Should You Buy Avalanche ($AVAX) In 2021?

over 2 years ago

Avalanche Network is an open-source, programmable smart contracts platform to create Decentralized Applications. It was founded in 2018 by Ava Labs, led by Emin Gun Sirer who is currently serving as a Computer Science professor at Cornell University. The main network was launched in 2020 and they got funded with over $60 million in the Initial Coin Offering (ICO) campaign.

$AVAX is the native token of Avalanche which is used for staking, payment of fees, and peer-to-peer transactions within the network. It is also used as the base unit for the blockchains created on the Avalanche Network. On January 1st, the price of 1 $AVAX was 3.091 and as of today, it's sitting at a whopping price of approx. $43. That's almost 14 times gain in just 8 months.

If you want to know more about Avalanche Network and how it works, then please check out this basic guide by @crypto-guides. In this blog, we are going to discuss whether $AVAX is a good investment or not. Let's start!

7 Facts About Avalanche

PoS Consensus: Avalanche uses Proof of Stake (PoS) consensus which is quite unique in the sense that it combines all the benefits of Nakamoto consensus and Classical consensus. It is faster, more secure, and eco-friendly as compared to Proof of Work (PoW) used by Bitcoin Network.
Decentralization: Avalanche Network can scale to millions of validators securing the network and participating in consensus for every transaction. It's great for decentralizing the network even more. This aspect is missing in many of the present blockchain networks.
Security: The network is resilient (up)to 60% malicious attacks. As the number of validators increases, the platform will become even more secure.
Performance: Avalanche network can process 4500+ transactions per second. This number is comparable to VISA which claims to handle around only 1700 transactions per second.
Fees: Avalanche uses a trichain blockchain system. All transactions that happen on C-Chain are charged a dynamic fee. The fee structure is provided on their website. Moreover, anyone can create their own blockchain by paying a subscription fee.
Tokenomics: $AVAX has a fixed capped supply of 720 million, creating a scarcity element for the token which is missing in other blockchains with high inflation in supply. 360 million tokens were minted at launch (with vesting periods between 1 and 10 years) whilst the other 360 million are used for rewards for staking released over decades. With each transaction, the fee charged by the network gets burned to put $AVAX out of the supply forever. A huge benefit for the current stakeholder. Buying pressure on the token can increase over time with adoption.
Customizability: Avalanche also allows the creation of unlimited no of. customized, interoperable blockchains. A subscription fee is charged in $AVAX which is burned as well.

Should You Buy $AVAX?

Avalanche is a relatively new blockchain network in the smart contracts space and it has grown rapidly in 2021. $AVAX's demand and usage are increasing with the growing no. of DApps catering to DeFi and NFT markets. There is a huge growth potential for the project since it provides a better user experience when you compare it with the competitors like Ethereum, Polkadot, Cosmos, Polygon, etc. It is capable to scale at one trillion transactions per second which is not offered by other blockchains. Due to its fee-burning mechanism, the current token holders get benefited because the supply can go very low over time. At the time of writing, more than 227,194 AVAX have been burned and it is increasing rapidly.

Is it a good investment? Yes, depending upon the developers if they manage to live up to the expectations listed in their roadmap. Fundamentally, Avalanche has aced all the pain points of current users and investments. Recently they expanded into DeFi with #AvalancheRush, the $180M liquidity mining incentive program in collaboration with leading DeFi like AAVE and CUVE. Before this, an Ethereum bridge to Avalanche was created for easy asset migration.

Is it a risky investment? Yes, because it is a fairly new platform and there are so many projects out there with as strong fundamentals as Avalanche has. If you are thinking to invest then maximize your earnings by Staking Avalanche and delegating it to validators for rewards.

I hope this blog helped you guys to understand why Avalanche is good or bad. Please let me know your thoughts. Do you own any #AVAX or planning to buy? Comment below!

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_{It's an initiative by @forexbrokr to drive organic traffic to the leofinance.io domain through long-form, SEO-optimized posts featuring high-volume keywords. This project aims to eventually have a leofinance.io based crypto guide for every single coin or decentralized project in existence through user-generated content. Go and check out both the Hive guide and Bitcoin guide that they already published with contributions from the community members.}