Crypto Currency

Avalanche Blockchain: Can it ReplaceEthereum?

Avalanche is a programmable blockchain developed by Ava Labs. At its core is the snowman consensus protocol, which is a type of proof-of-stake (PoS) protocol that involves validators confirming investment portfolio through random sampling of a small number of nodes. This helps speed up the process, thus making Avalanche exceptionally fast. This speed is expected to help this platform overcome Ethereum in the future. 

World’s Fastest Blockchain?

According to Ava Labs, Avalanche is currently the world’s fastest blockchain. It has a finalization time of just 2 seconds and a throughput of 4,500 TPS. In comparison, Ethereum’s throughput is just 14 TPS and it can take 6 minutes to finalize transactions. This has made Ethereum an increasingly expensive platform, with average transaction fees crossing the $20 mark. On the other hand, Avalanche will cost only a few cents per transaction.

Some of the key features of Avalanche are as follows:

  • Solidity-Compatible dApps: It allows you to launch EthereumdApps confirmingtransactions in an instant and processing thousands of transactions in a second. Its TPS is faster than any other decentralized blockchain.
  • Deploy Custom Blockchains:with Avalanche, you can launch blockchains suited to your application needs. You can create your own virtual machine and determine the way the blockchain should work.
  • Minimum Hardware Requirements:Scale to millions of validators without the need for investing in advanced hardware. 

Ethereum Smart ContractsCompatibility

Avalanche is compatible with Ethereum smart contracts. Developers can readily port their dApps between the two blockchains. This helps expand the platform’s use scenarios.

  • The two most popular DeFi platforms on Ethereum, Curveand Aave, went live on Avalanche last year. This move provided investors with cheaper and faster modes of access.
  • USD Coinwas later added to Avalanche. It is the second most popular stablecoin and is developed on Ethereum. It is expected to boost Avalanche’s DeFi ecosystem. 

The USD Coin allows investors to invest in DeFi without the need to hold volatile cryptos. If you decide to lend this stablecoin to the Aave protocolunder the current prices, you can expect to generate1.56% in APY. That equates to around 0.06% in interest paid in an average bank savings account.

Avalanche’s Utility to Boost Adoption

In its simplest form, Avalanche has many advantages working its favor. The transaction process is extremely cheap and fast, and the blockchain is compatible with Ethereum. It is this value that has helped it get widely adopted in 2021. In January this year, its daily transaction volume crossed the 1-million mark. A year ago, the figure was only in the hundreds per day. Ethereum’s average daily transaction for 2022 is estimated to stay around 1.2 million.

There are many other features working its favor:

  • There are currently 175 blockchain projects in Avalanche
  • The types of projects includeNFT marketplaces, video games, DeFi protocols
  • It is the 4th largestDeFi ecosystem and has $11 billion in investment

As the number of developers, investors, and consumers drawn to these DeFi solutions and dApps increases, the value of the AVAX coin is expected to increase significantly. It is expected that in the future Avalanche could exceed Ethereum in the areas of both popularity and price.

Can Avalanche Take Ethereum’s Place?

The crypto market has recently lost some steam. Multiple news and factors have contributed to this decline in the market value of major cryptocurrencies. Ethereum has been going through its own compounding challenge –rising transaction volumes and slowing network traffic speeds. While each transaction competes for the limited mining power, the fees have risen like anything. While an upgrade is in the process, Avalanche and other blockchains have addressed this challenge.If Ethereumdoesn’tovercome its rising transaction costs, it can expect to trade its market position with Avalanche.

The current ongoing market decline also provides investors with the opportunity to purchase the dip. The market is expected to remain bullish in the near and distant future once the currentgeopolitical and regulatory challenges are overcome. The slowdown has also allowed the market to identify blockchain networks that have been making long strides in areas such as dApps and DeFi. Avalanche is one such blockchain and it has all the potential to become big in the future. Its coin, AVAX, was priced at around $29 a year ago and it is currently priced at $80 on Bitcoin Trading Platform. It recorded its peak price of $134 in November.

Christopher Stern

Christopher Stern is a Washington-based reporter. Chris spent many years covering tech policy as a business reporter for renowned publications. He has extensive experience covering Congress, the Federal Communications Commission, and the Federal Trade Commissions. He is a graduate of Middlebury College. Email:[email protected]

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