05-21-2023 icon

Coin Spotlight: What is Avalanche (AVAX)

By Lucy Adegbe

Avalanche is a decentralized, open-source proof-of-stake blockchain with smart contract functionality. AVAX is the native cryptocurrency of the platform.

This product has gained popularity over time with AVAX appearing on the 17th spot of the CoinMarketCap index, trading at $14.29 at the time of writing.

  • It was founded in 2018 by Emin Gün Sirer, Kevin Sekniqi, and Jeremy Wood.
  • The company is headquartered in Palo Alto, California.
  • It has raised over $350 million in funding from investors such as Andreessen Horowitz, Polychain Capital, and Binance.
  • The project is currently used by a variety of decentralized applications, including SushiSwap, Aave, and Pangolin.

How Does it Work?

Avalanche is designed to be scalable, secure, and easy to use. It achieves scalability through its unique consensus mechanism, called Avalanche Consensus. Avalanche Consensus is a combination of three different consensus mechanisms: Snow White, X-consensus, and Proof of Stake. This combination of consensus mechanisms allows Avalanche to achieve high throughput and low latency.

Avalanche is also designed to be secure. It uses a variety of security features, including validators, staking, and time-lock contracts. Validators are responsible for securing the network and validating transactions. Staking is a process of locking up AVAX tokens in order to participate in the consensus process. Time-lock contracts are a way to prevent fraud and ensure that transactions are executed as intended.

Avalanche is easy to use. It has a simple user interface and a variety of tools that make it easy to develop and deploy decentralized applications.

Pros and Cons of Avalanche:


  • Scalable
  • Secure
  • Easy to use
  • Low fees
  • Active community


  • Still under development
  • Low adoption
  • High volatility

Here are some of the risks that investors should be aware of when investing in Avalanche:

  • The project is still under development, so there is a risk that it may not be successful.
  • Avalanche is a new project, so it has not yet gained widespread adoption. This could make it difficult to sell your tokens if you decide to invest.
  • The price of AVAX is volatile, so you could lose money if the price falls.

Overall, Avalanche is a promising project with a lot of potential. But just like every other crypto project, investors must conduct adequate research before entering the market.