If you've spent any amount of time in the Cardano and Catalyst communities, you've likely noticed a cross-chain positive tone in conversations regarding other cryptocurrencies. In that spirit, We dove into Avalanche over the last week , downloaded the wallet, and bought some AVAX (Avalanche's native token) to see what happens when the rubber meets the road. Back in our “cross-chain” brain now, all we can think about is how to bridge the two very different worlds!
To sum it up, "Avalanche's mission has always been to tokenize the world's assets," says John Wu, President of Ava Labs, the deep-pocketed tech organization responsible for building out the budding platform.
But what does it mean to tokenize assets? And what's inside an Avalanche wallet? In today's article, we'll lift the hood to look at Avalanche's basic functionality, share some ways people are using AVAX, and look at the upcoming possibilities for its Smart-Contract ecosystem.
Under the hood
As it turns out, Avalanche, a proof-of-stake (POS) cryptocurrency platform, is actually a trifecta of blockchains:
- The X-chain (exchange chain) transfers staking rewards and other transactions that may require the platform's fastest speeds (rivaling those of Paypal and Stripe) and has a fixed transaction fee of .001 AVAX (or $.019 at the time of this writing).
- The P-chain (platform chain) is used explicitly for staking and validating. Its fees are similarly low to the others.
- The C-chain (contract chain) allows users to interact with the dApps in the Avalanche ecosystem with the native Core wallet (more on that in a bit) and can also connect to your Metamask wallet to extend usability. The variable fees on the C-chain depend on the chain load or the number of transactions occurring at the time of use. My transactions on the C-chain this week were all below $.01.
Ava Lab's recently released its new Core wallet; this browser extension wallet is also accessible on the core.app website to extend functionality. The Core wallet's single-chain setup does make things less complicated for users who want to interact with dApps. Its ability to connect with Metamask is made possible by running on an Ethereum Virtual Machine (EVM). This focus on interoperability undoubtedly ticks the right boxes from an adoption standpoint.
After making a few transactions using Core, the smooth experience imparts the sense of using the Avalanche blockchain (if it could only be that simple). And as far as speed, our slowest transaction time between wallets has been 2 seconds, though throughput times as high as 3 seconds have been reported––indeed an appreciated upgrade for most users from other chains.
The Staking Chains
Accessing the X-chain or P-chain for staking purposes is done from this webpage designed for single-visit accessibility. From a user standpoint, especially in these early days, it does the job for these two foundational chains that don't need constant access, given their roles.
As mentioned in this article on staking with Cardano, some POS platforms have a lock-up period where you don't have access to spend your crypto while staked. Though that looks different for different ecosystems, Avalanche's lock-up period is pretty straightforward. After you move your 25 AVAX minimum ($464.75 at the time of this writing) to stake on the P-chain, it will prompt you to choose a timeframe between two weeks and one year for staking your AVAX.
During that period, it's all locked up. But after your chosen timeframe is over, your AVAX tokens, plus your staking rewards, are returned to your wallet. According to Ava Labs, AVAX holders nowadays stake 63% of tokens in the ecosystem. Each holder receives an 8.78% yield for their part in helping stabilize the network.
Uses for today & tomorrow
According to several non-official sources, AVAX holders spend most often in the platform's NFT markets and Game-fi spaces. These are typical use cases early on for many blockchains. In the case of Avalanche, they do help test the software.
What has yet to be stressed-tested entirely are the thousands of transactions per second that the network is reportedly capable of. From the math, hosting a stock exchange on its network is technically within reach––and certainly on-brand for its tokenizing-asset aspirations! “Aspirations” because it will take more adoption, building, and likely creating relationships with governments around the world before these tokens are officially recognized. But, when it does, we may see tokens of all kinds on-chain representing ownership of real-world assets––like the deed to a home or title to a car, but digitized and on a blockchain. Looking to the future, those engaged in traditional finance are thought to be its greatest bet for broadening the user base, hopefully helping Avalanche attain its central goal.
Compared to other platforms, Avalanche can feel a bit unnecessarily complex at first. Though, once you load up your Core wallet from an exchange and look around at what the Avalanche ecosystem offers, we think you'll also be impressed!
Whether you're an AVAX power-user or are downloading Core for the first time today, please use the comments section below to sound off and share what you're learning; bonus points for ideas about how our blockchains could connect!