Avalanche Blockchain— Spark* Your Knowledge

Date of Activity: 26 September 2022 (Monday)

Topic: Avalanche Ecosystem Overview

Author: Ashu Pareek

Source:
https://messari.io/report/avalanche-ecosystem-overview

Avalanche is a Proof-of-Stake (PoS) platform for building blockchains tailored for certain applications, smart contracts, and digital assets. The C, P, and X chains make up the Primary Network, the umbrella network of Avalanche. Today, the Contract Chain (C-Chain) is used to deploy the vast majority of Avalanche apps. Although Avalanche’s consensus increases speed and lowers costs, it does not offer a long-term answer for scalability. To achieve this, Avalanche gives projects the ability to build unique blockchain networks (subnets) using the Platform Chain (P-Chain. Last but not least, digital smart assets native to Avalanche can be created and moved using the Exchange Chain (X-Chain).

Many active projects are non-native, or cross-chain (e.g., Aave, Curve, etc.), thanks to the C-Chain’s EVM-compatibility and the strong bridge environment surrounding the Avalanche network. However, a portion of projects are native, which means they were created on Avalanche or that Avalanche is where they spend the bulk of their time. Where each project is deployed on the network is another way that they differ from one another. While most of the projects are still on the C-Chain, the first projects started deploying their own subnets through the P-Chain starting in April. By dividing traffic and isolating performance, these specialised, application-specific blockchain networks avoid projects from overloading the network. Better performance and customization options for fees, the validator set, the virtual machine, and other factors result in benefits for the projects.

Similar to projects, there are two types of organisations that support the Avalanche ecosystem: general and Avalanche-focused. The Avalanche Foundation is the most active member, having set aside tens of millions of AVAX over the past year to fund the expansion and development of the Avalanche ecosystem. Other Avalanche-focused capital allocators include Ava Labs, AVentures DAO, Avatar Ventures, and projects like Trader Joe and Avascan. In addition to individual financing rounds, its four wide-ranging initiatives to date have been, including Avalanche Rush, the Blizzard Fund, Multiverse, and the Culture Catalyst Initiative. The general public, angel capitalists, and investment corporations have been the other funding sources for Avalanche-based projects.

The C-Chain was prepared for a spike in decentralised finance activity thanks to its characteristics, particularly in terms of performance and compatibility. The release of Chainlink price feeds in June 2021 and the subsequent rollout of the incentive programme for mining liquid assets called Avalanche Rush were the other two triggers. Despite most of the activity is less than a year old, the ecosystem has already covered the majority of the primitives and is already transitioning into its experimentation phase. In spirit of decentralization, let’s also take a look at the widely used sets of decentralized exchange on Avalanche. Pangolin and Trader Joe, which are native to the Avalanche, are the two biggest general-purpose DEXs (by volume). Contrarily, Platypus Finance and Curve are the two biggest DEXs for trading assets with similar prices (such as wrapped assets and stablecoins).

Ava Labs’ main objective has always been to “digitise all the world’s assets.” The sole purpose of the X-Chain on the Avalanche Primary Network is to ease the production and transfer of digital smart assets. All kinds of assets and marketplaces, whether existing or not, can be accommodated by the custom rulesets it permits. Additionally, two distinct, still very early-stage digital assets that have only been deployed exclusively on Avalanche are Ryval’s Initial Litigation Offerings (ILOs) and ReTok Finance’s tokenized real estate (founded by Roche Freedman LLP, Republic, and Ava Labs).

With high-profile metaverse/gaming initiatives quickly cluttering up blockchains over the past few months, the need for performance isolation has become abundantly evident. In particular, the story arc of Crabada shows how Avalanche’s subnet technology might make it the preferred network for on-chain gaming. Crabada is a crab-themed P2E game that launched exclusively on Avalanche’s C-Chain. Within three months, it had amassed more than 30% of daily transactions on the C-Chain. Users across the C-Chain saw higher costs and latency as a result. However, thanks to the launch at the beginning of the year, subnets were conveniently available for usage by the Crabada community and all C-Chain users. Early in May, Crabada bridged to its own Swimmer Network, an EVM-compatible subnet, causing a significant drop in transaction fees. Overall, this demonstrated the potential strength of subnets and, more specifically, was advantageous for both Crabada users and the wider Avalanche ecosystem.

The Avalanche network is only 21 months old, despite the fact that it may not appear that young. Over that period, its ecosystem experienced staggering expansion as a result of a cunning and aggressive scaling approach. The main Avalanche stakeholders succeeded in boosting activity on the stable, EVM-compatible C-Chain by allocating a sizable sum of money to projects and user incentives. The present ecosystem stakeholders must put Avalanche’s potential and unique growth techniques into practise now that it has established credibility and a strong foundation. However, the most promising category from both a user and project acquisition perspective is gaming. If Avalanche can resolve some of the scalability-related problems, such as seamless subnet bridging and quick validator bootstrapping for new networks, it might bring a sizable and altogether new class of users on-chain by itself.

Date of Activity: 27 September 2022 (Tuesday)

Topic: What is Avalanche?

Channel Name: Avalanche

Link: https://www.youtube.com/watch?v=mWBzFmzzBAg

Markets are fragmented in the global financial system as a result of regional and regulatory differences. Thus, there hasn’t been an easy way to develop and trade digital assets in a way that is compliant with the law up until now. In spite of the fact that there are assets worth over $8 trillion in the world, there is no single worldwide market for them. What if we could, instead, reframe the financial markets as a unified, global network where deploying assets would be as simple as sending an email? What if the exchange of financial products was standardised so that traders could transact in equities, commodities, alternative assets, and more on a single worldwide platform? This is where AVA, the infrastructure to make this possible comes into play by enabling any financial network to plug into one universal platform.

The issuance and trade of all digital goods take place on the AVA global financial network. AVA’s unrivalled engine enables it to support such a vast worldwide network. AVA is built with speed, which is only possible thanks to a recent development in distributed systems called Avalanche consensus. Current decentralised networks are built on over decade old consensus protocols that have issues scaling with high performance but now, users don’t have to worry about that thanks to Avalanche consensus. Millions of participants can validate using this consensus while handling thousands of transactions per second, right down to sub section finalisation times. AVA combines this with a system design that can accommodate the special requirements of specialised financial products and decentralised software. This customized ability is achieved through sub-networks; enabling anyone to launch their own, tailor-made network with custom virtual machines.

AVA creates the platforms on which tens of thousands of different sub-networks can link and form a unified, integrated global market. Any asset may be digitalized by an asset issuer on AVA. The issuer can choose whether it wants to be on a permissionless or permission network by first choosing the features, such as privacy enabled transactions. To help build the marketplace functionality, the asset may be established with customised smart contracts. Additionally, customised conditions may be created to satisfy compliance needs. The asset can then be introduced to the world market.

Overall, AVA is fast, flexible and secure with a custom plug-and-play infrastructure that is built to meet the demands of decentralised apps, asset issuers, and financial marketplaces.

Date of Activity: 28 September 2022 (Wednesday)

Topic: Avalanche: A Blockchain that Actually Scales (A @el33th4xor thread)

Link: https://twitter.com/el33th4xor/status/1529824159814909953

When people talk about blockchains, the word “scalability” is frequently used, but what does it actually mean? Well, a chain that scales will have lower fees, claims Emin Gün Sirer. People used to be upset because an Ethereum swap cost $500 and an Avalanche transfer fee increased from $0.05 to $3.50, however that is no longer the case thanks to scalability; the transfer fees for Avalanche have now decreased to $0.05. Some people might believe that low fees indicate that utilisation or chain value is declining but in truth; the same economic activities are taking place, but users will pay much less for them, just as they wanted.

The tooling and community intuition are anticipated to lag behind as we go from single monolithic chains to a scalable design with subnets or L2s. This is only a natural result of the new paradigm of horizontally scalable blockchains, and people who only focus on C-Chain activity alone will be particularly mislead while others may “FUD.” For instance, according to Glassnode, a small number of NFT applications are responsible for between 30 and 40 percent of daily Ethereum transactions but the metrics for the Ethereum mainchain will appear to decline if and when these applications relocate to L2. Similar to this, activity on the C-Chain will appear to decrease as the heavy gas consumers move to their own subnets, even though it has only moved to a different area of the system. This mechanism reduces fees for the DeFi legos and other dApps on the C-Chain exactly as it was intended to.

According to Emin, users will be misled if they solely focus on C-Chain activity. To obtain a comprehensive understanding of the network, they should instead examine network activity as a whole, including global burning, staking, and growth. Furthermore, a chain that is genuinely scalable will be so active that a single node simply cannot keep up with it. However, because they have only had to cope with slow and gradually network rates up until recently, most tools, like explorers, are developed around single centralised components. Since it is genuinely challenging to analyse data at these speeds from so many subnets at once, it is predicted that these tools will be slow when presenting aggregate statistics.

AVAX will become more and more dependent as additional subnets go live, being used for staking, gas in subnets where it serves as the native token, and liquidity pools for subnet tokens that require cross-chain transfers and other liquidity needs. As a result, consumers will notice that people utilise the Avalanche C-Chain since it is affordable, dependable, decentralised, and safe, and the increased utilisation will result in greater fees. Then, in order to reduce costs and isolate activity, dApps will switch to subnets. After that, users will notice the launch of more validators, which will lock up AVAX in staking and liquidity pools and make C-Chain once more affordable. Bear in mind that this is a continuous cycle.

Avalanche is here for the long haul, designing for when there are thousands to millions of subnets. There are many uses for these subnets as well, but not all of them are visible to the general public because private subnet deployments exist just like there are private networks on the Internet. Some of these private subnets will eventually become public, but others might not. Additionally, there might be activity occurring in the overall network that is hidden from non-participants. It is also possible that Avalanche may collaborate with some fair, trustless, and decentralised L2s which would be fantastic if they were to be combined with subnets. However, since each chain (L1s, L2s, and subnets) relies on its own unique security assumptions, it’s crucial that users are aware of them and hold systems accountable. Each system must be sufficiently decentralised, redundant, and equipped with backup plans in case of malfunction.

Overall, in the short term, users can enjoy low fees on the C-chain, where the Avalanche DeFi legos are currently located, but they should expect prices to increase when new, well-liked dApps and games are launched. They can also expect fees to decrease when these applications and games quickly shift to their own subnets.

‍