Avalanche (AVAX) is a relatively new cryptocurrency and blockchain project in the market. This smart contracts network was launched back in 2020 and it was able to reach the top 10 in just a year. Nowadays, this is one of the most promising blockchain networks for the coming years in the cryptocurrency market.
The project is now handled by Ava Labs and it wants to create a new, scalable and reliable blockchain network. Compared to other scaling solutions and blockchain networks, Avalanche does not want to sacrifice decentralization and wants to offer the best security to participants. In this guide, we are going to share with you all the details about Avalanche and why it became one of the largest cryptocurrencies in the world.
What is Avalanche (AVAX)?
Avalanche is a cryptocurrency project that offers a smart contracts blockchain network. The main difference with other projects is that Avalanche makes sure that participants have low transaction costs and fast speeds when sending and receiving or when they interact with different smart contracts.
At the time of writing, Avalanche has a total value locked on its protocol that is close to $12 billion according to data shared by Defillama.com. This shows that Avalanche became one of the largest blockchain networks in the market.
Avalanche’s main goal was to achieve the fastest time to finality in the blockchain industry. That means that they wanted to offer the fastest irreversible transactions in the world. That means that as soon as the transaction gets settled, it can’t be reverted. This does not only offer security but they also wanted to make sure that the process was fast, decentralized and eco-friendly.
This blockchain network is composed of three different networks. The exchange (X) chain, the Platform (P) chain and the Contract (C) chain. Each of these chains has a different function and would help the entire Avalanche protocol become the efficient network that it became nowadays.
The exchange chain is the one that works in order to process the transactions of the Avalanche blockchain. This blockchain is powered by AVAX, the digital currency of this project. However, there are other coins that have already been released on top of Avalanche and use the Exchange chain. Users that interact with this blockchain have to pay fees using AVAX tokens.
The Contract chain is the one that lets developers and participants execute smart contracts. This is one of the key parts of the AVAX protocol as it lets developers create decentralized applications, financial solutions and use the benefits offered by AVAX in any single way.
One of the positive aspects of Avalanche is that it is compatible with the Ethereum Virtual Machine. Those developers that worked with Ethereum are now able to deploy their smart contracts on Avalanche.
Finally, we have the Platform chain that lets participants create layer 1 and layer 2 blockchain networks. In this way, it is possible to rely on different subnets and make the whole blockchain network much more efficient. These subnets are also a key part of the Avalanche protocol as they help the whole network scale by processing fast and cheap transactions.
There are many other things to take into consideration about Avalanche, but these are the most important ones that would let you understand how the network works and why it became one of the largest in the market.
The AVAX token or the AVAX cryptocurrency power the entire Avalanche ecosystem. This is similar to how Binance Coin (BNB) works on the Binance Smart Chain or Ether (ETH) on the Ethereum blockchain.
This token can be used for many different things, including paying for network fees, earning staking rewards and also creating different subnets. According to data shared by CoinGecko, AVAX has a total supply of 377,752,194 AVAX and a maximum supply of 720,000,000 AVAX. At the time of writing this article, the circulating supply of AVAX was 243,189,926 tokens.
One of the ways for investors to engage with the Avalanche protocol is by staking their coins. This would let validators protect the network and get rewarded with AVAX. It is possible for users to also delegate their stake to other validators and earn a percentage of their earnings. Close to 60% of AVAX holders are staking their coins right now.
The token is very important for users that want to interact with the Avalanche protocol. Why? Because without it, users would not be able to pay for fees and for their interactions on the Avalanche blockchain ecosystem. AVAX is also going to be very important for subnets.
There have been different reasons for investors to purchase AVAX. One of them was due to the need to engage with the whole protocol. Without AVAX, this would be impossible. Another reason for participants to purchase AVAX was to receive staking rewards.
Nowadays, there are several virtual currencies that let users stake their coins and earn rewards. Compared to the low returns offered by Ethereum 2.0 (beta), users might prefer to move to AVAX and get a 10% APY. Additionally, those developers that have created different subnets or that are working with dApps on the Avalanche network have to buy AVAX on a regular basis in order to be able to engage with the protocol.
Due to these reasons, it was possible for AVAX to become one of the largest virtual currencies in the market. In the next section, we will get into the market details of the AVAX digital asset. This would help you understand its evolution in the crypto space throughout 2020 and 2021.
Let’s now focus on AVAX price and how this has evolved over the last few years. AVAX started to be traded in the cryptocurrency market in 2020. During the last months of 2020, AVAX was traded between $3 and $4.50 per coin. This lasted for several months until January 2021 when this virtual currency started to move higher.
In February 2021, when Bitcoin was skyrocketing and reaching new all-time highs, Avalanche (AVAX) hit an all-time high of $55 per coin. This was the highest price ever reached by this digital currency until September. Indeed, between February and September, AVAX was in an accumulation period or relatively-short bear market. The coin reached a low of $10 in mid-July, 2021.
In August, things changed once again. The virtual currency started to move higher and reached its previous all-time high of $55. After a small correction, AVAX reached a price of $75 in September 2021. This was the beginning of the last move higher. In November, the coin surpassed $100 for the first time and hit an all-time high of $130 per coin.
Now, AVAX is being traded close to $113. However, it might be possible for AVAX to start moving according to Bitcoin’s (BTC) moves. This happens because Bitcoin is the natural leader of the market. When it falls, altcoins fall and when it moves higher, altcoins follow. Nonetheless, there is no clear information about what Bitcoin could do in the near future.
We have seen that several altcoins have already retraced by over 80% from their ATHs, which is not a positive sign for the bull market. If AVAX wants to continue growing in the next few months, the market will have to turn bullish. That being said, AVAX has experienced a very positive year and it has also expanded when compared to BTC. Indeed, AVAX is currently at an ATH against Bitcoin. Instead, it is very close to an ATH against Ethereum as well.
It is now just a matter of time before we see the evolution of this virtual currency in the crypto market. It would be very important for AVAX to find its way without depending too much on Bitcoin and the general crypto market.
Where to buy AVAX?
There are different cryptocurrency exchanges that will let you buy AVAX in just minutes. These exchanges include some of the most popular ones and also some of the least known. It is highly recommended to always purchase digital currencies using the most popular crypto platforms as they would be safer and could offer you better services than local exchanges.
Binance, Coinbase, Bitfinex, OKex, HitBTC, Huobi Global, Crypto.com, FTX, and Coinex are just some of the cryptocurrency exchanges that are currently letting you buy AVAX.
Binance, Okex and Coinbase have the largest trading volume for this cryptocurrency. Binance has 10 different trading pairs for AVAX, including AVAX/USDT, AVAX/BUSD, AVAX/BTC, AVAX/TRY, AVAX/BNB, AVAX/EUR, AVAX/ETH, AVAX/AUD, AVAX/BRL and AVAX/BIDR. They all represent over 35% of the total trading volume around the world of this digital currency, which is very positive for Binance and for traders that want to handle large amounts of money.
Coinbase, instead, has four different trading pairs: AVAX/USD, AVAX/EUR, AVAX/USDT and AVAX/BTC. As we can see, there is a clear difference between Binance and Coinbase in terms of trading pairs offered to investors. At the moment of writing this article, these trading pairs represent 11.20% of the total trading volume of AVAX.
OKEX is also handling a large trading volume for AVAX. They have three different trading pairs available: AVAX/USDT, AVAX/BTC and AVAX/ETH with a total trading volume of 14.18%. This exchange, however, does not have fiat pairs, which are usually very useful for investors that want to move their fiat currencies to a crypto exchange.
How to Buy AVAX?
Let’s now focus on the different steps that investors have to follow if they want to buy AVAX using crypto exchanges.
Step 1 – Create a Crypto Exchange Account
As you might already know, you have to search for the ideal exchange for you to buy AVAX. But which exchange should you use? You should search for an exchange that would let you deposit fiat currencies or buy digital assets with fiat payment methods such as debit or credit cards, and bank transfers.
This would be the easiest way for you to engage with the platform and get access to AVAX. Now, if you want to buy other digital currencies, the larger the number of tokens supported, the better it would be for you. Some exchanges would also let you stake AVAX and earn rewards. This is why it could be very important for investors to search exchanges with different services for AVAX holders.
Step 2 – Add Funds to your Account
Now that you have created a cryptocurrency exchange account you will have to deposit funds. Without these funds, you will not be able to buy AVAX. The best exchanges would let you buy AVAX with fiat currencies such as the U.S. Dollar or Euro, among others. If you are in another country, your local currency might also be available to purchase AVAX.
Adding funds to your account could be very easy depending on the type of exchange that you use. Some of these platforms would let you deposit funds with a bank transfer or use a debit or a credit card. Some other third-party payment methods might be available for you to deposit funds and buy AVAX.
Step 3 – Purchase AVAX
Finally, the thing that we all want to do: buy AVAX. If you have already deposited the funds at the cryptocurrency exchange, you just need to go to the exchange section and select the trading pair that you want to use. For example, if you deposited EUR, you have to select the AVAX/EUR trading pair.
You can select whether to buy AVAX at the best available price (market order) or using a limit order, through which you will be able to select the price at which you want to buy AVAX. However, the limit order might not get executed if you place a very low offer.
Final Words About Avalanche
Avalanche is a cryptocurrency project that became one of the largest in the market thanks to its innovative blockchain architecture and proposal. The AVAX crypto is also among the top 10 due to the large demand that there has been over the last months.
It is worth mentioning that Avalanche is a young project that has a bright future ahead. It would be necessary for Avalanche to attract a larger number of developers that will deploy different and unique dApps to compete with other blockchain networks such as Ethereum, Binance Chain or even Solana (SOL).