Avalanche
Short review of the project
Another project that we think you should pay attention to is Avalanche. We are also their validators. Avalanche is a level 1 blockchain, which is a platform for smart contracts. Now it’s on the 10th place in the rating of cryptocurrencies on the CoinMarketCap website.
Back in 2018, a group of anonymous developers called “Team Rocket” created a consensus mechanism “The Snow”, which is now used by Avalanche. In 2020, the Avalanche project itself was published. The authors were Emin Gün Sirer, Kevin Sekniqi and Ted Yin. It should be noted that Emin Gün Sirer is quite a notable figure in the crypto world. He is a professor of computer science and a software engineer at Cornell University. Around 2002, Gün, as he is more often called, together with some other crypto enthusiasts, developed a conceptual peer-to-peer virtual currency called “Karma”. He also took an active part in the Cypherpunk movement.
Cypherpunk is any individual advocating widespread use of strong cryptography and privacy-enhancing technologies as a route to social and political change. Originally communicating through the Cypherpunks electronic mailing list, informal groups aimed to achieve privacy and security through proactive use of cryptography. Cypherpunks have been engaged in an active movement since at least the late 1980s.
Gün also discovered serious security flaws in the DAO shortly before its collapse. In short, he is a tough man who, together with his colleagues from Cornell University, founded Ava Labs. In 2020, an ICO was held and the mainnet was launched. In the crypto world, some consider Avalanche as another potential killer of Ethereum. But at least it’s definitely his competitor. The project describes itself as “the fastest smart contract platform in the blockchain industry, as measured by time-to-finality”. Avalanche aims to displace Ethereum from the pedestal of “the most popular platform for smart contracts”, offering users increased productivity, usability and compatibility. To achieve this, unique technologies are used, so let’s move on to how Avalanche works.
Technology
Avalanche solves the problems of existing blockchains using an original approach, using three different blockchains. With their help, Avalanche implements its own consensus protocol, which has some of the properties of classical consensuses (we mean Bitcoin and its PoW, and PoS), but also has some differences. Firstly, it’s the voting system with a sub-sampled voting. This means that the verification of transactions and the approval of the solution is carried out by a large group of validators who continuously exchange information among themselves. Secondly, it’s the rapid achievement of consensus regardless of the number of nodes involved in the verification. Thirdly, Avalanche network is reliably protected from attacks, since for this it is necessary to own at least 80% of the stake token. In most blockchains, it is necessary to own 51% of computing power for an attack.
A 51% attack is carried out when more than half of the computing power or hashing speed of mining in the network is performed by one person or one group of people
So this is how it works in the network. When a transaction is entered, the validator asks a random group of other validators whether it should be accepted or rejected. Validators vote either for or against if they consider a transaction invalid, conflicting with another transaction, or already rejected. The transaction is added to the list of valid ones, then the network conducts a sub-sampling voting system to achieve consensus. As soon as a sufficient number of validators vote for acceptance, the initial validator will be able to accept the transaction. If there are not enough votes in favor, the transaction will be rejected. The validity of the transaction is updated, and it is determined whether the level of confidentiality corresponds to the threshold value. In most cases, the transaction is quickly approved and completed. For conflicting transactions, validators are quickly grouped together to make a decision. This is how the Avalanche protocol works. It forces all nodes to work in parallel with each other. And repeatedly performing random checks increases the chance that the transaction is true. This approach facilitates the validator’s work, since they don’t need to analyze the situation from the very beginning.
Subnets
Avalanche uses subnets to quickly perform transactions. Subnets are small groups of validators confirming certain block chains running on the main Avalanche network. In fact, it is a new network in the Avalanche ecosystem, which can have several block chains and its own consensus model, or even its own virtual machine. Subnets can be public or private. Creating a subnet allows to independently configure rule sets for validators, which is a significant advantage for users, customers, and can be successfully used for business and even for government agencies. To verify their subnet, users also contribute to the verification of the entire network through three main chains.
The use of subnets makes it possible to increase the security of certain blockchain functions without compromising the decentralization and anonymity of the main Avalanche network.
Blockchains
So, Avalanche has three separate blockchains, each of them has a specific goal and objectives.
1. X-Chain (Exchange Chain). This chain is used to create, manage and trade assets (including the platform’s own token). It’s based on the DAG model.
DAG (Directed Acyclic Graph) is a consensus mechanism that uses nodes and groups of nodes that work simultaneously, instead of storing data in blocks. This is similar to a file directory where folders can have subfolders that branch into the corresponding subfolders and so on. Acyclic in this case means that no node can refer to itself. Each node can consist of several transaction levels. Each new transaction registered in the node is verified by the two previous transactions. This means that there is no need for miners, since the node itself is a miner. This approach reduces the number of unnecessary checks, and reduces transaction fees to zero.
2. C-Chain (Contract Chain). It’s a blockchain for creating smart contracts. It uses the Snowman consensus protocol, which we will describe in more detail below. This is a copy of the Ethereum virtual machine, which provides the development of dApps using the Avalanche protocol.
3. P-Chain (Platform Chain). This is a metadata blockchain that coordinates all validator nodes and a staking mechanism. It also uses the Snowman Consensus protocol and is designed to manage and create subnets. It feeds the Avalanche consensus protocol.
Snowman
So, now about Snowman. As we said, it’s used by the C and P chains.
Snowman is a consensus that is designed to provide and support smart contracts. It was created as an improved version of the Avalanche protocol. Snowman fully meets the needs of EVM, and it is optimized for smart contracts and high throughput. It means that it’s more specific, while Avalanche is intended for general use. In fact, this is a cool solution that allows to take into the needs of both users and developers using smart contracts.
Token
The platform’s own token is called AVAX. It’s a service token. It acts as a means of exchange in the ecosystem: for charging for transactions, encouragement and for management on the platform. And it is also used to protect the network (similar to PoS): users can stake AVAX and receive passive income, thereby supporting the network. Soon we will release a manual on how to lock an AVAX token. The total issue of 720 million tokens, which makes it a deflationary asset.
Advantages
What are the advantages of Avalanche after all?
Since we are comparing Avalanche with Ethereum, the first advantage is of course scalability. Avalanche processes transactions in a second. This speed puts Avalanche on an equal footing with the payment system giants such as PayPal and VISA. Avalanche blockchain allows processing up to 6500 TPS.
The second weak spot in the Ethereum network is its high commissions. There are commissions in Avalanche, but they are much smaller. Transaction fees are used for various network needs. For example, to create and mint assets, place stakes, create blockchains. These fees are burned, constantly reducing the amount of own token inside the platform.
The third important advantage of Avalanche is that it facilitates interaction with other forms of cryptocurrencies and data from other platforms. It allows different blockchains to exchange data.
And fourth, it’s user-friendliness and intuitive interface. Avalanche provides an opportunity for fast and inexpensive dApp development. Network technologies such as subnets, EVM and Ethereum standard RPC create a comfortable platform for users. Customers can create blockchains completely personalized to their needs. Avalanche supports multiple programming languages and multiple virtual machines to align with multiple deployment scenarios.
As for security, Avalanche has thousands of validators around the world. Decentralization at the highest level: Avalanche does not require users, developers and miners to know each other or trust each other under certain conditions. Avalanche avoids disagreements between users with different interests and motives. Anyone who purchases their own platform token can immediately join the network. Any token holder gets the right to vote when making decisions within the network and can contribute to its development. Well, as we said earlier, there is a need to control up to 80% of the network in order to carry out an attack.
Avalanche offers peer-to-peer lending and trading. It ensures the smooth operation of other financial assets and activities. And of course, it provides new opportunities for developers and creators of dApps on the blockchain.
Conclusion
We’ve been seeing and talking about Web3 a lot lately. But Web3 is not built on its own right away, we are approaching it step by step, each time making small (or large) progress. Avalanche is another step towards Web3. The platform aims to act as a central hub and exchange for future financial transactions, both crypto and traditional.
Avalanche is kind of similar to the hype Cosmos or Polkadot, but it undoubtedly has its advantages and differences. Among them are higher bandwidth, proprietary subnet technology, the use of multiple user virtual machines, and so on, all that we have described above. The Avalanche ecosystem is rapidly expanding. Large enterprises, private institutions, governments and financial institutions are implementing Avalanche protocol technology to optimize their core operations. For example, SushiSwap and TrueUSD have already integrated with Avalanche. Another example: the Wirex digital payment platform, which includes fiat and crypto currencies in more than 61 million locations worldwide, has announced the integration of Avalanche into its ecosystem
Recently, there was news that the Avalanche Foundation is launching an Avalanche Multiverse incentive program for $290 million (4 million AVAX). The program is aimed at developing the functionality of ecosystem subnets. Including Blockchain games, DeFi, NFT.
So we wish the project only the success. And we invite you to stake your AVAX tokens with our validator!
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