- Avalanche (AVAX) blockchain doesn’t have to rely on L2 networks to scale up.
- Ethereum has a DApp leg up on Avalanche. But it’s not technically superior to the blockchain developed by Ava Labs.
- AVAX bridge to Ethereum may be the key feature that brings it more growth.
- Avalanche Network has many exciting NFT projects in the works, including Avaxtars and DeFi Dinos..
Avalanche (AVAX) is an emerging star in the competition to displace Ethereum. AVAX has accrued over $3.1bn TVL across its ecosystem of DApps. While still under 1/10th of Ethereum’s TVL, AVAX has managed to draw growth rapidly, achieving this growth only two years into its existence.
In this Avalanche (AVAX) overview, we try to pin down the network’s positioning in the future of web3 and NFTs.
Who Funded and Developed Avalanche (AVAX)?
Avalanche network is still in early stages of adoption. However, last December, it held $14.77 billion TVL, which is 36% of Ethereum’s current $40 billion TVL. Image credit: DeFiLlama.
Avalanche (AVAX) is a relative newcomer to the smart contract scene in 2020, having been developed by Ava Labs, which is headed by computer scientist Emin Gün Sirer. Like other blockchain projects, AVAX received its initial funding from the prolific venture capital (VC) firm Andreessen Horowitz, in addition to usual funders such as Polychain Capital, MetaStable Capital, Initialized Capital, and other VC firms.
What Problem Is Avalanche (AVAX) Trying To Solve?
As an alternative to Ethereum, Avalanche aims to solve problems such as high network fees and centralization. Scalability is at the heart of Avalanche’s design. The network is capable of processing more than 4500 transactions per second. As compared to Ethereum or other similar blockchains, Avalanche has significantly lower fees.
How Does Avalanche (AVAX) Tackle the Network Scalability Problem?
Avalanche launched as a proof-of-stake blockchain network, something Ethereum is yet to transition into. This means that AVAX already outperforms Ethereum drastically. While AVAX can run 4,500 transactions per second (tps), Ethereum can do merely 7–14 tps. Comparatively, this puts AVAX in the effectiveness range of near-instant payment systems like Visa.
While also being proof-of-stake, like almost all smart contract platforms, AVAX has its own take on it. Specifically, it revolves around the division of labor. Avalanche network accomplishes this by using two protocols simultaneously, each one prioritizing different tasks.
- Classical consensus – prioritizes quick finality (guarantee that transactions are not falsified), transaction speed, and energy cost-effectiveness
- Nakamoto consensus – prioritizes scalability, decentralization, and security
Avalanche handles this division of labor, that prioritizes different kinds of traffic, thanks to three interoperable chains.
- X-Chain – eXchange, for creating assets as instances of the Avalanche Virtual Machine (AVM)
- C-Chain – Xontract, serves as Ethereum Virtual Machine (EVM) that creates and executes Ethereum-compatible smart contracts.
- P-Chain – Platform, coordinates validators and Subnets and allows the creation of new Subnets with custom rules. This means that a Subnet can be made either public or private, a flexibility that will come handy for both enterprises and institutions. Each Subnet consists of validator groups that arrive at a consensus to secure the entire blockchain network.
As you can see, Avalanche took a completely different approach than Ethereum. Instead of relying on layer 2 networks, it divides its network into Subnets. This makes traffic handling easier and more scalable while still not sacrificing key blockchain aspects — decentralization and security.
For this reason, Avalanche is best understood as a network of networks, but all under the same primary roof. Furthermore, it has a bridge that connects Ethereum assets to the Avalanche ecosystem. This Avalanche Bridge (AB) can connect directly to a MetaMask wallet, so your assets, be their cryptos or NFTs, can be transferred to and from Avalanche at negligible cost.
This brings us to the most important point. It’s all well and good to have a sound foundation, but its value depends on what is built upon it. The question then is, what kind of DApps and NFT experiences can be found in the Avalanche ecosystem?
Avalanche Ecosystem Explained
For every DApp on Ethereum, you can find a counter DApp on Avalanche. For example, Ethereum has Uniswap (UNI) for decentralized token swapping and lending. Avalanche has Pangolin (PNG) to fulfill that role, currently holding $37.24 million TVL. While this is a steep drop from its all-time-high of $483 million TVL from November, it does showcase both interest and proof of concept.
Moreover, thanks to its Ethereum compatibility, major Ethereum DApps have been directly imported into the Avalanche ecosystem. Case in point, you can find Aave, one of Ethereum’s leading interest yields and lending services. Across seven blockchain networks, Aave holds nearly $10 billion in staked and borrowed assets.
Out of that, Aave’s Avalanche market holds $2.5 billion, indicating that Avalanche has a well-developed Decentralized Finance (DeFi) ecosystem with the extra benefit of paying negligible gas fees.
This is comparable to Polygon’s fees, as Ethereum’s layer 2 scalability sidechain. For this reason, trading and minting NFTs on Avalanche is equally cheap. However, what kind of NFTs are on offer?
The NFT Market in Avalanche
Avalanche is constantly evolving, but there are presently 29 DApps that revolve around NFTs. They can generally be divided into play-to-earn games, NFT collections, NFT staking, and NFT marketplaces.
By connecting your MetaMask wallet, and adding Avalanche Network, you can access this P2E game that has its own NFT marketplace. It is an idle browser game, featuring a sci-fi adventure.
Avaxtars connects to IPFS (interplanetary file system) to store all the profile pic NFTs. The game also has its own $AVXT utility token, limited to one billion, to be distributed across roadmap milestones.
Another NFT collection that is yet to become a browser game is Crypto Seals, featuring both static and animated fantasy creatures similar in aesthetic to CryptoBatz by Ozzy Osbourne.
This fantasy 3D MMORPG play-to-earn game is far more ambitious than Avaxtars. In fact, one could say it has better graphics, spell effects, and animations than World of Warcraft.
In addition to traditional RPG questing, DOMI offers archetype classes and homesteading. However, NFT implementation and its DOMI token staking are yet to be released in Q3 2022.
Another ambitious P2E game developed by veteran industry insiders, is an MMORTS space metaverse strategy. In fact, it may be the first AAA GameFi project to realize its promise. The trailer is certainly top-notch. As you may have guessed, what would a space game be without NFT spaceships.
Imperium Empires already has its own NFT marketplace, aiming to become the next Axie Infinity, but with 3D spaceships replacing blobby creatures in tactical battles.
Anime inspired and first deployed on BNB Chain; this is a hero-collecting RPG with over 200 characters and four different NFT categories.
They can then be trained and skilled up to become even better combatants in 3D battles, which look quite impressive.
NFTs consist of heroes themselves, their equipment, material for upgrades, and houses. With eight game modes for both PvE and PvP experiences, this one is certainly worthy of a bookmark.
Following in the footsteps of Mones is Heroes Chained (HC) as a notable mention. Although it has lackluster animations at this stage of development, this real-time fantasy action RPG game is also one to look for, for its P2E potential.
Avalanche’s Top NFT Marketplaces
While all of these P2E games have their own marketplaces, three general NFT marketplaces have risen to potentially counter Ethereum’s OpenSea and Rarible:
- NFTrade – Not only does it support Ethereum and other blockchains, but it also aggregates NFTs from multiple NFT marketplaces. As cherry on top, it charges zero transaction fees.
- NFTStars – A sleeker and more exclusive NFT trading experience, NFT Stars also supports Ethereum but only those hand-picked NFT collections.
- Lootex – For those seeking GameFi NFTs, Lootex gathers over 500 games across blockchain networks. It also has an NFT vault and launchpad for new projects.
There are plenty of other NFT marketplaces to visit. One of them is Kalao, with its sleek and responsive design while also having cutting-edge features such as NFT staking. Likewise, Avaware already holds $127 million in NFT staking and crypto yield farming.
Avalanche’s Top NFT Collections
Outside of GameFi, Avalanche-based NFTs have largely followed the same trends — pixelated art and apes. It is then not surprising to find these collections gaining traction.
Consisting of 2,500 Dappers, these are yield-generating cartoon dogs covering different dog breeds across seven rarity categories: common, uncommon, rare, epic, legendary, mythic, and spectral.
Interestingly, there is an easy way to get a CryptoDapper, by going to the companion vending machine that releases a Dapper every eight hours.
DeFiDinos is another Axie-like derivative, but with anthropomorphized Dinos. The P2E has its own DXP tokens, which players earn in PvP battles. Of course, they are also used to evolve one of 4,999 Dinos to perform better in combat.
Recently, DeFi Dinos partnered with Time Shuffle and Dark Gods games, which indicates Dinos’ growing popularity.
Presently, DeFi Dinos only supports PvP arena battles, with PvE coming down the pipeline this or next year.
AvaxApes represent Avalanche community avatars, recognizable for their minimalist aesthetic. Their rarity ranking ranges between 3 and 13, based on the combo of attributes, ranging from background color to headwear.
AvaxApes price floor is holding at 5 AVAX, which is nearly $100. In addition to serving as Avax representatives on social media, Avalanche Academy offers a novel minting system. Every AvaxApes holder can earn the network’s native AVAX tokens.
This is done by having 10% of every minting fee redeemed. Moreover, original AvaxApes minters earn 1% royalties every time an NFT is resold, with 3% of each sale proceeds distributed across all AvaxApes holders.
You have heard of play-to-earn and move-to-earn, but what about race-to-earn? DCRC-RaceX uses RaceCar NFTs to play simulations of the same cars. Still in development, RaceCar NFTs will be upgradeable in a variety of ways auto-fans expect: decals, wheels, tires, and body kits.
Similar to how shoes from STEPN M2E are upgradeable for better performance, so will NFT holders be able to buy performance upgrades for virtual racing. The game’s RaceX tokens, used for minting and upgrades, are already available for purchase on a decentralized exchange
This pioneering R2E pre-sale is closed, but a public sale will launch on December 19th.
Is It Worth Getting Into Avalanche?
Avalanche (AVAX) is currently ranked 16th by market cap, at $5.49 billion, just ahead of Polygon (MATIC) at $4.29 billion. This means that Ethereum’s single L2 scalability solution has nearly the same value. However, even if Ethereum 2.0 transition completes smoothly, it will be a while before it implements sharding to truly bring down gas fees.
In many ways, AVAX is already ahead of Ethereum technologically, but not in terms of DApp/developer count. Yet, thanks to AVAX’s bridge to Ethereum and Solidity compatibility, it is a certainty that the Avalanche ecosystem is poised for growth.
And the more it grows, the more AVAX appreciates, while the network’s gas fees remain consistently low. This benefits both NFT traders and investors in Avalanche infrastructure itself. Given the fact that AVAX is now 86% down from its ATH price of $146, it seems reasonable to invest now while the fear is high and fundamentals are strong.
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