Avalanche is one of the best-performing cryptocurrencies and platforms in recent months. Its cryptocurrency trades under the symbol AVAX. The currency has come of note following interest in Solana. Currently, most attention is being paid to the number of NFT and defi apps that are being built on top of ethereum.
However, this has also drawn attention to the drawbacks of ethereum which can result in slow transaction times, diminished liquidity, and high fees especially when markets get volatile. For these reasons, there are some doubts about its ability to keep scaling higher with its current structure.
This has led to interest in competing blockchain platforms like Solana and Avalanche which were more created for these types of applications. They also promise more speed and lower fees which would be necessary for it to achieve ambitions of having hundreds of millions of users.
Avalanche Background
It was launched in 2020 by Cornell Professor Emin Gün Sirer, Ph.D. candidate Kevin Sekniqi, and Maofan Yin and can handle decentralized applications and enterprise blockchain deployments more effectively than legacy systems.
Avalanche can confirm smart contract transactions in under one second. It differs in that it uses validators rather than a proof-of-stake mechanism. The platform also supports ethereum developer tools which means that developers can quickly start building for the platform.
One recent catalyst for Avalanche has been a $230 million private investment through the sale of its tokens from Polychain and Three Arrows Capital.
Trading History
This has resulted in Avalanche being one of the best-performing tokens of the last week as it's up 13%, while other coins like bitcoin, ethereum, and dogecoin are down 10%, 13%, and 15%. There's been selling in the cryptocurrency market following China's ban on all cryptocurrency trading.
Since it started trading in September 2020, AVAX is up 1,322%. If the coin can keep growing, attract investors, and have commercially viable applications built on top of its platform, then it could certainly keep going higher.
While many analogize cryptocurrencies to stocks, a better analogue would be real estate or digital real estate. If there is commercial development around some piece of land, then the value of the land would go up. This is the same type of logic that investors should apply to coins at the platform level.