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<h2 id="header-0">Quick Take</h2><ul><li>Avalanche is #4 in the top protocols list, with a $1.33 billion TVL.</li><li>In fact, Avalanche is not a single blockchain but a set of blockchains.</li><li>Avalanche can process 300x more transactions per second than Ethereum and over 600x more than Bitcoin.</li><li>The team’s plans include developing the NFT space and blockchain-based gaming.</li></ul><p>The ‘blockchain scalability problem’ query has 9,330,000 results in Google search so far. The more popular blockchain-based projects become, the more scalability challenges they face as the increasing number of transactions requires more resources. That’s what the Avalanche team kept in mind when developing their blockchain. They aimed to create a network where “deploying assets was as easy as sending an email.”</p><p>OneArt takes a closer look at one of the five blockchains our wallet supports to understand how it works and responds to the most popular Web3 issue.</p><h2 id="header-1">How it all began</h2><p>It took Avalanche just two years to become Ethereum’s competitor — more flexible and scalable. But the whole story began earlier with a bit of mystery. In 2018, Team Rocket, a group of anonymous researchers, published a white paper called <em><a href="https://ipfs.io/ipfs/QmUy4jh5mGNZvLkjies1RWM4YuvJh5o2FYopNPVYwrRVGV" rel="noopener noreferrer nofollow">Snowflake to Avalanche: A Novel Metastable Consensus Protocol Family for Cryptocurrencies</a>. </em>The next day, Emin Gün Sirer, professor of computer science at Cornell University, tweeted:<br /></p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/f4af554d47b44dfcbf45163e29c00a58.png" /><p>The same year, he founded Ava Labs — the developer of Avalanche. In 2019, the company raised <a href="https://www.bloomberg.com/news/articles/2022-04-14/crypto-startup-ava-labs-is-said-to-raise-at-5-billion-valuation" rel="noopener noreferrer nofollow">$6 million</a>. Next July, it launched ICO and managed to raise <a href="https://news.cornell.edu/stories/2020/08/blockchain-startup-raises-quick-42m-first-sale" rel="noopener noreferrer nofollow">$42 million</a> in about five hours. And in September, the blockchain went live.</p><p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/25ffe8313ae1471c838cfb10d8ab48ff.png" /></p><p><em>Emin Gün Sirer (3rd from left) with co-founders and team members. Source: Cornell Chronicle</em></p><p>Now Avalanche is #6 in the <a href="https://defillama.com/top-protocols" rel="noopener noreferrer nofollow">top protocols list</a> by DeFi Llama, with a nearly $847 million total value locked (TVL). The top 5 include Ethereum, BNB Smart Chain, Tron, Polygon, and Arbitrum.</p><h2 id="header-2">Tech details spelled out</h2><p>Avalanche is an EVM-compatible (Ethereum virtual machine-compatible) blockchain that uses the <a href="https://www.coindesk.com/learn/what-is-proof-of-stake/" rel="noopener noreferrer nofollow">proof-of-stake method</a> to verify transactions. Its subnetworks let developers launch tailor-made networks using custom virtual machines. The <a href="https://assets.website-files.com/5d80307810123f5ffbb34d6e/6008d7bbf8b10d1eb01e7e16_Avalanche%20Platform%20Whitepaper.pdf" rel="noopener noreferrer nofollow">platform</a> is built around three blockchains:</p><ul><li><a href="https://docs.avax.network/overview/getting-started/avalanche-platform#contract-chain-c-chain" rel="noopener noreferrer nofollow">C-Chain</a> — to execute smart contracts</li><li><a href="https://docs.avax.network/overview/getting-started/avalanche-platform#platform-chain-p-chain" rel="noopener noreferrer nofollow">P-Chain</a> — to develop subnets and coordinate validators</li><li><a href="https://docs.avax.network/overview/getting-started/avalanche-platform#exchange-chain-x-chain" rel="noopener noreferrer nofollow">X-Chain</a> — to create and trade digital assets.</li></ul><p>These three are validated by all <a href="https://support.avax.network/en/articles/6187511-validator-faq" rel="noopener noreferrer nofollow">Avalanche validators</a>. They, in turn, make up the Primary Network. <em>(Anyone can be a validator. You just need to get the necessary hardware and stake AVAX — at least 2,000).</em></p><p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/af8fabf4c8444237a2b1f04e899e5bec.png" /></p><p><em>Source: Avalanche</em></p><p>Such architecture — with separate blockchains used for different purposes — allows Avalanche to be more <a href="https://decrypt.co/resources/what-is-avalanche-network-avax-ava-labs" rel="noopener noreferrer nofollow">flexible, fast, and secure</a>, the network developers say.</p><h2 id="header-3">From Snowflake to Avalanche: how it works</h2><p>In fact, Ava Labs has introduced a <a href="https://assets.website-files.com/5d80307810123f5ffbb34d6e/6009805681b416f34dcae012_Avalanche%20Consensus%20Whitepaper.pdf" rel="noopener noreferrer nofollow">family of protocols</a>, progressively built up from Slush to Avalanche. They are based on repeated random subsampling. Here’s how it works.</p><p><img src="https://lh3.googleusercontent.com/BwP3s-qdHjfMbNGepZxXCkbZ39GcbFdvOgjg-Xw1P_HX-wYMG0aktF-5j5mgp5cbCDvhtQtNXsPhpXjf3NVGcPlYxT4JxkhrStZlZIt65i2iZ4LIS7OmBaIhdj94ubVHGNogfbiLgwg-x3eXSNP2DvrsOPXocreYE90HuIzHPQmDJGL4cRU4oUe-F0hpbQ" /></p><p><em>Source: Avalanche</em></p><h3 id="1-slush">1.     Slush</h3><p>A node arbitrarily chooses a group of <em>k</em> other nodes to accept or reject a transaction. At least α of them have to agree on a response. Then a node repeats the whole process <em>m</em> times. The final decision is that taken at time <em>m</em>.</p><p><img src="https://lh4.googleusercontent.com/PgsOW70IpFcyupMhTSc3XU1PdnL0cPfqwiZHzD80jU5aDatMn6sgTnnhfcpEz1z_punSXAx9wfE5oDZRYG1Bs7UTzNhCMDUB5Cmmh-Yctce7BHdYSs3jcnyk3uNPp_6w5CR1XClwh-YyQp9Ev2Og07WLkXRQPs2t0zxA1_b6bATicKgbCgIaaCewovpvZQ" /></p><p><em>Source: Avalanche consensus whitepaper</em></p><p>Slush is not <a href="https://academy.binance.com/en/articles/byzantine-fault-tolerance-explained" rel="noopener noreferrer nofollow">Byzantine fault tolerant</a>. That’s where Snowflake is brought into play.</p><h3 id="2-snowflake">2.     Snowflake</h3><p>This protocol adds a conviction counter <em>cnt</em> to Slush. The counter shows how many consecutive samples of the network by the node have all made the same decision. When <em>cnt </em>reaches <em>β</em>, the node agrees with the current decision.</p><p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/7655856e022a44e1aa8feefefa0ff669.png" /></p><p><em>Source: Avalanche consensus whitepaper</em></p><h3 id="3-snowball">3.     Snowball</h3><p>Snowball adds a sort of history to the process. It introduces confidence counters. A node takes a decision if it gets <em>β</em> consecutive majority responses for a transaction.</p><p><img src="https://lh5.googleusercontent.com/KdvFZXaCHwgKnftTezShgORtbT0uwB8O9C4JthctdYSDOz671rhgdHu8YrklF5wg3RviOKFJyxrSr95JN79XhR5Tq5fMzmh3OTerTHi8DnLpf4DV74sWhh_oQChPyViwrCigGazGx-_kHWO8UGS1UXRuinnhF0JQTtrvOgrIbHudUgEx_t8I93XEQ1sYtw" /></p><p><em>Source: Avalanche consensus whitepaper</em></p><p>Check out this <a href="https://tedyin.com/archive/snow-bft-demo/#/snow" rel="noopener noreferrer nofollow">visualization</a>: it’s pure beauty.</p><p>And here Steven Buttolf, Chief Protocol Architect at Ava Labs, explains it in detail:</p><react-video url="https://www.youtube.com/watch?v&#61;uiNK9-W_2Nw"></react-video><h3 id="4-avalanche">4.     Avalanche</h3><p>Avalanche is made of multiple Snowball instances incorporated as a protocol. Unlike Ethereum and Bitcoin, this protocol maintains a <a href="https://www.youtube.com/watch?v&#61;1Yh5S-S6wsI" rel="noopener noreferrer nofollow">directed acyclic graph</a> (DAG) with <a href="https://docs.avax.network/overview/getting-started/avalanche-consensus#vertices" rel="noopener noreferrer nofollow">vertices</a> that act like blocks in a linear blockchain. It has two major pros:</p><ul><li>Enhanced efficiency. A vote for a vertex &#61; a vote for all transactions in this vertex.</li><li>Improved security. It’s hard to undo previous decisions.</li></ul><p><img src="https://lh3.googleusercontent.com/YeN1mUiMizKozui1CdUUkuTiKgarjEO8U4czMg-zqJMcoh4sMpEx60nvh0EWtMkQQIZHXtvVXlXycPSYWqUTHPJlm4hvH5w6UKt3bl237dsU_Rz_Y0tU7NHimdrqcoNgTvYtqaqJsJFxBcuBu_NlpvnIR8Wh9B2kDwgDw5QkIs6GRMv5rkN7n5Ionwa7kA" /></p><p><em>Source: Avalanche consensus whitepaper</em></p><h3 id="what-is-snowman">❓What is Snowman?</h3><p>This protocol is a linear version of Avalanche, developed to meet the needs of the EVM. So, it doesn’t use a DAG structure.</p><h2 id="header-4">Why Avalanche is faster</h2><ul><li>Interoperable blockchains take on different tasks.</li><li>Using vertices allows voting on transactions in groups and not one by one. It helps increase transaction throughput.</li><li>Avalanche enables final and irreversible acceptance/rejection. That’s why it has almost <a href="https://www.youtube.com/watch?v&#61;Sfb8G54AM_4" rel="noopener noreferrer nofollow">instant finality</a>.</li></ul><h2 id="header-5">What are the use cases?</h2><p>Developers use Avalanche to build:</p><ul><li>Their own blockchains</li><li>dApps</li><li>Assets</li><li>Financial marketplaces</li><li>NFT marketplaces, and more.</li></ul><h2 id="header-6">What is AVAX?</h2><p>It’s Avalanche’s native token used to pay fees and rewards. Also, users stake the token to earn income. As of December 19, AVAX’s market cap is almost $3.72 billion.<br /></p><p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/4322654a1d664c31bf72ef3737586d1e.png" /></p><p><em>Source: CoinMarketCap</em></p><p>Unlike Ethereum, Avalanche burns all of its fees. At the time of writing, over <a href="https://burnedavax.com/" rel="noopener noreferrer nofollow">2 million AVAX</a> have been burned, which is worth more than $34 million.</p><p>AVAX contract address is FvwEAhmxKfeiG8SnEvq42hc6whRyY3EFYAvebMqDNDGCgxN5Z on the X-chain and 0xB31f66AA3C1e785363F0875A1B74E27b85FD66c7 on C-chain.</p><h2 id="header-7">Is Avalanche better than other blockchains?</h2><p>Well, it was initially built as an interoperable and highly scalable platform. So, developers tried to solve many issues that other blockchains face.</p><h3 id="pros">Pros</h3><ul><li>300x more transactions per second than Ethereum and over 600x more than Bitcoin.</li></ul><p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/2aa73e0f936f4ba78949a247945d113b.png" /></p><ul><li>The finality time is less than three seconds</li><li>Possibility to create custom blockchains and dApps</li><li>Compatibility with Ethereum tools ➡️ developers can easily transfer their Ethereum-based projects to Avalanche</li><li>Higher throughput capabilities</li><li>Lower latency</li><li>Interoperability</li><li>Resilience to 51% attacks</li><li>No slashing: validators don’t lose their stake if their nodes misbehave.</li></ul><h3 id="cons">Cons</h3><ul><li>Some of Avalanche’s advantages may turn into disadvantages. Since transactions are accepted or rejected in a few seconds, they can’t be reversed. In the Nakamoto protocol (Ethereum and Bitcoin) you have to wait up to an hour ➡️ transaction may be canceled before it is confirmed.</li><li>No-slashing policy means that validators have to decide on the staking lock-up period. The minimum is <a href="https://docs.avax.network/nodes/validate/staking#staking-parameters-on-avalanche" rel="noopener noreferrer nofollow">two weeks</a>.</li></ul><h2 id="header-8">Is it popular?</h2><p>Here’s some Avalanche stats. There’re nearly 500 <a href="https://www.avax-projects.com/" rel="noopener noreferrer nofollow">blockchain-based projects</a> with a<a href="https://hacken.io/services/blockchain-security/avalanche-smart-contract-security-audit/" rel="noopener noreferrer nofollow"> $5 billion</a> total value locked. These are DeFi projects, decentralized autonomous organization (DAOs), launchpads, hardware, <a href="https://oneart.digital/en/blog/what-nft-is-really-about" rel="noopener noreferrer nofollow">NFT</a> marketplace, NFT prediction market, and more.</p><p>Its ecosystem includes <a href="https://oneart.digital/en/blog/dexs-vs-cexs-which-to-choose" rel="noopener noreferrer nofollow">decentralized exchanges</a> SushiSwap with <a href="https://defillama.com/protocol/sushiswap" rel="noopener noreferrer nofollow">$569.13 million TVL</a> and Trader Joe (<a href="https://dappradar.com/avalanche/defi/trader-joe" rel="noopener noreferrer nofollow">$139,75 million TVL</a>), lending and borrowing platform Benqi (<a href="https://defillama.com/protocol/benqi-lending" rel="noopener noreferrer nofollow">$165,31 million TVL</a>), Avalanche wallet.</p><h2 id="header-9">What’s next?</h2><p>Due to network scalability, interoperability, and high speeds, Avalanche is considered a worthy Ethereum rival and even its “<a href="https://www.coindesk.com/learn/what-is-avalanche-a-look-at-the-popular-ethereum-killer-blockchain/" rel="noopener noreferrer nofollow">killer</a>.” Its plans are not limited to DeFi. In March, Avalanche Foundation launched <a href="https://medium.com/avalancheavax/avalanche-foundation-launches-multiverse-an-up-to-290m-incentive-program-to-accelerate-growth-of-c815ac5692c7" rel="noopener noreferrer nofollow">Multiverse</a> — an up to $290 million program to support not only DeFi, but also NFT space, and blockchain-based gaming.<br />It’s already on that path. In October, Ava Labs <a href="https://medium.com/avalancheavax/japanese-media-giant-gree-to-build-web3-games-and-run-nodes-on-avalanche-7a5cee4ce10b" rel="noopener noreferrer nofollow">teamed up</a> with GREE to create Web3 games on Avalanche blockchain and run gaming subnets. The same month, OpenSea <a href="https://medium.com/avalancheavax/opensea-launches-support-for-avalanche-expanding-access-to-avalanche-nfts-e98e58ee81a" rel="noopener noreferrer nofollow">began supporting Avalanche</a>. It now gets a great chance to expand its NFT community, which has seen a 180% total NFT volume increase from Q2 2022.</p><h3 id="follow-official-oneart-channels-to-find-the-latest-info-and-updates">Follow official OneArt channels to find the latest info and updates:</h3><ul><li><a href="https://twitter.com/art_wallet" rel="noopener noreferrer nofollow">Twitter</a></li><li><a href="https://t.me/art_wallet" rel="noopener noreferrer nofollow">Telegram Group</a></li><li><a href="https://t.me/artwallet_official" rel="noopener noreferrer nofollow">Telegram Announcements</a></li><li><a href="https://coinmarketcap.com/community/profile/OneArt" rel="noopener noreferrer nofollow">CoinMarketCap Community</a></li><li><a href="https://www.linkedin.com/company/oneart/" rel="noopener noreferrer nofollow">LinkedIn</a></li><li><a href="https://www.youtube.com/&#64;oneart5089" rel="noopener noreferrer nofollow">YouTube</a><br /></li></ul>

Avalanche Explained. How Does It Work & Is It a Breakthrough?

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