What is Avalanche (AVAX) and how does it work

What is Avalanche (AVAX), and how does it work?

What is Avalanche (AVAX) and how does it work

Bitcoin was the original blockchain, which inspired the design of all future networks, including Ethereum.
However, the adoption of NFTs and Decentralized Finance (DeFi) have played a major role in altering the blockchain scene today.
Avalanche’s creators, Ava Labs, think they have invented the world’s fastest smart contract blockchain platform. Moreover, avalanche runs at an internet-scale for a future in which crypto is a global backbone technology, with three different blockchains under the shell.
According to reports, around 100 million people were utilizing cryptocurrencies at the start of 2021. Similarly, the market value of DeFi applications has surpassed $100 billion.

What is Avalanche Network (AVAX)?

Avalanche is a blockchain platform with smart contract capabilities that Ava Labs launched in 2020. Avalanche’s goal is to provide a scalable blockchain solution that maintains decentralization and security while focusing on low costs, quick transaction speeds, and environmental friendliness.
Avalanche quickly gained traction in the cryptocurrency world, with Avalanche TVL currently valued at $8.41 billion and rising across Avalanche Decentralized Applications (DApps). The native token Avalanche (AVAX) and numerous consensus methods power Avalanche.
Users can establish an endless number of customized and compatible blockchains with Avalanche. A subscription fee is required to run a blockchain on the Avalanche crypto, AVAX.

Conceptualizing Avalanche 

Avalanche’s smart contract framework supports Decentralized Applications (Dapps) and independent blockchains. Here are a few characteristics that distinguish Avalanche:

Rate of Coin development

The maximum quantity of AVAX tokens is set at 720 million; however, AVAX crypto users have control over how quickly new coins are created. By voting on the amount of AVAX offered as a reward for adding a new block to the Avalanche network, AVAX holders may influence the rate of generating new currencies.

Fees for transactions

The cost of processing a transaction varies based on the transaction type and the level of network congestion experienced by Avalanche. To enable AVAX to grow scarcer over time, all fees are burned—removed from circulation. A vote of Avalanche users determines the Avalanche transaction cost. Hence AVAX rates are subject to change.

Mutual Approval mechanism

Before transactions on the Avalanche blockchain are considered complete, they must be validated via a unique procedure that requires a large number of small, random subsets of network users to confirm them.

Participation incentives

A network participant’s ability to receive AVAX rewards for processing AVAX transactions can be boosted by high uptime and rapid response times.

The proof-of-stake mechanism governs Avalanche in general. In return for the privilege to validate AVAX transactions, AVAX holders must stake—or pledge not to trade or sell—AVAX. Validators for new Avalanche blocks are more likely to be picked among AVAX holders who have the most stake and engage actively as validators. You must inherit AVAX tokens to vote on Avalanche governance proposals.

How Does an Avalanche Work?

The main novelty of Avalanche is that it is made up of three blockchains rather than the traditional one. The reasoning behind this architectural decision is brilliant: rather than having one chain handle everything, each blockchain focuses on a certain purpose inside the Avalanche ecosystem.

By distributing jobs over many chains, the Avalanche platform can fulfill the golden trinity of blockchain qualities — decentralization, security, and scalability.

Exchange Chain (X-Chain)

The Exchange Chain (X-Chain) is the blockchain that allows Avalanche assets to be created and traded. AVAX, Avalanche’s native token, is the most popular cryptocurrency on the network right now, although JOE and PNG, decentralized exchange tokens, aren’t far behind.

Transaction fees on the X-Chain are paid in AVAX. This is similar to how Ethereum gas expenses are calculated and paid in ETH. Even when dealing with JOE tokens, fees are always settled in AVAX.

Contracts Chain (C-Chain)

Avalanche’s main feature is smart contracts. Developers may use this capability to create decentralized apps on Avalanche while taking advantage of the platform’s security and scalability.

The C-Chain is an Ethereum Virtual Machine (EVM) compliant smart contract platform for the Avalanche platform. Because Avalanche is EVM compatible, anybody may use it to deploy Ethereum smart contracts. So what’s the big deal about that? Existing Ethereum programs, such as DeFi giants Aave, may quickly release an Avalanche version of their product.

When building Ethereum smart contracts on top of Avalanche, developers may use the same Ethereum developer tools they used previously to access the latter’s features.

Platform Chain (P-Chain)

In Avalanche, these blockchains are referred to as subnets, with the P-Chain acting as the default subnet for everyone.

The P-Chain keeps track of validators to manage the landscape of Avalanche subnets. However, subnets are also responsible for verifying the P-Chain.

What do you Mean by Avalanche Subnet?

To be precise, the scaling of Avalanche depends on subnets. A subnet acts like a clone of the default blockchain of the platform (for Avalanche, this is the Primary Network) and functions similar to Ethereum 2.0 sharding.

Users may construct subnets on-demand and as needed, which is a big plus. Practically, a subnet can establish another subnet to meet the network traffic needs and free up transactions once its scaling constraints are momentarily reached.

Although subnets are allowed to set their own rules for their blockchain operations, it is still crucial that each subnet must validate both its own blockchain and the Primary Network chain.

Each subnet must be a Primary Network member to validate the Primary Network, which is granted to those who spend 2,000 AVAX tokens or more.

Avalanche Advantages (AVAX)

The key advantages of Avalanche are mostly due to its development characteristics. The inventors of Avalanche discovered a means to overcome the usual issues with blockchains by utilizing the network’s unique structure.


Only a few blockchains allow for cross-platform trade of various types of cryptocurrencies and data. Avalanche allows distinct blockchains to communicate data and essentially “interoperate” with one another, facilitating interoperability.


Bitcoin (BTC) mining necessitates a lot of energy and computational power. Ethereum has a transaction rate of 15 transactions per second. Because of these constraints, these blockchains are difficult to grow, despite their strength and value. On the other side, Avalanche was designed from the ground up to be scalable, with sub-second transaction speeds and massive processing power.


Usability, or how easy the program or technology is to use and apply in various applications and use cases, is one of the main issues when adopting any technology. Avalanche has shown to be effective in various situations and is gaining traction in the crypto world at a rate that rivals Ethereum.

AVAX token

The Avalanche token, often known as AVAX, is a utility token that serves as the ecosystem’s primary medium of exchange. In addition to being a currency in the Avalanche universe, AVAX staking secures the network and compensates stakers with extra AVAX.

The AVAX deflationary token scheme boosts the value of staking. This is because the quantity of AVAX tokens used to pay transaction fees is burned from the supply, limiting the amount of AVAX tokens in circulation forever.

How to get AVAX?

A major cryptocurrency exchange is the most convenient option for purchasing AVAX tokens. In addition, decentralized, peer-to-peer trading between AVAX and Ethereum-based tokens is also supported by the Avalanche platform.



Binance, one of the most well-known cryptocurrency exchanges in the world, makes it simple to buy AVAX. Users that acquire AVAX on Binance will benefit from decreased exchange costs and improved liquidity, making it simpler to buy and sell rapidly. AVAX may be purchased by Binance users in Australia, Canada, the United Kingdom, Singapore, and other foreign places. Unfortunately, residents of the United States can no longer purchase AVAX on the platform.


Uphold is one of the most popular cryptocurrency exchanges in the United States, allowing users to trade a variety of cryptocurrencies, including AVAX. The platform also offers easy-to-use features that allow users interested in buying AVAX to do so intuitively.
Uphold offers desktop and mobile programs and a configurable trading interface that allows users to highlight the assets they trade most frequently. Uphold is preferred by new traders because of its clean, modern interface, which allows for easy browsing on both desktop and mobile.


Gate.io is another respectable trading platform with a user-friendly layout that even novice traders can understand. Advanced charts are also available for more technical traders.


BitPanda is a well-known exchange in Europe for buying and selling Bitcoin. The platform now allows users to trade a variety of cryptocurrencies as well as purchase assets such as precious metals. AVAX is the simplest to buy on BitPanda; however, it is presently only available to inhabitants of the European Union.


AVAX is a cryptocurrency that is regarded as a high-risk investment. If you decide to invest in AVAX, be sure you are aware of the dangers and limits. It’s a good idea not to put more money into anything than you can afford to lose. It is advisable to take suggestions from a cryptocurrency expert before investing.
Avalanche’s consensus approach may be regarded as secure due to its randomized nature. In addition, avalanche makes sure that its platform has additional cryptocurrency security measures that make it less prone to attacks than other blockchains.
If you want to try your luck in cryptocurrency trading and want to know all about the crypto realm, then Blockchain Council’s comprehensive courses are available for you. The cryptocurrency courses offered by Blockchain Council are designed according to industry standards. Apart from providing training and certification, these courses are pocket friendly. So, grab the opportunity and enroll in one!

If you want to keep up with the trends of blockchain industry, join our communities on Discord, Reddit and Telegram.


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