Avalanche’s Growing DeFi Landscape

August 31, 2021 | 

Avalanche’s Growing DeFi Landscape

Avalanche is vying for the top spot in terms of speed and security for blockchain smart contracts. The Avalanche Foundation recently announced $180 million worth of investments to incentivize development on Avalance, sparking a sharp rise in the price of its native asset, AVAX.

What is Avalanche?

Avalanche is a delegated proof-of-stake blockchain that aims to be known as the world’s fastest platform for smart contracts. Since launching back in September of 2020, the Avalanche ecosystem has incorporated more than 220 crypto projects that include popular names such as Circle, Chainlink ($LINK), Tether ($USDT), and more.

Ava Labs, the development wing of Avalanche’s organization, led the September mainnet launch. Ava Labs was founded by Emin Gün Sirer, an experienced developer that has worked on Bitcoin and other decentralized networks. Sirer owes many of Avalanche’s current improvements to his past work on Bitcoin, noting where it needed to be improved and testing solutions that can enable a transaction throughput that can rival payment giants like Visa.

The Avalanche protocol is trailblazing a path to a decentralized web where the majority of blockchains can seamlessly connect to each other. Through the deployment of a heterogeneous interoperable network, Avalanche enables developers to pick and choose the best use cases from each blockchain so that they can be combined in one decentralized application. This is a huge step forward for the entire decentralized finance industry. The days of relying on one-size-fits-all solutions are nearing an end thanks to projects like Avalanche and Polkadot.

In February 2021, the Avalanche team launched the first iteration of a bridge application that connected directly to the Ethereum blockchain to give Defi participants an easy method to port over their assets. Unfortunately, the first version of the Avalanche bridge contained performance issues that led to higher-than-expected fees and a subpar user experience.

The team came back recently with a revamped bridge application that has received praise from noted cryptocurrency investors such as Hsaka and Three Arrows Capital’s Zhu Su. AVAX, the native asset for Avalanche rose by more than 75% over the past week. This came following an announcement by the Avalanche Foundation that $180 million worth of AVAX will be reinvested back into the ecosystem with the goal of incentivizing activity on the network and for developers to build their applications for Avalanche.

To date, the network has garnered more than 1,000 validators and 15,000 delegates with more than 200 million AVAX being staked on the Avalance blockchain.

AVAX Tokenomics

The AVAX token is the native asset on the Avalanche network. The token is primarily used to pay transaction fees on the network. Additionally, the AVAX token is used to create an incentive to build out the Avalanche ecosystem and can be earned through passive income by staking it on the network.

The AVAX token currently has a market capitalization of $8.35 billion. There are 173,933,741 AVAX tokens in the circulating supply. The maximum future supply is set at 720,000,000 AVAX. Global daily volume typically falls in a range between $200 to $600 million. The all-time low price for AVAX was made at $2.79 on December 31, 2018. The all-time high for AVAX was hit at $59.94 on Feb 10th, 2021.

Are You Bridging?

Avalanche’s Growing DeFi Landscape

On July 29th, the Avalanche team launched their upgraded bridge to the Ethereum network. The release made for excellent marketing as top crypto influencers took to Twitter where they created a cultural moment by asking their followers, “are you bridging”. The combination of influencer and organic marketing led to a flurry of crypto enthusiasts testing the bridge out for themselves. The response brings us to the conclusion that all of the primary issues with the original bridge have been patched and it is now working as expected.

The Avalanche Bridge (AB) represents a core product of decentralized finance where anyone can start swapping assets, providing liquidity, and more just by connecting their MetaMask wallet. Applications like the Avalanche Bridge are vital to the vision of Web 3.0, or the decentralized web, by providing permissionless access to financial services to anyone with an internet connection.

The swap feature on the Avalanche Bridge works similarly to Uniswap. First, you connect your cryptocurrency wallet. For now, the wallet options are limited to MetaMask and Coinbase wallet. The list of compatible wallets is expected to grow in the near term. Once you’ve securely connected your wallet, you can begin swapping out any assets held in your wallet for the AVAX token which can then be used as a “gas” equivalent when building or transacting on the Avalcnhe blockchain.

The AVAX that you acquire on the Avalanche Bridge can earn you passive income by using the wallet application that is included in the bridge. To do so, create your AVAX wallet by clicking on the wallet tab inside of the bridge. Next, on the earn tab, click on select delegation and enter the amount of AVAX that you would like to stake. Currently, delegates and validators can make up to 11% APY while staking AVAX on Avalanche.

Wrapping Up

Beaxy Exchange advocates for the work of DeFi projects leading the way towards a truly decentralized financial system. By removing the obstacles that prevent more than 1 billion people around the world from having a bank account, networks like Avalanche are enabling the entire cryptocurrency ecosystem to live up to its core values.

While you were away, new posts appeared on our blog.