Avalanche is a smart contract enabled layer 1 blockchain that provides high-speed transactions at low cost.
Avalanche targets three types of customers:
- Users who want to transfer crypto assets
- Developers who want to build a dedicated blockchain, either private or public,
and want to integrate digital identity processes, document tracking, or issue a central bank digital currency (CBDC).
This article will guide you through all aspects of the Avalanche blockchain, which One of the most talked about DeFi ecosystems in 2022.
Avalanche: Protocol overview
Avalanche started in 2018 as a research project by a team called Team Rocket. That year, software engineer and computer science professor Emin Gün Sirer founded Ava Labs to undertake the project with a team of researchers at Cornell University.
To conclude the research phase in late 2019, Ava Labs held several private and public sales to raise funds for the development of the blockchain. 360 million AVAXs were sold for $0.30 during the seed sale, $0.50 during the private sale, and $0.85 during the public sale.
ICO closed in July 2020, raised over $40 million. In April 2022, Ava Labs began fundraising to to reach a $5 billion valuation.
It should be clear by now that choosing c-chain over x-chain will result in the loss of your funds with no chance of getting them back.
In addition, x-chain can interoperate with Avalanche’s subnets (we will explain this in another section) and allow users to create “Digital Smart Assets,” including digital representations of real stocks, commodities, and resources such as stocks or bonds.
Contract Chain (C-Chain)
c-chain is for DeFi purposes. It allows users to create smart contracts compatible with the Ethereum network. Note that the addresses used by c-chain are similar to Ethereum’s strings, starting with 0x, and are compatible with MetaMask.
p-chain allows users to stake AVAX to become a validator (the minimum amount a validator must stake The number of coins is 2000 AVAX). The chain monitors and coordinates all validators in the Avalanche ecosystem and distributes rewards to validators and delegators.
p-chains also enable developers to create new subnets and track their performance.
Avalanche allows developers to create subnets: sovereign blockchains that can issue them tokens and their respective economies, such as distribution and network fees.
In general, developers can customize the subnets according to their needs, and have a good understanding of governance and DAOs (Decentralized Autonomous Organizations) , set your own rules in terms of security properties, membership and virtual machines. The validators on the
subnet are a subset of the validators of the Avalanche network that work together to be on one or both subnets reach a consensus. However, subnets may require validators to meet certain conditions and requirements. For example, by knowing your customer (KYC) checks and proving that they are located in the country they claim to be in.
Avalanche Proof of Stake and Yeti Protocol
Avalanche usesProof-of-Stake (PoS) consensus algorithm. It relies on thousands of users, also known as network nodes, acting as validators. These validators need to stake a certain amount of AVAX before they can vote and validate new transactions entering the blockchain.
However, Avalanche’s PoS mechanism is based on DAG.
Avalanche’s x-chain achieves its high transaction throughput through a mechanism called DAG (Directed Acyclic Graph). A DAG is a form of Distributed Ledger Technology with a different data structure than a blockchain.
DAG consists of vertices and edges, allowing transactions to be recorded on top of
Previous trade. In other words, all new transactions must refer to previous transactions in order to be successfully confirmed, rather than being aggregated in one block, as shown in the following diagram: