The Avalanche network attempts to improve scalability without compromising on decentralization. Three blockchains make up its mainnet: the X-Chain, C-Chain, and P-Chain.
The X-Chain is used for managing assets and uses the Avalanche consensus protocol. The C-Chain is for smart contracts creation and the P-Chain for coordinating validators. These two blockchains use the Snowman consensus protocol.
The Avalanche consensus protocol has all nodes work in parallel to check other validators’ transaction confirmations randomly. After enough repeated random subsampling, a transaction is probabilistically determined to be true. This improves transaction throughput to 6500 TPS and provides a sub-one-second finality time. Snowman is similar but works in a linear process with blocks.
Avalanche also allows for the creation of customized, interoperable blockchains. There’s no limit on the number, but you need to pay a subscription fee to operate one in Avalanche’s native token AVAX.
As blockchain technology develops, it provides new solutions to the old problems of scalability, interoperability, and usability. Avalanche has taken a unique approach with the use of three separate blockchains in its platform. Powered by its native token AVAX and multiple consensus mechanisms, Avalanche claims to be “the fastest smart contracts platform in the blockchain industry, as measured by time-to-finality”. In this article, we’ll look at the factors that lead to this claim and the solutions it provides.
When was Avalanche launched?
What problems does Avalanche solve?
There are three main problems Avalanche attempts to solve. These are related to scalability, transaction fees, and interoperability.
Scalability vs. decentralization
How does Avalanche work?
To solve the problems outlined, Avalanche uses a combination of methods that make it somewhat unique. To begin, Avalanche is actually made up of three interoperable blockchains: the X-Chain, C-Chain, and P-Chain.
With each blockchain taking on different roles, Avalanche improves speed and scalability compared to running all processes on just one chain. The developers have combined this aspect with two different consensus mechanisms tailored to the needs of each blockchain. Tying all of these blockchains together is Avalanche’s native utility token AVAX. Users need the token to stake and pay network fees, giving the ecosystem a common usable asset between different Avalanche subnets.
How do Avalanche’s consensus mechanisms work?
There are a lot of similarities between Avalanche’s two consensus protocols. However, each one is tailored towards its specific blockchain(s). This dual system is a key reason for the network’s improved scalability and transaction processing speed.
The Snowman consensus protocol builds on the Avalanche consensus protocol but orders transactions linearly. This property is beneficial when dealing with smart contracts. Unlike the Avalanche consensus protocol, Snowman creates blocks.
How do you stake AVAX?
The hardware requirements are low enough that most standard laptops or desktops should be suitable to begin validating. You can also stake tokens behind a validator and receive rewards when the validator successfully confirms transactions.
Customizable Avalanche blockchains
A customized blockchain using a highly scalable platform is well suited towards large enterprises’ needs. It’s even more convenient for custom blockchains to interact with others in an ecosystem and leverage their security. Avalanche has its own Avalanche Virtual Machine (AVM), which is also compatible with the (EVM). Developers familiar with Ethereum’s Solidity coding language can easily use Avalanche and also port over existing projects.
Each blockchain can have custom native tokens, and transaction fees can be paid with it. There is a creation fee paid in AVAX for creating a subnet and a blockchain. Subnet maintainers must also be validating in the primary subnet, in order to validate custom subnets.
How is Avalanche different from other scalable blockchains?
Transaction speed and finalization
One of Avalanche’s biggest claims is its commitment to decentralization. Compared to its size and age, it does have a large number of validators due to its reasonably minimal requirements. However, as the price of AVAX has risen, it’s become more expensive to become a validator.
Avalanche’s interoperable blockchains are also unlimited in number. This is in direct competition with Polkadot, one of the most famous projects offering customized and interoperable blockchains. Polkadot has limited space auctioned off in Parachain Slots auctions, whereas Avalanche works with a simple subscription fee.
With Decentralized Finance (DeFi) platforms looking for Ethereum alternatives, blockchains like Avalanche are attractive due to their EVM compatibility and low fees. However, DeFi platforms already have a long list of alternative platforms when it comes to scalability and speed. Avalanche has increased in popularity since its release, but whether it will be able to compete with other blockchains like Solana or Polygon is yet to be seen.