Avalanche (AVAX) Edging Closer To Top 10, Can It Usurp Litecoin?

Avalanche (AVAX), like many other cryptos with their native blockchains, have been called Ethereum killers in the past. When placed amongst the many big smart contract blockchains like Cardano, Solana, Cosmos, and even Polkadot, Avalanche stands tall. In 2021, AVAX has seen a tremendous rise in its market capitalization and overall, its price value too. The big question now is whether it can go so high as to flip Litecoin, a proven medium of exchange complementary to Bitcoin.

Brief Overview of the Avalanche Project

Avalanche was created by Ava Labs, a New York-based software development firm developed by Emin in 2018. After a series of funding rounds totaling more than $60 million, the Avalanche main net finally went live in September 2020. Avalanche is named after a unique proof-of-stake cryptocurrency consensus protocol proposed by an unnamed number of individuals known only as “Team Rocket” in 2018.

Avalanche is a Smart Contracts blockchain on which decentralized apps (dApps) with actual value are developed. Decentralized Finance (DeFi) and NFTs are two major use cases. Cardano, Solana, and Polkadot are among the various smart contract blockchains that are in fierce competition with Avalanche.

There are three critical issues that Avalanche tries to address: scalability, high transaction fees, and interoperability. Avalanche employs a combination of methods to solve the issues mentioned, making it relatively unique. Avalanche is made up of three blockchains that are all interoperable: Exchange Chain (X-Chain), Contract Chain(C-Chain), and Platform Chain(P-Chain). X-Chains are used for developing and swapping AVAX tokens other digital assets. C-Chain is for creating smart contracts; developers can fork over Ethereum Virtual Machine (EVM) compatible dApps. P-Chain tracks active subnets’ coordinates and network validators and also allows the creation of new subnets. Subnets are a group of validators that provide consensus for custom blockchains.

When compared to executing all processes on a single chain, Avalanche enhances speed and scalability by assigning various roles to each blockchain. This component has been paired with 2 different consensus mechanisms customized to the demands of each blockchain by the developers. Avalanche’s native utility token AVAX connects all of these blockchains. Users require the token to stake and pay network fees, providing the ecosystem with a common asset that can be used across multiple Avalanche subnets.

Avalanche token (AVAX) Utility

AVAX is Avalanche’s native token, with a total maximum supply of 720 million. As a deflationary mechanism, all fees paid on the network are burned. There are three main applications for the token:

  • Staking your AVAX will make you a validator, you can also choose to delegate it to a validator. Validators can earn up to 11% APY and establish a specific percentage fee of the reward they keep from delegators who back them.
  • All subnets use AVAX as the common unit of account, which improves interoperability.
  • AVAX is also used to pay transaction fees and subnet subscriptions.

By staking AVAX tokens with the network, AVAX holders can earn returns. Becoming a validator or staking tokens with a validator can also earn you rewards. To become a validator, you must stake at least 2000 AVAX. Since these hardware requirements are so minimal, most basic laptops or desktop computers should suffice to start validating. You can also stake your tokens with a validator and get paid if the validator confirms transactions correctly.

Will AVAX Become a Top 10 Crypto

Investors generally use market capitalization as an easy guide to determine the price and direction of a token. Market cap is calculated by taking the product of “price per token” and the “circulating supply”. AVAX currently has a circulating supply of 220,286,577. As of the time of writing this, AVAX currently sits at 12th position of top crypto by market capitalization, with a market cap of $20 billion at a value of $94.24. AVAX is also up by 40.6% in the past seven days, recently flipping Litecoin by market cap and edging closer to Terra (LUNA) while continually rallying upward.

Shiba inu (SHIB) is currently above AVAX at position 11 on the chart, USD Coin (USDC), a stable coin, is also at 10th position and is currently above AVAX by market cap. Doge is currently in 9th position. Looking at these coins currently above AVAX and how much upward rally is going on with the avalanche project, it is possible we could see AVAX flipping these tokens and eventually stepping into the top 10. AVAX is still very undervalued and offers one of the best blockchain solutions in the crypto-verse.

Conclusion

The general sentiment around AVAX is bullish as we are seeing it pump to higher prices with the market cap surging by the day. Corrections are minimal, and it’s only a matter of time before Avalanche sits conveniently at the top 10, a position many believe to be befitting of a powerful blockchain like Avalanche.

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