to establish layer 1 and layer 2 blockchains — known as subnetworks or subnets. Various projects are able to transform themselves into validators by staking AVAX tokens.
How Does Avalanche Work?
Avalanche was launched in the year 2020 by Ava Labs. Ava Labs claims to be a group of “world-class team of experts in computer science, economics, finance, and law.” The team is based in New York City and Miami, and the team hails from notable tech, finance and blockchain companies like Google, Microsoft, Morgan Stanley, Consensys and more. The founder and CEO of Ava Labs are Emin Gün Sirer, who was previously an associate professor at Cornell University. The COO is Kevin Sekniqi and President is John Wu. Check out our deep dive into Avalanche written by Emin Gün Sirer.
Avalanche aims to be the world’s fastest blockchain, and the blockchain platform is now a serious competitor with an outstanding team, a passionate community, and a highly devoted team at the back end. Avalanche comprises three blockchains — X-chain, C-chain and P-chain — instead of the one. All three blockchains are validated and secured by the Primary Network, which in itself is a special subnet, or a subnetwork, which is a set of validators that validates a set of blockchains. All custom subnets must be a member of the Primary Network by staking at least 2000 AVAX. The main reason behind utilizing three blockchains is aligned with their goal to be the fastest platform in the industry. All the respective data and responsibilities are distributed among all three blockchains instead of overloading just the one blockchain like other crypto platforms. The distribution of tasks assists in ensuring the dexterity of the platform. The blockchain trio managing these traits are as follows:
Exchange chain (X-chain)
The exchange chain — also known as the X-chain — is the server responsible for transactions as well as the creation of various Avalanche assets. Transactions successfully done on the X-chain are tasked with generating fees in AVAX, which is similar to gas fees on the Ethereum platform which are paid in ETH. So, regardless of the token used in fee payment, transactions are always processed in AVAX.
Contract Chain (C-chain)
One of the key features of this platform includes its ability to provide a platform for the development of decentralized applications. They are also classified as smart contracts. This certain feature is for developers looking to leverage the platform’s security and its portability to develop decentralized applications. Moreover, the C-chain is compatible with the Ethereum Virtual Machine. This allows anyone to deploy Ethereum smart contracts on Avalanche. This feature has enabled the community to enjoy all the features using the developer’s access provided by the Avalanche platform to deploy Ethereum smart contracts. Moreover, this feature uses the same Ethereum developer tool as it always has. This also allows Avalanche to attract deep liquidity from Ethereum DeFi protocols. Total value locked on Ethereum grew 5.3X from the start of 2021, while Avalanche grew by an astonishing 2200X.
Platform Chain (P-Chain)
The Avalanche platform chain allows anyone to develop and deploy an L1 or L2 blockchain. Moreover, if need be the platform also assists the user in creating a group of them, also known as Avalanchesubnets, as previously mentioned. Among all those subnets, the P-chain is considered the default subnet which categorizes itself as the common blockchain among all others. The P-chain holds the responsibility of managing all the subnets by keeping itself up to date with the validators. The P-chain runs on the Snowman consensus protocol, which is a “chain-optimized consensus protocol–high-throughput, totally-ordered, and great for smart contracts.” It is powered by the Avalanche consensus protocol.
How To Buy AVAX?
AVAX tokens can be bought from most of the leading crypto exchanges as they support the token trading pair. After finding the right platform you just need to open an online account with that platform and then buy or connect your wallet to store the tokens. It is usually recommended to store your tokens in either a hardware or a software wallet as currencies are much more likely to get hacked than your wallet.
After successfully establishing your wallet connection, move on to the next step of purchasing the token. Placing an order is easy as you just need to specify between a market order or a limit order. Market order enables you to buy the token at market rates while limit orders provide tokens at a specified price. A limit order can be cancelled anytime before the order reaches completion. Check out our guide on how to connect Avalanche to MetaMask.
Where To Buy AVAX?
Although very few hardware wallets support AVAX, Ledger Live platform investors facilitated users to download applications to store currencies such as AVAX.
The AVAX wallet is considered by far the best wallet for AVAX as it is the native token of the company. Also, Binance and Coinbase have services regarding the buy and sell of AVAX tokens with several benefits and secure transactions so interested users can also turn towards them to avail of these tokens.
How Many Avalanche Projects Are There?
Over 370 projects are launched on the platform and still rising, the community considers them a serious competitor in the industry. The company is also behind the 200 million dollar allocation to projects in DeFi and NFTs under the fund Blizzard. Following this news, another fund of 180 million dollars was made for developers looking for an investor to fund their projects.
What Is the Avalanche Ecosystem?
DeFi covers a lot of different fields including the 58 apps listed under the name DeFi in the Avalanche Ecosystem. These apps are a part of homegrown applications and existing solutions on the platform.Benqi (QI) is listed as one of the top projects available on the network. It is known as a decentralized lending protocol as well as a non-custodial borrowing system. Benqi offers its users the basic functionality of a banking system which means that lending and borrowing of digital assets is fully operational and available with interest. It allows the removal of several restrictions in operating virtual machines. Trader Joe (JOE) is a one-stop shop for decentralized trading on Avalanche. It has gained popularity among traders and has a TVL of 1.13 billion dollars at the time of writing.
Identifying itself as a one-stop-shop trading platform, JOE has expanded into the lending space through its Banker Joe service and it potentially is on the verge of becoming an end-to-end DeFi provider in the long run. Unlike Pangolin, the tokenomics regarding Trader Joe are considered more traditional as the incomes are split as follows: 40% goes to the developer team and the treasury, while 10% is put aside for their strategic investors. The rest of half of the rewards are completely closed in on the holders of the JOE token sharing the trading fees.
Top Avalanche Apps by Category
The top Avalanche apps (as per their monthly users) existing on the platform are as follows:
- Lydia Finance (LYD) – 9.2K.
- Aave (AAVE) – 12.12K.
- Snowbank (SB) – 19.48K.
- Pangolin Exchange (PNG) – 59.01K.
- Trader Joe (JOE) – 373.31K.
Top Play-to-Earn Games on Avalanche
Crabada is an online P2E economy game with two reward tokens, Crabada (CRA) and Treasure Under Sea (TUS) along with a special Crabada Amulet token (CRAM) and NFT crabs. It was launched as an idle automated game that comprised of battle options but the game was unable to hold special breeding events or any other mints which is the reason that there are around 17k crab teams only in existence.
Atlantis world is a fantasy-based crypto game designed in underwater surroundings. Equipped with many awesome features this game has earned quite the reputation as an exciting and fun to play the game.
ROCO is considered among the very first blockchain projects that have the P2E feature and aim to unite both the game developers and the community. With their contribution to improving the earnings for players in-game through game add ons, ROCO also provides their users with a decentralized platform to buy and sell virtual items with the NFT market which ensures NFT’s value as a real-world asset.
Top DeFi Protocols on Avalanche
Trader Joe is a trading platform on Avalanche and is categorized as a one-stop-shop decentralized trading platform. It facilitates its users with services such as trading, farming, stacking, lending and launch.
Pangolin runs on Avalanche as a DEX using an automated market-making (AMM) model similar to Uniswap. It presents a native governance token that is completely community-based and capable of trading tokens issued on both Ethereum and Avalanche called the PNG.
BENQI is a DeFi liquidity market protocol that was originally developed on Avalanche and has two protocols. Protocols include BENQI liquidity market and BENQI liquid staking. The BLM facilitates the community to lend, borrow and earn interest through digital assets very easily. On the other hand, liquid staking facilitates staking services.
Homora defined leverage yield farming after its launch and soon enough, Homora V2 went live featuring much better technological and functional capabilities. Services include innovative yield farming processes and ultimate leverage farming products in the avalanche community. Homora is incubated by Alpha Venture DAO.
Platypus Finance (PTP) protocol is a single-sided DEX designed especially for the exchange of stable cryptocurrencies also referred to as stablecoins, on the Avalanche blockchain. They have applications all over the platform and are still recognized in the market as the foundation behind algorithmically stable coins for the financial industry.
What Are the Advantages of the Avalanche Ecosystem?
Avalanche’s performance in the charts has reflected the growth expectations and high valuations placed on it by the blockchain community. The founders of the company discovered a loophole addressing the common issues of blockchains via the network’s unique structure. Some of the benefits of the Avalanche ecosystem are listed as follows:
There are not many blockchains in existence (not even Bitcoin) that allow the trading of several cryptocurrencies and data with other platforms and Avalanche is one of those few that provide users with a secure and easy way of sharing.
The Avalanche platform can handle huge transactional loads as it was built to be scalable and possesses incredible processing power.
One of the main features that have assisted in Avalanche hosting the highest rate of users in the community is its easy-to-use application feature. Avalanche has succeeded in proving to be one of the most efficient and fast-paced platforms, rivalling itself with the Ethereum community.
How does Avalanche Ecosystem compare to Ethereum’s?
Avalanche was developed to be a serious competitor to Ethereum, offering many popular services for DeFi and GameFi users. Currently, Ethereum being older than the Avalanche operates at a much wider scale than the Avalanche but they are catching up at an unprecedented pace which is quite an interesting race. Check out our technical analysis on Avalanche and price prediction. Although, AVAX bulls would argue that the platform has gained superiority over Ethereum in its ability to scale citing the platform’s high transaction throughput and short time-to-finality. Moreover, Avalanche may be more appealing to first-time DeFi users, as it offers substantially lower gas fees of $0.20 as compared to Ethereum which charges upwards of $20. All of this culminates in an increase in userbase and transaction numbers for Avalanche. However, Ethereum is a tried-and-tested blockchain platform with a substantial development community and loyal userbase. Pioneering DApps like Uniswap, Aave and Compound were all built on Ethereum and have shaped the DeFi space we see today. With Ethereum layer-2 scaling solutions like Arbitrum, Optimism and ZKSync bringing Avalanche-Esque scalability to the chain — only time will tell whether it will displace competitors like Avalanche, or they will co-exist in a multi-chain world. Check out our ecosystem deep dive into popular chains like Cosmos, Solana, Terra and Fantom.