Avax VS Ethereum: Avalanche as an Ethereum Rival | Atato (2024)

Avalanche is a powerful blockchain platform that’s among the numerousEVM-compatible chainssupported byatato crypto custodyservices. It’s known for the unique consensus mechanism and fast transaction throughput.

In this article, we’ll explore the Avalanche blockchain, its features and how it differs from other platforms, in particular, Ethereum.

Avalanche is a decentralized platform built to enable developers to create and deploy dApps (decentralized applications). Similar to many leading blockchains, includingBinance Smart Chain, Avalanche was designed to address the scalability issues and high costs of Ethereum.

Avalanche was created byAva Labs, a company founded by computer scientist Emin Gün Sirer. Its whitepaper was published in 2018 and the Mainnet officially launched in 2020. The aim was to provide high throughput while maintaining low latency and interoperability for all decentralized applications.

Avalanche uses a unique approach to achieve consensus among validators. Instead of relying on a single node to propose a block, the Avalanche protocol counts on a group of nodes, which are also referred to as subnets.

Within Avalanche, a subnet – a group of validators – communicate with each other to agree on the order of transactions. There is a sampling process called Snow used to achieve consensus among subnets. There are also sub-steps to the Snow consensus, such as Slush, Snowflake and Snowball built on top of the previous one. Why? Because they all combine into an avalanche, and then become unstoppable.

This sampling method involves repeatedly checking a group of nodes and counting how many times a particular transaction is selected. Once a transaction has been selected by a certain number of validators, it is then accepted into the network.

This is more of an advantage than a feature but Avalanche has always been known for its incredible speed. Thanks to the use of subnets and Snowball sampling, Avalanche is capable of near instant transaction finality and processing up to 4,500 transactions per second (TPS).

The high transaction throughput makes Avalanche suitable for applications that process heavy traffic, such as NFT games, metaverse, and even online gambling platforms.

The Avalanche blockchain can enable interoperability between different networks. This is done through the creation of bridge chains, which are chains that transfer assets from one platform to another. One of the most popular use cases of this technology is transferring ERC tokens from Ethereum to Avalanche C-Chain and back through the Avalanche Bridge. But you can also use it to transfer other assets, such as USDC or USDT.

Having interoperability provides Avalanche with a significant advantage over its competitors since developers can create applications that interact with multiple blockchains, therefore expanding their potential use cases. There’s a host of DeFi applications running on Avalanche, including some of the popular ones like Aave, GMX and FutureSwap.

The Avalanche blockchain uses a native token called AVAX. You can use this token to pay for transactions, stake for validation and participate in governance decisions, such as voting like we mentioned earlier.

AVAX has a total supply of 720 million tokens, with 320 million in circulation. The token has seen steady growth since launch and has been fluttering around the $18 mark.

It’s also important to note that to become a validator on Avalanche, the minimum stake is currently set at 2,000 AVAX, which is a little over $36,000. This, hence creates a massive barrier of entry to beginners and makes Avalanche slightly less attractive for casual investors.

A lot of people say Avalanche is Ethereum’s rival, and they may be right. Avalanche does many things better than Ethereum while still being EVM-compatible, but they do have more similarities than differences. One thing for certain is that nobody is really trying to actually replace Ethereum, except maybe Ethereum itself when Ethereum 2.0 is complete.

One significant difference between Avalanche and Ethereum is the consensus mechanism. Since Avalanche launched, Ethereum had been using the Proof of Work consensus (PoW) while Avalanche used Proof of Stake (PoS). This makes Avalanche more energy efficient and faster and overall more environmentally friendly. Ethereum has now switched to PoS, but this was their main difference for a long time.

Another glaring difference is scalability. Avalanche can process up to 4,500 TPS while Ethereum caps out at 15. The AVAX token can provide seamless value transfer and is more affordable than ETH. Avalanche also has lower gas fees than Ethereum.

But in terms of DeFi and non-fungible tokens (NFT), Ethereum still provides a better platform since it is older and much larger. Many new projects are built every day and most of them choose to launch on Ethereum simply because it’s the status quo and most developers are more familiar with Ethereum than Avalanche.

Now that you’ve learned about Avalanche, it’s time to add it to youratato workspace. Using ourBYOC (Bring Your Own Chain)feature, anyone can add Avalanche Contract Chain (also known as C-Chain) to atato custody and gain instant support.

Check out ourBYOC pageif you want to learn more and head to atato custody to start working on your Avalanche project!