Avalanche can basically be described as a decentralized, open-source blockchain with smart contract functionality. According to its official website, Avalanche is an “open, programmable smart contracts platform for decentralized applications”. The website also claims that “Avalanche is the fastest smart contracts platform in the blockchain industry, as measured by time-to-finality”.
Like every other smart contract platform, Avalanche is primarily used for launching decentralized applications, which serve different purposes. It is a notable blockchain in the DeFi space, and it is also used to create apps in the gaming niche.
Like most public blockchain networks, Avalanche has a native currency— AVAX. This is the digital asset that powers the network and determines individuals’ stake in the Avalanche ecosystem. AVAX is used for settling transaction fees and can also be staked to secure the network.
At this point, it is important to reiterate that the Avalanche network is made up of three component chains. The functions of these chains are as follow:
- Exchange Chain (X-Chain) – which is used to send and receive funds on the network
- Platform Chain (P-Chain) – which is used for Avalanche staking and facilitating validator activities
- Contract Chain (C-Chain) – which is used for the creation of smart contracts and DeFi apps
The descriptions of the different chains in Avalanche summarize how the entire network works. The native token of the network, AVAX, is another important component to keep in mind. By serving as the asset that secures the network, AVAX enables fast peer-to-peer transactions, decentralized computation and storage, as well as the creation of new subnets (blockchains).