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What is Avalanche (AVAX) Blockchain? A Complete Overview

By Handsome Bob | AUG 29, 2022

What is Avalanche (AVAX) Blockchain? A Complete Overview 10:00 Min Read

What is Avalanche (AVAX) Blockchain? A Complete Overview

Avalanche is an EVM compatible blockchain that is attempting to provide novel solutions to problems that the current Ethereum blockchain has struggled to solve. Mainly, Avalanche is attempting to be better customized for DeFi and GameFi applications with EVM being the short form for the Ethereum Virtual Machine; meaning that Avalanche is compatible with projects that run on Ethereum Mainnet, and protocols can be coded in Solidity a popular smart contract language used to interact with EVM-compatible blockchains.

When did the project launch? 

Launched to Mainnet – Sept. 2020 by Ava Labs, which was co-founded by Emin Gün Sirer, a computer science professor at Cornell University, Kevin Sekniqi, a Ph.D. student, and Maofan “Ted” Yin; Avalanche promised quicker finality, greater DeFi, and lots and lots of subnets. When you get right down to it, Avalanche is all about the subnets, the GameFi, and the KYC(Know Your Customer).

Avalanche has been forced to pivot even harder during this current bear market towards GameFi and KYC, and it shows with announcements for Shrapnel, a AAA first-person shooter game, and further Metaverse investments. Subnets allow customization to suit the specific purposes of the client, but best of all you get a gasless environment on the Subnet – allowing players to trade p2p with each other and through marketplaces without fear of unpredictable gas fees.

When I first hear about a new EVM-compatible chain I do tend to gag a bit – there is a natural inclination to roll your eyes and think to yourself ‘Oh no! another one.’ If you are newer to the crypto space, I will warn you that there are countless facsimiles and copycats, but I will give Avalanche credit – they do seem to have carved out some new territory within the realm of numerous new Layer 1 blockchains. This is not an easy task.

  • Avalanche breaks down into the following (3) chains that allow for their unique consensus mechanism.

You can think of this as blockchain Inception or Russian nesting dolls. Within Avalanche live subnets or mini-blockchains. This allows for the use case of blockchains as a service or BaaS. There is still a lot of work to do regarding on-chain governance, but the same could be argued for all the major blockchains.

The key will be to retain the interest of developers moving forward and avoid the dreaded ‘ghost chain’ moniker all blockchains fear. Currently, things look to be progressing well, but with the market currently tanking – it will be difficult to control the burn rate and maintain developer interest.

X-Chain (Create/Swap Assets) – Exchange Chain

The X-Chain is used to create and transfer digital assets. This also allows cross-chain subnet transfers. The X-Chain utilizes the Avalanche consensus protocol. The consensus mechanism is unique and explained in more detail below.

P-Chain (Subnets/Validators) – Platform Chain

The Multiverse Incentive Fund is designed to accelerate the growth of a new Internet of subnets. (Individual blockchains within Avalanche).

Avalanche is carving out its niche in the sea of L2s, EVM-compatible blockchains, and enterprise solutions currently available. The P-Chain allows the launching of individual blockchains that may communicate with each other via customized EVMs. These are the subnets. These run on the Snowball consensus and allow the blockchains to communicate with each other, but allegedly in an internal gasless method.

C-Chain (Smart Contracts/EVM) Contract Chain

Avalanche Rush for example – another initiative from Avalanche was designed to increase DeFi adoption on the chain. “Avalanche Rush kickstarted the second wave of DeFi growth on Avalanche. Since launching on August 18, 2021, total value locked (“TVL”) on Avalanche has increased from $312M to almost $16B, with unique addresses growing from 137K to 2.2M, and transactions soaring from 4M to 112M.” (Avalanche Medium page)

The C-Chain runs a modified EVM to allow quick launching of Ethereum dApps, again the focus seems to be on time to finality and focus on performance in gasless systems within Avalanche.

Although there are equally valid questions about why Avalanche isn’t just going to end up being just one more Blockchain as a Service solution (BaaS). I would argue that if you’re looking to invest in a long-term project this is not the worst way to go, albeit it will not earn you many decentralized friends on crypto Twitter. The new pivot seems to make sense and explains the focus of the new Multiverse Incentive Fund.

Multiverse Incentive Fund (4 million $AVAX) (Q1 22)

Focused on the C-chain. Focusing on blockchain-enabled Gaming, DeFi, NFT, and institutional use cases. Defi Kingdoms, Ascenders (very nice art), Shrapnel, Imperium Empires, Heroes Chained, Crabada are a few of the current games being built on $AVAX. Ava Labs, a core developer on Avalanche, is working with Aave Companies, Wintermute, Jump Crypto, and others to build the first horizontally integrated blockchain specifically engineered for Institutional DeFi with native KYC functionality.

I feel like they will be competing a lot with Fantom $FTM and Solana $SOL for this business, and if you see Jump Crypto involved – best you pay attention. Unfortunately, in my opinion, it feels like Avalanche is going to be the KYC GameFi/DeFi chain with more of a web 2.5 feel. This isn’t necessarily a bad thing, I’m just more of a decentralized purist.

Subnets will fix everything on Avalanche it seems, although I’m not as bearish on it as some of my friends on CT. They can make a lot of revenue simply by serving the inevitable rush (in my opinion) of Web2 companies trying to have their own BaaS (Blockchain as a Service). Showing any real market fit at this time is just going to speed up the process of blockchains like Avalanche being annexed into the Fiat web 2.5 systems. If last year was the year of L1s – then this year is the year of L1s getting bought into hard by web2.

Avalanche’s top speed is not known as they tend to talk more about the blazing speed you can get from launching on a subnet. This is mostly due to Avalanche’s unique consensus mechanism; it is a combination of (4) mechanisms: Slush, Snowflake, Snowball, and Avalanche. These mechanisms, without going into too much math, are the secret sauce that allows Avalanche to achieve their quicker time to finality. I can imagine that in GameFi, time to finality would be very important as you don’t want to have items in-game be questionably here, or there.

Imagine a player has acquired a set of equipment and/or NFTs, has completed their objective, and has sent this item to their friend p2p, or bought it off the customized subnet market. Snowball consensus is used for the P and C chains, while the Avalanche consensus is used for the X-Chain.

“The core idea of the consensus is to guide all the nodes into one common outcome via a systematic and recurring sub-sampled voting process. This mechanism ensures a high probability that all nodes will fall into the same outcome after more than one round. Due to its exponentially decaying feature, the chances of it still being divided after more than one round is astronomically small; this allows for instant finality of transactions (>2 seconds).” (

This current trend of customizable, gasless, EVM-compatible L2-style blockchains seems to be the turning point for L2s in the Ethereum blockchain space. Solana in late 2021 looked to be the GameFi heir apparent, but with AAA GameFi darling Star Atlas looking more and more like an expensive NFT utility project – the moment is ripe for competitors like Avalanche to seize the moment. Carpe DiemFi!

More on Subnets

If you think of subnets as a virtualized copy of Avalanche you would be halfway home. I first read about these concepts with Fantom in late Q4 2021. There is a developing BaaS (Blockchain as a Service) industry being created as you read this and it seems we are at the MySpace/Facebook intersectional point where only one, or two products will survive; while the remaining products will most likely be accumulated via mergers and acquisitions.

If we go to we can see that there is a larger allocation in the United States and Germany, some more in Europe, but this would lead me to believe that there is reasonable developer support in these countries. From a strictly retail viewpoint, I could see a lot of money for BaaS for Avalanche and Fantom. Capitulation might be progress, or not. Hard to say these days with the international monetary volatility. Currently, I’m seeing game developers Shrapnel having Subnets, and Ascenders. If the subnets are going to work out for Avalanche, it looks like we’re going to find out soon. During this bear market, it’s going to be very important for Avalanche to differentiate themselves from Ethereum L2s such as Arbitrum, Optimism, Polygon.


Looking at the ecosystem of Avalanche I pulled up the 186 different tokens on $AVAX as of the week of May 9th. Not exactly an impressive list, but in this current environment – just being alive I feel is an accomplishment. I would describe the ecosystem as what Solana looked like in mid-2021. You have Trader Joe ($JOE) – the most identifiable trading platform on Avalanche. It’s a nice combination of trade, pool, farm, lend, launchpad, staking, and even some NFT action. The theme is wholesome, and it’s just very well put together.

There is Pangolin $PNG, a decent volume DEX with reasonable numbers, and Platypus ($PTP), a stablecoin swap solution – although the roadmap ended in Q4 2021?!? Yeti Finance has a nice little stablecoin $YUSD although currently, it is having trouble holding its peg as are most of the lower tier stablecoins at the moment. You have the popular in the past: Dani-coins: $TIME, $MIM, $ICE, $SPELL, also BENQI ($sAVAX) Liquid Staking.

In conclusion, it’s becoming clear that Subnets are the main sellable asset from the $AVAX ecosystem. AAA game developers seem to like the idea of having your own subnets run your own little private blockchains with your own parameters and settings. By creating a gasless, gaming blockchain environment that is EVM compatible; Avalanche might just jump ahead with their connected investors, willingness to take risks, and urgency in pivoting to a new KYC GameFi/DeFi narrative. It might not satisfy the crypto purists, but it might just make people a lot of money.

Blockchains nesting inside blockchains is a very interesting idea, but although a novel, and creative idea it will take time to see if it pans out to be superior to the traditional databases and AWS services currently serving the gaming industry. I can see a lot of institutional latecomers jumping into an Avalanche Subnet if they miss the boat on partnering up with their own L1 blockchains.

Currently, Avalanche has interest from Deloitte, Mastercard, and some large backers in crypto. If anyone has a chance at the KYC Defi/GameFi landscape, it’s Avalanche.

Frequently Asked Questions

How do I buy Avax Token?

If you would like to know How to Buy Avalanche (AVAX) Token you can visit a Centralized Exchanges such as AscendEX, Binance, and FTX.

How do I stake AVAX?

You can stake Avalanche (AVAX) via a Centralized Exchange, or directly by reading Avalanche’s staking documents and choosing a validator or running a node.

How do I keep up with the latest news on AVAX Ecosystem?

Emin Gün Sirer, one of the founders is pretty active on Twitter @el33th4xor

AVAX vs ETH, what’s the difference?

The difference is that you are trusting Avalanche’s novel consensus mechanism and chains to be superior at delivering faster finality, better GameFi for game developers, and a reliable fee structure.

AVAX vs SOL, what’s the difference?

The main difference is that Solana runs on Proof of History, whereas Avalanche is an EVM-compatible blockchain that is coded mainly with Solidity developers, Solana is coded mainly in Rust and pulls from a larger developer base due to that fact.

Author: Handsome Bob

The older and wiser Bob of the duo. He chooses to spend his time buried in history books to further understand mankind and the various ways he is governed. He’s determined to apply this worldly knowledge to its decentralized autonomous counterpart but must finance this through his writing.

Education: Masters in Cardano

Crypto Class of: 2021

Fun Fact: Older than sand

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