什么是Avalanche (AVAX)？

Avalanche is committed to improving scalability without compromising speed or decentralization. Its core platform consists of three blockchains: the Exchange Chain (X-Chain), the Contract Chain (C-Chain), and the Platform Chain (P-Chain). The X-Chain is used for creating and trading assets, the C-Chain for deploying smart contracts, and the P-Chain for coordinating validators and subnets.

One of the most significant breakthroughs of this protocol is the Avalanche consensus, where validators use repeated sampling votes to reach fast and affordable consensus. Avalanche also employs subnets as a new method for horizontal scaling, allowing the creation of customizable and interoperable blockchains. The number of possible subnets is unlimited.

Introduction

In recent years, blockchain technology has continuously evolved, providing innovative solutions to longstanding issues such as scalability, interoperability, and practicality. Avalanche has also launched its own solutions, designing three independent blockchains within its main platform. Avalanche claims to be the “fastest finality smart contract platform in the blockchain space,” based on its native token AVAX and multiple consensus mechanisms. In this article, we will explore the factors behind this claim and the solutions offered by Avalanche.

When was the Avalanche project launched?

Avalanche was founded in September 2020 by Ava Labs in New York. Ava Labs has raised nearly $300 million, and the Avalanche Foundation has conducted private and public token sales totaling $48 million. The founding team includes Kevin Sekniqi, Maofan “Ted” Yin, and Emin Gün Sirer.

What problems does Avalanche solve?

Avalanche primarily addresses three major issues: scalability, transaction fees, and interoperability.

Scalability vs. Decentralization

For a long time, traditional blockchain projects have struggled to balance scalability and decentralization. As network activity increases, congestion can occur rapidly. Bitcoin(BTC) is a typical example: during periods of network congestion, completing a transaction can take hours or even weeks.

One way to solve this is to increase centralization, granting higher permissions to a select few to validate network activity for faster speeds. However, decentralization is crucial for blockchain security. New blockchains attempt to address this through technological improvements, and Avalanche offers a unique approach, which will be detailed below.

High Fees

Another common issue on large blockchains like Ethereum is gas fees, which can rise with traffic. This ultimately discourages users from utilizing these blockchains, though their ecosystems remain immature. For example, Ethereum remains popular, and no strong competitors have emerged, leading to network congestion and high transaction costs. At times, the average fee for a simple transfer on Ethereum exceeded $10, and for complex smart contracts, fees could surpass $100.

Interoperability

Different projects and businesses have varying needs for blockchain platforms. Previously, blockchain projects could only choose between Ethereum, standalone blockchains that cannot be customized, or private chains. Finding a balance between customization and multi-chain collaboration has been a challenge in the industry. Avalanche’s solution is the subnet, which shares the same security, speed, and compatibility as the main network.

How does the Avalanche network operate?

Avalanche employs a combination of solutions, consisting of three interoperable blockchains: X-Chain, C-Chain, and P-Chain.

1. The Exchange Chain (X-Chain) handles the creation and trading of AVAX tokens and other digital assets. Transaction fees are paid in AVAX, and the chain uses the Avalanche consensus protocol.

2. The Contract Chain (C-Chain) allows developers to create smart contracts for DApps. It implements an instance of the Ethereum Virtual Machine (EVM), supporting EVM-compatible DApps. The C-Chain uses the Snowman consensus protocol, a modified version of the Avalanche consensus.

3. The Platform Chain (P-Chain) coordinates network validators, tracks subnet activity, and supports the creation of new subnets. It also uses the Snowman protocol.

Avalanche assigns different functions to each blockchain, which enhances speed and scalability compared to processing all operations on a single chain. Developers can tailor the consensus mechanism to each chain’s needs. Users stake AVAX to pay network fees, creating a shared asset within the ecosystem.

How does Avalanche’s consensus mechanism work?

Avalanche’s two consensus protocols share many similarities. This dual-system operation is key to improving network scalability and transaction speed.

Avalanche Consensus Protocol

Traditional consensus protocols like Proof of Work (PoW), Proof of Stake (PoS), and Delegated Proof of Stake (DPoS) require leaders to facilitate consensus, but Avalanche’s consensus is quite the opposite. It enables the Avalanche network to be highly decentralized and scalable. Unlike traditional protocols where a single party processes transactions and others verify, Avalanche’s approach involves multiple validators.

Avalanche employs a directed acyclic graph (DAG)-based consensus protocol. DAG supports parallel processing of transactions. Validators sample other validators to confirm whether they have validated new transactions. Through multiple rounds of random sampling, statistical evidence shows that the likelihood of transaction fraud is nearly zero.

All transactions are confirmed immediately without additional steps. The hardware requirements for running validator nodes and verifying transactions are very low, attracting many participants and helping improve performance, decentralization, and environmental friendliness.

Snowman Consensus Protocol

Snowman is based on Avalanche’s consensus but uses a linear transaction validation process. This approach is particularly effective for handling smart contracts. Compared to the Avalanche consensus, Snowman also involves the block creation process.

AVAX Token

AVAX is the native token of the Avalanche network, with a total supply of 720 million. All transaction fees paid on the network are burned according to a deflationary mechanism, benefiting the broader Avalanche community. AVAX has three main use cases:

1. You can stake a certain amount of AVAX to become a validator or delegate tokens to other validators. Validators can enjoy an annual yield of 10% (APY) and charge a management fee from delegates, which can be set freely.

2. AVAX serves as a universal unit for subnets, helping to improve interoperability.

3. AVAX can be used to pay transaction fees and subnet subscription fees.

How to stake AVAX tokens?

AVAX holders can become validators or delegate tokens to other validators to earn rewards. To become a validator, users need to stake 2000 AVAX.

Validator nodes have very low hardware requirements; a standard personal computer is sufficient. When you delegate AVAX to a validator, you earn rewards after the validator confirms transactions successfully.

Customizable Blockchains on Avalanche

Avalanche offers functionalities similar to Ethereum and other Layer 1 blockchains. Developers can create tokens, NFTs, and DApps. Users can stake tokens, validate transactions, and access over 400 DApps. Supporters believe Avalanche’s advantages stem from improvements to these features. Additionally, Avalanche supports creating “subnets,” which are interoperable, customizable blockchains.

Using highly scalable subnets, enterprise-grade blockchains can meet the needs of large organizations. Many companies are already building subnets. This allows large enterprises and small independent operators to interact with other users in the rich ecosystem and leverage the security of the Avalanche mainnet.

Avalanche has its own virtual machine, the Avalanche Virtual Machine (AVM), which is compatible with the Ethereum Virtual Machine (EVM). Developers familiar with Ethereum’s Solidity language can quickly adapt to Avalanche’s environment, making it easy to port existing projects.

How does Avalanche differ from other scalable blockchains?

The questions and solutions we’ve discussed are not unique to Avalanche. Competitors like Ethereum, Polkadot, Polygon, and Solana have also proposed similar scalable platforms and interoperable blockchains. So, how does Avalanche stand out?

Consensus Mechanism

Its most distinctive feature may be the Avalanche consensus mechanism. However, Avalanche is not the only blockchain using innovative consensus protocols. Solana, for example, employs Proof of History, claiming transaction throughput of up to 50,000 TPS, far exceeding Avalanche’s official 6,500 TPS. But TPS is only one metric for network speed and does not determine transaction finality.

Transaction Speed and Finality Time

Another highlight of Avalanche is its finality time of less than 1 second. What does this mean? To reiterate, when measuring network performance, TPS alone is insufficient; transaction finality—how quickly transactions cannot be reversed or altered—is equally important. Even if a network can process 100,000 transactions per second, delays in finality can slow down the network. Avalanche claims to have the industry’s fastest finality time.

Decentralization

Avalanche also has a unique aspect in its level of decentralization. Given its scale and age, it has a large number of validators—over 1,300 as of April 2022—thanks to its reasonably low requirements. As AVAX’s price continues to rise, the entry barrier for validators also increases.

Interoperable Blockchains

Avalanche’s interoperable blockchains have no potential limit in number, directly competing with Polkadot, which also offers customizable and interoperable blockchains. However, Polkadot’s parachain slot auctions are limited, whereas Avalanche only requires a simple subscription fee.

Summary

Decentralized finance (DeFi) platforms seek alternatives to Ethereum. With EVM compatibility and low fees, Avalanche is highly attractive. However, many other platforms have already provided solutions for scalability and speed.

Since its launch, Avalanche has gained popularity, with daily transaction volumes approaching those of Ethereum. Whether it can compete with other blockchains like Solana or Polygon remains to be seen.

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