Before You Invest: Avalanche (AVAX)

Before You Invest: Avalanche (AVAX)

Before You Invest: Avalanche (AVAX)Here’s another article from our Before You Invest series! In this series, we’ll provide you with all of the information you need to know before investing in certain cryptocurrencies.

Avalanche is a Layer-1 blockchain that serves as a platform for specialized decentralized applications (dApps) and customized blockchain networks. Avalanche is a highly scalable blockchain with quick transaction speeds, low fees, and a multitude of use cases. Avalanche has developed its own ecosystem of dApps, decentralized finance (DeFi) protocols, a token bridge, and more since its launch in 2020. 

Here is a detailed rundown of everything you need to know about Avalanche and its token — AVAX — which can be bought and sold using BTSE’s exchange.

What is AVAX Coin?

AVAX is the native token of the Avalanche blockchain and serves as the ecosystem’s common medium of exchange across all subnets. Using AVAX across the network’s subnets creates interoperability between subnets that would otherwise need to use their own internal cryptocurrencies.

What can AVAX do?

AVAX can be used to pay transaction fees and enable smart contracts, but it can also be used in the creation of custom tokens and subnets and verification of transactions on the network through proof-of-stake (PoS). Blockchain developers can use Avalanche to deploy new NFT collections, DeFi protocols, games, and much more.

One feature of AVAX that is very appealing to users is the benefits of staking AVAX tokens. On top of the annual percentage rate (APR) of between 8% and 9% on the Avalanche network, staking AVAX brings security to the network and helps verify transactions. Running a validator node can be very expensive for most users as you need a minimum of 2,000 AVAX tokens, but your APR will be higher than staking to an existing validator. Most users opt to stake to an existing validator, which requires as little as 25 AVAX. By joining an existing validator, you are staking with a larger pool of investors.

AVAX holders also have the option to stake on dApps such as Beefy Finance, Pangolin, and Trader Joe to earn passive income.

AVAX can also be used in the governance of the Avalanche network. For example, AVAX users vote on where transaction fees are set and how fast new AVAX tokens are minted. To participate in Avalanche governance proposals, you must possess AVAX tokens.

Who founded Avalanche?

Avalanche was founded and launched by Ava Labs in 2020. Ava Labs was founded in 2018 at Cornell University by computer science professor Emin Gün Sirer, CEO, along with computer science Ph.D. students Kevin Sekniqi, COO, and Maofan “Ted” Yin, Chief Protocol Architect.

The founders of Avalanche created a blockchain network that consists of three individual built-in blockchain networks, each with its own functions:

  • Exchange Chain (X-Chain) — used to send and receive funds
  • Platform Chain (P-Chain) — used for staking AVAX and facilitating validator activities
  • Contract Chain (C-Chain) — used for smart contracts and dApps

These three networks are secured and validated by the Primary Network and are powered by AVAX.

How to add AVAX to MetaMask

MetaMask is one of the most popular online cryptocurrency wallets on the market. Users can log in to their Metamask wallet or create a wallet by using MetaMask’s browser extension or mobile app to access the Avalanche network. To add the Avalanche network to your MetaMask, you simply click “Add Network” and select “Avalanche Network C-Chain”.

Once you add Avalanche to your MetaMask, you can now transfer or bridge AVAX to your new wallet.

What is Avalanche Bridge?

Avalanche Bridge was launched by Ava Labs in July 2021 as a quick, secure, and cheap platform to bridge assets between the Avalanche and Ethereum blockchains. By using the Avalanche Bridge, users will have the opportunity to transfer funds, including AVAX, to and from Avalanche and Ethereum in one on-chain transaction. As a replacement to the Avalanche-Ethereum Bridge (AEB), the upgraded Avalanche Bridge saw significant decreases in fees, stronger security, and faster transaction speeds.

Please note that users must interact with the platform directly and follow the steps on the bridge. Sending tokens directly to the bridge contract will potentially lead to a loss of those tokens.

Where and how to buy AVAX?

AVAX is listed on the world’s top cryptocurrency exchanges.

Swapping for AVAX on BTSE’s exchange is an easy 5-step process:

  1. Log in to your personal account on BTSE. If you do not have a BTSE account, you can register here.
  2. In the “Spot” section, choose “AVAX” as one element of your trading pair.
  3. Choose the other element in the trading pair — you can define the stablecoin, fiat currency, or cryptocurrency that best fits your trading strategy.
  4. Select the type of order you want to place — limit or market — then enter the amount of AVAX you want to buy.
  5. Click “Buy Order.”

And then you’re done! Your new AVAX token balance will then be displayed in your wallet.

Final thoughts

The team at Ava Labs has created a fast, scalable, and cheap alternative to the Ethereum network and users have responded positively. While Ethereum is considerably larger than Avalanche, the blockchain network has continued to grow and innovate since its launch. This is certainly a project to keep an eye on.

Disclaimer

Any data, text, or other content on this page is provided as general market information and not as investment or financial advice. Past performance is not necessarily an indicator of future results.

 


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