What is Avalanche (AVAX) and what is it used for?

Avalanche is a blockchain network built for decentralized apps and for custom blockchains that connect to it. AVAX is its native coin. Avalanche crypto is used to pay network fees, to stake to secure the network, and to run financial apps such as lending and trading platforms.

What is the Avalanche blockchain?

Avalanche went live on September 21, 2020. It was developed by Ava Labs, whose founder, Emin Gün Sirer, was a Cornell computer science professor at the time of launch. Its official docs describe it as a network of many blockchains rather than one. Different chains can be set up for different applications.

At the center is the Primary Network, which runs three chains:

• C-Chain, the contract chain, which runs smart contracts and is compatible with the Ethereum Virtual Machine, or EVM. Developers can write contracts for it in Solidity, a common smart contract language.
• P-Chain, the platform chain, which tracks validators, handles staking and manages the creation of new chains.
• X-Chain, the exchange chain, which is used to create and trade digital assets.

Avalanche uses its own family of consensus methods. In simple terms, each node repeatedly asks a small random group of other nodes what they think, and switches its view if most of them disagree. The process repeats until the network settles on one answer. Our guide to consensus mechanisms covers the wider idea.

What is Avalanche AVAX crypto used for?

AVAX has several jobs, according to the Avalanche docs:

• Fees. Every transaction on the network is paid for in AVAX, and those fees are burned, meaning permanently removed from supply.
• Staking. A node must stake at least 2,000 AVAX to validate the Primary Network. Validators earn newly minted AVAX as a reward when their staking period ends.
• Weight in decisions. The amount staked sets how much influence a node has in network decisions.
• Unit of account. AVAX serves as a common measure across the chains built on Avalanche.

Supply is hard-capped at 720 million AVAX.

On the app side, Avalanche hosts DeFi services. ForkLog has named lending platforms Aave and Benqi and the exchange Trader Joe among them.

What are Avalanche subnets and L1s?

Projects can launch their own blockchain on Avalanche. These chains used to be called subnets and are now called Avalanche L1s. Each one can have its own set of validators.

An upgrade called Avalanche9000 went live on December 16, 2024, and changed how these chains work. Before it, a validator for a subnet also had to validate the Primary Network and stake at least 2,000 AVAX. After it, L1s can run their own validator sets without that requirement. The Avalanche team said the change cut the cost of launching an L1 by 99.9%. The same upgrade lowered the minimum base fee on the C-Chain from 25 nAVAX to 1 nAVAX.

According to The Block, the change lets a chain operate more independently from the Primary Network, which can help a project meet the rules of a particular regulator or jurisdiction.

Crypto prices are volatile and a token can lose most of its value.