This is Part 2 of the Avalanche beginners guide series. In Part 1, we answered three popular questions about the blockchain. In this second part, we will answer another four popular questions about this project.
So, let’s dive straight into Avalanche.
Another Subnet has entered the game 🎮
Popular gaming DAO @MeritCircle_IO is launching @BuildOnBeam, an Avalanche Subnet designed specifically for Web3 gaming.
What will Beam offer? 🧵👇 pic.twitter.com/AmFcjwyLVl
— Avalanche 🔺 (@Avax) April 18, 2023
AVAX Use Cases
The AVAX token, the native token of Avalanche, has a couple of use cases. For example:
- Staking – This secures the blockchain. You receive rewards in AVAX.
- Pay gas fees – You can pay for the gas fees on the X-chain. This includes the complete network.
- Governance – Holding AVAX tokens allows you to vote on governance proposals.
🔺#Avalanche C-chain weekly on-chain status🔺
🔥Network Status
Transactions: 10240142 -27.18%
Max TPS Observed: 837 +10.04%
Gas Used: 6.20T +1.49%🔥Staking:
Staking ratio: 59.64%
Staking rewards: 8.46%
Total validators: 1,238
Total delegations: 85,262#AVAX $AVAX pic.twitter.com/YDLZq8QE3N— AVAX Daily 🔺 (@AVAXDaily) April 18, 2023
Top Avalanche Domains
Avalanche also has a domain name platform in its ecosystem. Like every self-respecting blockchain nowadays. The purpose of a domain service is to make it easier to read blockchain addresses. They become human readable. For example, addresses can look like this:
- P-Chain Address
P-avax1am4w6hfrvmh3akduzkjthrtgtqafalce6an8cr
- C-Chain Address
C-0x820891f8b95daf5ea7d7ce7667e6bba2dd5c5594
- X-Chain Address
X-avax1kj06lhgx84h39snsljcey3tpc046ze68mek3g5
A domain name service allows you to change these strings of letters and numbers. For instance, into “AlanJones.avax” instead. This is easier to remember and use in real life. We now take a closer look at Avvy Domains, the popular domain name service on Avalanche.
Avvy Domains offers ERC721 NFTs to store your domain names. You need to register your domain on their website. This comes with a price tag, which depends on the length of the chosen name. For example:
- 5+ characters: $5 USD per year
- 4 characters: $160 USD per year
- 3 characters: $640 USD per year
Be warned that prices can change, though. Renewals have the same yearly pricing as the registration fees.
How to Be a Validator in Avalanche
If you want to be an Avalanche validator, you must stake at least 2,000 AVAX. The current yearly return is 8.44%. There are 1,265 validators currently. If you run a node, the reward is around 0.5% higher. The platform doesn’t have a slashing feature.
As a delegator, you need to stake at least 25 AVAX tokens. The yearly reward is between 6.37% and 7.59%. This depends on how long you stake your tokens. The shortest period is 14 days, and the longest possible period is one year. The longer you stake, the higher your yield will be.
There are also liquid staking options. For instance, Benqi offers sAVAX. That’s their liquid staking token. The sAVAX allows you to earn more passive income. Benqi also doesn’t ask for a minimum amount of sAVAX to stake.
At launch, there was a max supply of 720 million tokens. However, the protocol burns all gas fees. This makes the token deflationary. It will become scarce over time. The current total supply is 422.6 million. Today’s AVAX price is $19.12 with a market cap of $6.2 billion.
The picture below shows the current staking information.
Source: Avalanche validators
How to Stake AVAX
You can stake AVAX in many different ways. However, the official way is with wallet.avax.network. This is a secure and non-custodial wallet. The current yearly reward is 8.44% as a validator. As a delegator, the rewards are lower. Currently, between 6.37% and 7.59%. This depends on how long you stake.
Validators and delegators alike can only stake for one year at most. So, when delegating, be careful which validator you pick. If you choose a validator that only has two more weeks in his staking period, you will receive low rewards.
Another point of concern is the validator’s commission. Most validators charge 10%. However, there are also validators that charge up to 50%. So, select your validator with care. In case your validator charges 10%, on an 8.44% APR, you only receive 7.596% APR. For an extensive explanation on how to set up your wallet and delegate, read this guide. The following video may also be helpful.
Conclusion
In this second part of our Avalanche beginners guide, we looked at four popular questions. These include how you can become a validator. We also looked at how you can stake your AVAX. Furthermore, we looked at the Avvy Domain service and use cases of AVAX.
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