You have likely heard about Avalanche – it’s one of the hottest blockchain projects in cryptocurrency because of an astronomical price rise from around $3 on January 1, 2021 to an all-time high of $134 on November 23rd, 2021.
Now, Avalanche is more than your average pump and dump meme coin. It’s an actual layer 1 protocol that has attracted a lot of attention from DeFi users escaping the astronomical fees on Ethereum. With that in mind, this article will explain what makes Avalanche different from every other altcoin in cryptocurrency.
Not a Memecoin
The biggest difference between Avalanche (AVAX) and other altcoins is that AVAX is not a memecoin.
We know that not all altcoins are meme coins, but altcoins that have risen 4000% in value in less than a year are usually meme coins.
We are happy to report that Avalanche is most certainly not a memecoin. In fact, it’s the native currency of the Avalanche blockchain, which is a layer 1 blockchain.
The fact that Avalanche is layer 1 makes things so much more interesting, which we will cover in the next section.
The Blockchain Trilemma
The blockchain trilemma is a phrase coined by Ethereum co-founder Vitalik Buterin. It references the challenges that blockchains face when scaling. The general gist of it goes something like the following:
“Scalability (ie. speed), security, and decentralization – pick two because you can’t have all three.”
Basically, you can have a low latency blockchain with high security and a lot of centralization (ie. Binance Smart Chain). You can also have a very slow, very secure, decentralized blockchain (ie. Ethereum). Finally, a fast and decentralized blockchain can exist, but it will have security issues (ie. Litecoin).
You cannot have a fast blockchain with high security that is also decentralized.
Avalanche might have solved this problem. Of course, every blockchain project comes along saying they have solved the blockchain trilemma, which is easy to do when the project has next to no users.
The thing with Avalanche is it has a lot of users and transaction speeds and gas fees still remain low. Avalanche obviously does not have nearly as many users as Ethereum, but it has a respectable amount with over 700,000 transactions per day.
The main reason people actually use Avalanche is because the low transaction costs make using DeFi protocols much more profitable for end users. You will pay around $1 at the absolute most for a smart contract interaction on Avalanche.
Avalanche clearly knows that users use smart contract blockchains for DeFi protocols, which is why the team behind Avalanche (Ava Labs) launched something called the Blizzard fund. This is a $220 million fund that will invest in DeFi protocols on the blockchain.
It’s basically a way to lure talented DeFi developers and entrepreneurs to the blockchain.
Personally, we are not huge fans of investment firms getting involved in DeFi or cryptocurrency. They have a tendency to get pre-pre-sale prices of these tokens and then dump after the launch for a 100x gain.
However, our hope is that the money flowing onto the blockchain will circulate around other DeFi protocols rather than being immediately pulled off the blockchain.
Emin Gün Sirer
Emin Gün Sirer is a co-founder of Avalanche. He is currently an associate professor at Cornell University, which is where he founded Avalanche with some of his PhD. students. They developed a working prototype and created a company (Ava Labs) to oversee development of the blockchain.
Sirer serves as the CEO of Ava Labs.
Anyway, Sirer is quite prolific on Twitter under the highly relevant @el33th4xor Twitter handle. He also makes regular appearances on podcasts, hosts a weekly show discussing issues with Avalanche, and just does a lot to promote Avalanche.
We’re not sure where he finds the time to juggle all those tasks, but we’re certain that Avalanche would not have nearly as much relevancy if it weren’t for all the hard work he puts into promoting it.
Active Crypto Twitter Community
Avalanche has one of the most active communities on crypto Twitter. For those that don’t know, “crypto Twitter” refers to a segment of Twitter that discusses cryptocurrency.
It basically goes Ethereum, Bitcoin, and then Avalanche in terms of engagement on crypto Twitter. In fact, you will rarely ever see anyone discussing Cardano, Dogecoin, or other top 10 cryptocurrencies (minus Ethereum) the way people discuss Avalanche.
It’s to the point that if all the information you had was crypto Twitter, then you would probably not know about the existence of Cardano.
Community building like that likely played a part in the massive price increase. Of course, it helps that the CEO of Ava Labs (Emin Gun Sirer) regularly sends out tweets and even replies to comments on his tweets.
Now, you might not think having heavy engagement on Twitter is all that important for a cryptocurrency, and that is true to some extent.
However, many people go to Twitter to discover alpha about new coins, yield farms, and blockchains. With that in mind, having a heavy presence on the social media platform cannot hurt a project.
It’s also important to note that YouTube content creators publish plenty of videos about Avalanche because, well, they find their alpha on Twitter and turn it into a YouTube video.
Is Avalanche a Good Investment?
This isn’t financial advice; do your own research before making an investment. With that out of the way, we find Avalanche an extremely good investment and one of the more undervalued cryptocurrencies available.
The current price is hovering around $85, which is a fair bit lower than the all-time high of $130 hit last month. But we believe that Avalanche has the potential to exceed some of the other “Ethereum killers” in value because Avalanche has a focus on developing DeFi protocols on its blockchain.
It’s also compatible with the Ethereum Virtual Machine, which makes bridging to and from Ethereum and other EVM compatible blockchains extremely simple.
The only thing Avalanche does not do well, in our opinion, is catering to the NFT marketplace. Solana and Ethereum both do much better at attracting NFT artists to the blockchain. This makes sense for Avalanche, however, because the purpose of the blockchain was to disrupt Wall Street.
In fact, Emin Gun Sirer has openly stated multiple times that he wants to turn Avalanche into a decentralized Wall Street. It’s obviously a big goal, but it does explain the focus on DeFi rather than NFTs.
That covers it for what makes Avalanche different from other altcoins. Basically, Avalanche is not a junkcoin – it actually has use as a native coin on a very promising blockchain. The combination of a dedicated CEO, a focus on disrupting DeFi, and a rabid community of supporters make Avalanche one of the more interesting cryptocurrency projects out there.