What is Avalanche Network (AVAX)? Is it the Most Energy-Efficient Crypto Network

Avalanche is an advanced blockchain network dedicated to maintaining the highest levels of decentralization and security while providing a highly scalable platform. Avalanche has developed its own Decentralized Finance Ecosystem to compete with Ethereum. The network is best known for its fast transaction speed, low gas fee, and eco-friendliness.

What is Avalanche Network (AVAX)?

The rising demand for decentralized finance and NFTs have significantly changed the blockchain landscape due to which the old blockchains are failing to keep their users satisfied. Low transaction speed and poor scalability are some of the common issues of older blockchains.

Avalanche uses an innovative consensus mechanism to provide high throughput capabilities with significantly low latency. Avalanche performs at the internet-scale because it consists of three different blockchains. Thus, it has the potential to become more popular in the crypto space.

Avalanche Vs. Ethereum

Ethereum is the leading network in the smart contract industry. But many new networks like Avalanche, Solana, and Cardano are introducing innovative ways to compete with Ethereum.

Like Ethereum, Avalanche enables users to create decentralized applications and custom blockchains on its network. However, it has an edge over Ethereum because of its fast processing speed and low gas fees.

Avalanche processes around 4,500 transactions per second whereas, Ethereum only processes 13-15 transactions per second.

The gas fee on Ethereum increases when there are more transactions in the queue waiting to be approved. But Avalanche doesn’t have any such issues as it processes transactions pretty quickly.

Therefore, many Ethereum-based Defi projects like Sushiswap, TrueUSD, Reef, bZx, and Securitize have already integrated with the Avalanche network. Avalanche is also a bridge so that the users can easily transfer their assets from one platform to the other.

Brief History of Avalanche (AVAX)

Avalanche network was launched by Ava Labs in September 2020. Kevin Sekniqi, Emin Gün Sirer, and Maofan “Ted” Yin played a vital role in developing this protocol. The fundamental information about this project was first released in May 2018.

Emin Gün Sirer started working on this technology with two of his doctoral students, Kevin Sekniqi and Maofan “Ted” Yin when he was working as a computer science professor at Cornell University.

The Initial Coin Offering ended in July 2020 and the project was finally launched in September 2020.

What Problems Does Avalanche Solve?

Avalanche is aimed at fighting off centralization within the crypto space. Thus, it fixes the two important issues found in the major blockchain network.


Congestion is an important factor that affects the reputation of Bitcoin, Ethereum, and other cryptocurrency networks in the traditional finance industry. These platforms can only process 5-15 transactions per second. The transaction time even increases when there are more transactions waiting to be validated.

On the contrary, their traditional counterparts Visa and Paypal have the ability to process thousands of transactions per second. This is where Avalanche appears as a better alternative to crypto giants as it can process 4,500-6,500 transactions per second.

Low Gas Fees

Continuously increasing gas fees is another major problem with the bigger blockchain networks. Bigger blockchains like Bitcoin and Ethereum prioritize the transactions based on the amount of gas fee attached to the transaction.

So, the users, who want their transaction to be processed earlier, pay the extra fee to bring their request on top of others. As a result, other users have to pay a higher amount for getting their transaction processed otherwise they have to wait for a long time for the complete validation.

Avalanche has established a network of sub-chains that complete the transactions faster. These chains reduce the traffic from the main chain making it easier for everyone to process transactions with low gas fees.

How Does Avalanche Network (AVAX) Work?

Unlike other cryptocurrencies, the Avalanche network is made up of three blockchains including Exchange Chain, Contract Chain, and Platform Chain.

Exchange Chain (X-Chain) – This blockchain operates through Avalanche consensus mechanism and it’s responsible for asset management.

Contract Chain (C-Chain) – As the name suggests, the contract chain is responsible for the creation and management of smart contracts. It operates through the Snowman consensus mechanism. The contract chain is EVM (Ethereum Virtual Machine) compatible. It means the users can easily deploy their Ethereum-based applications on this network. Thus, the users can continue using the Ethereum Developer Tools while taking advantage of Avalanche’s advanced features.

Platform Chain (P-Chain) – This blockchain also operates through the Snowman consensus mechanism and it coordinates the validators. The users can create Layer1 and Layer2 blockchains using this network.

These three blockchains play a vital role in improving speed, security, and flexibility because they complete their duties in parallel without affecting the performance of each other.

Avalanche uses a Proof-of-Stake consensus protocol for validating transactions. AVAX holders can participate in this process by staking a minimum of 2,000 AVAX tokens.

What are the Use Cases of AVAX?

AVAX is the native token of the Avalanche network used for different operations. With a circulating supply of 266 million coins, it has a market cap of $18.7 billion. It’s the tenth leading cryptocurrency in terms of market cap.

Pay Transaction Fees

The users pay a small amount of AVAX tokens when transferring assets to each other. No matter which assets they’re transferring, the transaction fee is always paid in the form of AVAX tokens because it’s the default currency of this network.


AVAX token holders can stake their coins to become validators. The validators need to stake at least 2,000 AVAX tokens to participate in the process. If a person doesn’t have the required amount of AVAX tokens, he can earn a percentage of the rewards by delegating his tokens to a validator.

The validators receive AVAX tokens as a reward when they validate a transaction according to the terms and conditions of the Avalanche network.

Creating Subnets and Tokens

The users can also create subnets and custom tokens using AVAX tokens. Whether they’re building decentralized games, Defi protocols, or NFTs, they need AVAX tokens to complete the process.

Is Avalanche the Most Energy-Efficient Crypto Network?

Avalanche claims to be the most energy-efficient crypto network so far but it’s not true. Yes, its energy consumption is pretty low as compared to Bitcoin and Ethereum because it uses the proof-of-stake consensus mechanism for transaction processing.

But it’s not the only crypto network using this protocol. There are other crypto networks like Cardano, Polkadot, Solana, Tezos, and more that use the proof-of-stake mechanism. So, far Polkadot is the leading platform in terms of energy efficiency.

However, Avalanche wins the game if we evaluate the energy consumption of each unit on the platform.


Avalanche is one of the most energy-efficient blockchain networks designed to fix the problems of older blockchains. It provides faster transaction speed with low gas fees. It offers an excellent level of decentralization and security with its advanced consensus mechanism. If you need more information about how Avalanche Network (AVAX) works, feel free to get in touch with us.

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