Investing in the blockchain and crypto space is one of the easiest ways to earn profit. However, despite the huge benefits, investing in the crypto space also has its fair share of pitfalls. It is important to understand the rudiments of a project before investing in it.
In line with this, we have covered important details about the popular ETH-compatible, Layer 1 blockchain Avalanche (AVAX). Providing interested persons with important details about the project to aid informed investment decisions.
In this article, you will find accurate answers to important questions such as – What is Avalanche (AVAX)? How to invest in Avalanche? Important details about Avalanche AVAX staking, liquidity provision, etc.
What Is Avalanche (AVAX)?
Avalanche (AVAX) is a Singapore-based L-1 smart contracts platform. Built by Ava Labs, it is designed as a conducive platform for developers to create and launch their dApps. Avalanche is also an ETH-compatible proof-of-stake (PoS) blockchain. Furthermore, the blockchain has three subnets. These subnets are charged with regulating the Avalanche primary network. Making it possible for the network to seamlessly offer its wide array of services with no lag in speed. Avalanche currently serves as the go-to chain for developers looking to launch custom-made blockchains.
Avalanche three subnets include:
- First, the Exchange Chain or X-Chain – facilitates the creation and exchange of tokens.
- Next, is the Platform Chain or P-Chain – this is a meta blockchain tasked with coordinating validators to track subnets.
- Lastly, is the Contract Chain or C-Chain – a perfect example of this is the Ethereum Virtual Machin (EVM). It helps in creating and launching smart contracts.
The native token of the Avalanche ecosystem is the AVAX token. The token has a maximum supply of 720 million AVAX. 50% of which was created in the Avalanche chain genesis block. As an anti-inflationary measure, Avalanche token fees are burned from time to time.
AVAX stakers are essential to the smooth running of the Avalanche ecosystem. This is because the Layer 1 blockchain makes use of a proof-of-stake (PoS) consensus mechanism. And therefore relies on network validators to stake AVAX tokens. Notably, validators on Avalanche have the opportunity to earn APY as high as 11% on their stakings. They also enjoy an annual return of approximately 9.75%.
The Layer 1 blockchain is also able to support a wide range of Web 3 protocols. Several Layer 2 projects are currently built on Avalanche. Some of these projects include DEXes like Trader Joe, NFT marketplaces, optimized yield platforms, lending and borrowing protocols like Curve, Nexo, etc.
How to Invest in the Avalanche Ecosystem?
- The first step to investing in Avalanche is to purchase AVAX tokens. AVAX is available for sale on centralized exchanges like Gemini, Coinbase, and Kraken, You can also purchase it on DEX platforms like Trader Joe, Rubic, and Pangolin.
- Next is to put your Avalanche tokens to work. You can do this by staking the token or by providing liquidity. Notably, staking on Avalanche currently incurs an average reward of approximately 9.75%. Staking also means that you become a validator on Avalanche.
Also apart from investing your funds, you can also invest by launching a dApp on Avalanche.
In conclusion, Avalanche is arguably one of the most innovative Layer 1 blockchains in the crypto space. Some of its most important products include the Avalanche Foundation, Ava Labs, Avalanche-X, etc. The blockchain is focused on becoming the fastest and cheapest Layer 1 smart contract platform in the blockchain space. Apart from its headquarters in Singapore, Avalanche also boasts of offices in both New York and Miami.
At the time of writing, AVAX was trading at $88.82, with a market cap of $21,804,358,263 and a 24-hour trading volume of $1,272,559,346. The token price is also down by 0.9% in the last 24 hours.
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