Blog Cryptocurrency 

Reason for Growth of Avalanche

nxtgenvirtue

Snapshot

  • Introducing Avalanche
  • Avalanche Rush
  • Ethereum Bridge Facilitating Asset Migration
  • Avalanche’s Tokenomics Is improved by Transaction Burning 
  • Final remarks

Recently Avalanche (AVAX) announced completion of $230 million private sale of its currency. It has been gaining huge media attention with its bullish run and is on a rise. 

Introducing Avalanche

It was founded in 2018 by Emin Gun Sirer, a Cornell University professor and Computer Scientist. In September 2020, after its main net went live it was able to raise $60 million. The name is derived from a novel cryptocurrency consensus protocol called Avalanche. In comparison to other tokens AVAX is very different because of the massive speed and its unique protocol. It processes about 4500 transactions per second.

One of the most beneficial capabilities of AVAX is that multiple different VMs can run simultaneously on AVAX.

Avalanche Rush

In order to introduce more applications to the fast growing Avalanche ecosystem, Avalanche announced a liquidity mining program with Aave and Curve for $180 million. In the phase 1 of this program Aave and Curve users could use AVAX as a liquidity mining incentive. For this program a total of $27 million was allocated. 

The primary purpose for designing this program was to show the AVAX foundation commitment in creating an accessible, cost-effective and more decentralized ecosystem. 

Ethereum Bridge Facilitating Asset Migration

On 29th July, 2021, Avalanche Bridge (AB) was released, resulting in an increase in prices of AVAX tokens. According to the Avalanche team, it is a cross-chain bridging technology that enables transfer of assets between the networks of Ethereum and Avalanche. 

Three weeks after the announcement, $100 million in assets were transferred by Avalanche between the two networks. The Bridge is the newer and more efficient version of the previous version of Avalanche. The price of a transaction in the newer version is 5X cheaper as compared to previous version and provides a better user interface. 

Avalanche’s Tokenomics Is Improved by Transaction Burning 

Avalanche tokens that are part of the transaction fee get burned with time. This is accomplished through a special Tokenomics design that includes a protocol for burning of transaction fees. Burning of tokens decreases the supply value and increases the value of tokens in circulation. 

By mid of 2021, approximately 163,000 tokens were burnt as part of the transaction fee. 

Final remarks

The increased interest in DeFi and NFT systems, has led to an increase in the token value of AVAX by 247% in April. AVAX offers its users with high visibility, low processing fees and lightening processing speed. In the future it wouldn’t be surprising to see if AVAX witnesses big gains in the crypto market.    

Disclaimer: The article should not be considered as any financial advice. It is advisable to conduct thorough research before investment.

Photo by – nxtgenvirtue