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Avalanche (AVAX): How it works and where to buy
Learn more about how Avalanche works, why the AVAX token is useful and how to buy it.
AVAX is the native token of Avalanche.
Avalanche is a decentralised network that introduces a unique consensus protocol in order to host a network of high-speed blockchains, smart contracts and applications. The AVAX token is primarily used for transactions, staking and network fees.
Buy Avalanche (AVAX) by comparing options in the table below.
How to buy AVAX
Here’s a step by step guide to one way of buying AVAX. Note that there might be other options available, so you may want to compare cryptocurrency exchanges to find the one that’s right for you.
- Find an exchange that supports AVAX, such as Binance.
- Create a Binance account and make a deposit.
- Search for an AVAX market, and trade a suitable cryptocurrency for AVAX. For example, to buy AVAX on the AVAX/BTC market you will need to have some Bitcoin to trade for AVAX.
Live Avalanche (AVAX) price
How does Avalanche work?
|Circulating supply (approx. as of November 2020)||24,500,000|
|Purpose||Proof-of-stake and fees|
The Avalanche network was designed in response to the scalability issues encountered by earlier generations of smart contract platforms, in particular Ethereum.
At the core of the Avalanche platform is its novel consensus protocol, which is also known as Avalanche. The Avalanche consensus protocol was developed in response to the scalability issues encountered by earlier generations of blockchains, such as slow transaction speeds on Bitcoin and Ethereum. Instead of using Nakamoto consensus which was introduced by Bitcoin and adopted by many blockchains that followed, Avalanche consensus is a brand new method of validating transactions, which allows for in excess of 4,500 transactions per second using a proof-of-stake model.
Sitting on top of the consensus protocol is the Avalanche network itself, which essentially supports a myriad of blockchains interoperating with one another. You can think of Avalanche as the parent network (like the Internet), with a series of subnetworks (blockchains) operating within it. This allows for a granular approach to programming, meaning that blockchains with different rules, purposes and users can all operate somewhat independently while remaining part of a greater whole.
As for users, Avalanche will look like any other blockchain network.
It will host an array of familiar features, such as decentralised applications (dApps), tokenised assets, decentralised exchanges and smart contracts – albeit with a different set of rules dictating how it all works behind the scenes. To demonstrate this, the creators of Avalanche, Ava Labs, launched Athereum. Athereum is an Avalanche-based version of Ethereum with all the features and applications of Ethereum, but instead running on the much faster Avalanche protocol.
What does AVAX do?
AVAX is the native token of the Avalanche network, which means it is used as the primary currency for network transactions, including gas fees and payments. AVAX is also used as the basic unit of account between the different blockchains which operate on the network, despite each of these networks potentially having their own currency.
Staking is another one of the primary uses for AVAX.
Avalanche uses a proof-of-stake consensus protocol to keep the network secure, which means users will be able to lock-up their coins to become a validator. In return for faithfully verifying transactions on the network, validators will be rewarded with additional AVAX tokens. To participate in staking, users will need to deposit a minimum of 2,000 tokens, with 50% of the total supply of AVAX tokens set to be distributed through staking rewards over the lifetime of the network.
What to watch out for
Avalanche is yet another new protocol competing in the over-saturated market of base-layer blockchains which include platforms such as Ethereum, EOS and Tezos.
As a new protocol, it is yet to have its vulnerabilities and potential weaknesses thoroughly tested.
AVAX block rewards are set to vary over time in accordance with governance decisions, which means any return on investment via staking will be dynamic. In the first year after launch, the staking reward is set at a target between 7% and 12%.
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