Avalanche
Avalanche (launched September 2020) is a layer 1, decentralized, open-source proof-of-stake blockchain developed by Ava Labs, a company founded by Emin Gün Sirer, Maofan "Ted" Yin, and Kevin Sekniqi.[15][11] The native cryptocurrency of the blockchain is AVAX. Avalanche is increasingly used as a platform for sovereign L1 chains, institutional tokenization, and gaming.[11][12]
History
Avalanche was first conceptualized and shared on InterPlanetary File System (aka IPFS) in May 2018 by a pseudonymous group of enthusiasts named "Team Rocket."[16] Later it was developed by a dedicated team of researchers from Cornell University. The research was led by Emin Gün Sirer, a professor of computer science and software engineer, assisted by doctoral students Maofan "Ted" Yin and Kevin Sekniqi.[1] Following the research stage, Ava Labs was founded to develop the network primarily to meet complex financial industry requirements.[1] In March 2020, the AVA codebase for the Avalanche consensus protocol was made available as open-source and released to the public.[17]
Avalanche's initial coin offering (ICO) ended on July 15, 2020, followed by the launch of mainnet in September 2020 during which the protocol also issued the native token AVAX (an acronym for "Avalanche").[4]
Technology
Avalanche is an open-source platform offering interoperable and scalable decentralized finance applications and enterprise blockchain deployments. It uses a proof-of-stake consensus mechanism, requiring validators to stake AVAX to validate transactions on the network. The platform features multiple chains, with core chains and application-specific subnets. Validators must be a member of the Primary Network; all other subnets are optional.
Avalanche’s consensus is based on the Snow family of probabilistic protocols (including Avalanche and Snowman), which use repeated random sampling of validators and metastable voting to reach agreement.[16] This approach enables high throughput, low-latency transaction processing and sub-second finality for well-behaved network conditions.[9]
In September 2026, Avalanche activated the Helicon network upgrade on mainnet, reducing the minimum staking lock-up period from 14 days to 2 days and introducing auto-renewed staking to simplify validator participation.[19] Helicon raises the uptime requirement for earning rewards, gradually adjusts the reward curve to favor longer staking commitments with the goal of lowering AVAX inflation by about 0.5–1 percentage point, and requires validators to upgrade to AvalancheGo v1.15.0 to remain connected to the network.[19] The upgrade also introduces Continuous Execution to improve scalability and makes C-Chain gas prices more dynamic based on network demand.[19]
The Primary Network contains three blockchains:
Contract Chain (C-chain)
It hosts smart contracts and decentralized applications. It has its own Avalanche Virtual Machine, similar to the Ethereum Virtual Machine (EVM), allowing developers to fork EVM-compatible DApps. It uses the Snowman consensus mechanism.[2]
Exchange chain (X-chain)
The X-Chain handles the creation of new digital assets and the exchange of tokens between the core blockchains and their various subnets. It uses the Avalanche consensus mechanism.[9]
Platform Chain (P-Chain)
This is the base staking platform that manages network validators and enables developers to create new subnets. Every validator must stake on the P-Chain and participate in securing Avalanche’s Primary Network.[9]
Avalanche9000 and Avalanche L1s
Etna, also referred to as Avalanche9000, is a major network upgrade that activated on mainnet on December 16, 2024 and has been described as the largest protocol upgrade since Avalanche’s launch.[11][12] The upgrade introduced several Avalanche Community Proposals (ACPs) aimed at restructuring how subnets, fees, and economic incentives are organized across the network.[11]
Under ACP-77, traditional subnets were reworked into lower-cost Avalanche Layer 1 (L1) networks whose validators no longer need to stake 2,000 AVAX on the Primary Network.[13] Instead, each L1 validator pays a small ongoing AVAX fee to participate in validation, which significantly reduces the capital required to launch and operate a dedicated chain while preserving validator accountability through recurring payments.[13][12] This change is intended to make sovereign, application-specific L1s more economically accessible while remaining anchored to Avalanche’s shared infrastructure.[11]
ACP-125 modified the C-Chain fee market by reducing the minimum base fee from 25 nAVAX to 1 nAVAX, aligning the floor price of gas more closely with observed market demand.[14][11] The lower minimum base fee is intended to support cheaper transactions for users and applications, while relying on higher aggregate activity over time to sustain fee-based revenues and validator incentives.[14]
AVAX Token
The Avalanche (AVAX) token is the native token of the Avalanche platform and is used to secure the network through staking, transact peer-to-peer, pay for fees, and provide a basic unit of account between the multiple subnetworks created on the Avalanche platform. The token's ticker is denoted as AVAX and it has a total supply of 720 million AVAX.[3]
In September 2026, Bitwise launched a staking-enabled Avalanche exchange-traded fund (ETF) under the ticker BAVA, offering regulated exposure to AVAX while staking roughly 70% of its holdings toward an estimated 5.4% yield target and attracting around $18–22 million in early inflows; the launch coincided with a roughly 55% weekly increase in the AVAX price.[18]
Tokenomics
At launch, 360 million AVAX (50%) were minted and sold through private and public sales. The remaining 360 million AVAX (50%) are for staking rewards distributed over the following decades.
- 2.5% - seed sale, with 10% released on mainnet launch and the rest being released every three months.
- 3.5% - private sale, with 10% released on mainnet launch and the rest being released every three months.
- 10% - public sale, with 10% released on mainnet launch and 15% released every three months over a period of 18 months.
- 9.26% - allocated to the foundation, released over ten years.
- 7% - community endowment, released over twelve months.
- 0.27% - testnet incentive program, released over one year.
- 5% - strategic partners, released over four years.
- 2.5% - airdrops, released over four years.
- 10% - team, released over four years.
- 50% staking rewards.[2]
Governance
AVAX provides on-chain governance for certain network parameters, enabling participants to vote on changes and settle network upgrade decisions democratically.[10] These parameters, such as the minimum staking amount, reward rate, and fee schedule, may be subject to dynamic parameter optimization through a crowd oracle.[17] Governance is limited to a predetermined set of economic parameters, with changes subject to hysteresis and time bounds to keep the system predictable and safe.[17] Protocol upgrades themselves are typically coordinated off-chain, implemented through new client releases, and activated by validators upgrading their software.[10]
Funding
Avalanche and Ava Labs have been backed by multiple venture funding rounds and token sales.
Funding Rounds
In February 2019, AVA Labs raised $5.9 million from VC firms: Andreessen Horowitz, Polychain, MetaStable, and Initialized Capital, as well as individual investors Balaji Srinivasan,[5] Naval Ravikant,[6] and Ramtin Naimi of Abstract Ventures.[7][8]
In June 2020, the development team, Ava Labs raised $12.6 million in a private token sale. Participants included Galaxy Digital, Bitmain, Initialized Capital, NGC Ventures, and Dragonfly Capital, among others.[8]
On July 15, 2020, Ava Labs raised $37.58 million in a public sale. Participants purchased tokens through three options:
- Public Sale Option A1 (Staking Round #2): This option allowed participants to purchase tokens at $0.50 per AVAX, which was subject to a one-year vesting schedule with quarterly unlocking.
- Public Sale Option A2 (Staking Round #2): This option allowed participants to purchase tokens at $0.50 per AVAX, using an 18-month vesting schedule, with quarterly unlocking. Option A2 allowed purchasers to a much larger set of tokens than Option A1.
- Public Sale Option B: This option allowed participants to purchase tokens at $0.85 per AVAX, with no lockups. In order to prevent concentration and incentivize distribution, this allocation enforced a maximum check size of $5,000.[8]
