Why Avalanche?
Avalanche is one the fastest-growing networks in crypto. AVAX is the cryptocurrency that powers Avalanche. It is more efficient and scalable than Ethereum. Avalanche, a type network, is also known as an “Ethereum Killer”. Ethereum has the second-largest market cap in crypto with over $300 billion.
Ethereum is a layer one blockchain. This means that other projects can be built upon it. The Ethereum network has been used to build games, DeFi Swaps, and other blockchains. Ethereum was founded in 2015 and has been around for seven years. This has allowed it to have a significant advantage over other programmable networks. Ethereum’s main problem right now is its lack of scalability. The transaction times are slow, and the fees are expensive. Because there is only a small amount of mining power within the network, the fees are high. Gas fees are charged because transactions are competing for mining power. Gas fees are higher for transactions that involve more people.
Ethereum developers are naturally working to fix the slow transaction times, high gas fees and slow transaction times, but that is not possible with a network Ethereum this large. Networks like Avalanche are able to take advantage of this situation. Ava Labs launched the Avalanche network in September 2020. Ava Labs gave developers the opportunity to examine what Ethereum was doing right and what it was doing wrong. The network was built to scale, which solves many of the issues that Ethereum’s network faced. Avalanche transactions take less than a second and can handle more than 4000 transactions per second (transactions per seconds). Ethereum, however, can handle 14 TPS.
It’s not to discredit Ethereum
Ethereum is leading in TVL (total valued locked) and the number of protocols on the network. It’s not going anywhere soon. The main argument for Ethereum’s continued use is that it has so many projects built upon it, so why switch networks. This is not a good reason. I have seen transactions that cost more than the gas they were worth. This is your only option. It’s not, however.
High gas fees are not an issue with networks like Avalanche. I would rather pay just a few cents per transaction than $30. I am sure anyone would agree with that. Avalanche runs on a proof-of-stake consensus protocol unlike Ethereum, which is proofof work. AVAX holders can stake their tokens in order to receive monetary rewards. They also have the added benefit that they make the network more secure.
Total value locked
DeFi Loma allows you to view all types of blockchain data. The total value of all blockchain chains is what I will be focusing on. A little more than 5% is held by the Avalanche network (the greyish-purple section that is highlighted in the circle). This is a good result for a network that has been in existence for only two years.
It’s interesting to see how the TVL has changed in the past month. Polkadot is down 88%, Ethereum 3%, and Solana 9%. Avalanche, on the other hand is up more than 21%. 21% is not a small amount when you consider the billions of dollars involved. It seems poised for growth with over 170 protocols currently running on Avalanche’s network. The advantages of one the fastest networks are becoming apparent to investors. The network will continue to grow in the same way as it did the previous month and could eventually surpass Ethereum.