Avalanche. While having nearly no promotional and marketing material the AVAX token went from around 15$ USD to 135$ USD in about 6 months.
So, putting aside the fact that the Avalanche foundation announced a 180-million-dollar incentive (Avalanche Rush) to get people to try out their network, what is the secret behind this project and the runup it saw last year, you might ask.
First and foremost, one must understand how unique their proprietary consensus model is.
To put things simple, the network keeps itself close to the well-known proof of stake consensus model but offers some very standout features.
One of them is a sub-sampled form of voting in which a large group of people who volunteer to participate in the network get random assignments such as for example checking and rewriting things in their own words.
As such, small, completely random subsets of validators are asked if they think the transactions would be accepted as valid or rejected.
Validity in turn derives from something known as “network gossip” which happens as participants constantly exchange info back and forth, thus continuing to validate or reject transactions.
In stark contrast with the proof of work and the proof of stake consensus mechanisms, in this case, it doesn’t really matter how many nodes are out there, nor how many people are in the system as consensus will be reached within a specified time frame.
Moreover, Avalanche’s consensus mechanism makes it less prone of being attack as it greatly differs from Bitcoin’s (where 51% control of all the network’s computers would allow one to attack it) or Ethereum’s (in which control of 51% of the total amount of staked tokens would open the possibility of an attack). In the case of Avalanche, one would need to establish control at least 80% of the network.
The model also comes with the added bonus of allowing up to 4500 transactions per second per subnet, leaving Bitcoin and Ethereum pale in comparison.
The network’s infrastructure
In terms of infrastructure, Avalanche features one primary network which in turn has three built-in blockchains.
The first one, known as the X chain, allows for creation management and token transaction.
The C chain, in turn, means smart contracts. It is an exact copy of the Ethereum virtual machine, meaning that developers can move their work by simply copying and pasting their Ethereum dApps on to it and immediately start using them on the Avalanche network.
Finally, there’s the P chain, also known as the platform chain. The P chain was specifically made for management of the subnets and coordinating with all the validator nodes and staking mechanism.
What are subnets and what makes them so promising?
Each subnet represents a new network in the Avalanche universe, meaning that the system is scalable in various ways as each subnet can have multiple blockchains, either public or private (with their own consensus model and virtual machine), exactly in the same manner as the primary Avalanche network.
This means that anyone has access to the raw power of a blockchain with their own rules but without having to waste time, money, and resources on its groundwork.
The bear case: The pre-sale
AVA labs pre-sold 127 million coins at launch.
Those coins were subject to what is known as an unlocking period, meaning that there are possibly many investors waiting for their coins to unlock and sell them at a massive profit.
The coins cannot be dumped all at once and there is actually an unlocking schedule which potential future investors should take a look at before committing.
Wrapping up
Avalanche is a unique crypto project which allows people to go out there and create their own subnets of blockchains for any use they see fit.
This obviously means that any business, government, team, or brand can create public or private projects using the AVAX network and its consensus mechanism.
Adoption will be leading indicator going forward and things are certainly very exciting for the Avalanche Rush incentive and the Avalanche project altogether.