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Gate.io Blog Avalanche: Potential Ethereum Rival Or Not?

Avalanche: Potential Ethereum Rival Or Not?

06 June 22:59


Avalanche is a fourth-generation DeFi protocol whose native token is AVAX.

Avalanche uses the multi-chain approach to reduce transaction fees and improve programmability.

Avalanche is a creation of the Ava Labs.

Launched in September 2020 and was headed by Cornwell Researcher Emin Gün Sirer.

Avalanche prioritized scalability, ease of navigation, and leverage across the blockchain technology.

This DeFi protocol is considered a replica of Ethereum; another DeFi protocol launched five years before Avalanche.

Avalanche uses the Proof of Stake (PoS) protocol, while Ethereum uses the Proof of Work (PoW) protocol.

Avalanche uses three different blockchain protocols; X-chain, P-chain, and C-chain.

Ethereum is less scalable and provides a minor support system for its compliant Decentralized Apps than Avalanche.

Potential investors will prefer a stake in Ethereum, while developers prefer building on Avalanche.

The Blockchain Network keeps getting additional platforms built by developers who are either making a replica of an existing protocol or coming up with new ideas. As more investors show interest in the blockchain sector, the developers are ready to bring their ideas to life.

There are more smart contract-enabled applications that leverage blockchain technology. These applications or networks allow developers to create unique and intuitive Decentralized Apps for the ever-increasing market.

One Decentralized popular protocol that leverages blockchain technology is Avalanche (AVAX). Experts and industry players opine that Avalanche is a replica of Ethereum, another Blockchain protocol.

To understand the rationale behind this sentence, we shall identify the concept behind Avalanche (AVAX) and juxtapose it with the Ethereum blockchain networks. At the end of our assessment, we can therefore conclude whether Avalanche is a potential rival to Ethereum (ETH) or not.


What Is Avalanche?




Avalanche (AVAX) is considered a fourth-generation Decentralized Finance (DeFi) protocol. This blockchain protocol leverages the multi-chain approach to reduce transaction fees and improve programmability.

Avalanche is a creation of the Ava Labs led by Cornell Researcher Emin Gün Sirer. Ava Lab officially launched its project's mainnet in September 2020.

In developing Avalanche, scalability, ease of navigation, and leverage across the blockchain technology were prioritized. It combines three different blockchains to ensure adequate support for compliant Decentralized Apps (Dapps).

These compliant Decentralized Apps are protocols that follow a complex set of rules. The rule sets, in turn, are a part of a regulatory requirement.

Developers that use Avalanche can determine how each digital asset is traded, shared, and hosted for the lifespan of a project. Developers mainly use Avalanche for creating robust Decentralized Applications.

The Avalanche blockchain protocol operates as a frictionless payment system, Decentralized Finance (DeFi) ecosystem, and cryptocurrency. X-chain, C-chain, and P-chain are the three blockchains that serve different roles in Avalanche.

Avalanche integrates the Proof-of-stake Consensus mechanism. Users of Avalanche have a native token called the AVAX; you can stake your AVAX to be eligible as Validator nodes. These nodes run virtual machines and add new blocks of transactions to the blockchain.

Having explained the concept behind Avalanche, how it works and how it is being deployed in the blockchain network, we shall now juxtapose it with Ethereum and reach a conclusion.


Is Avalanche A Rival To Ethereum?



Image: CryptotvPlus

Experts assert that the virtual tussle between Avalanche and Ethereum is not yet over. Why do experts consider it a battle?

Ethereum is undoubtedly the largest and most diverse Decentralized Finance (DeFi) ecosystem leveraging blockchain technology. It demonstrated the concept of a smart contract, which Avalanche followed the same path.

While both Avalanche and Ethereum are decentralized platforms where developers can build other decentralized apps, they run on different consensus mechanisms.

Avalanche uses the Proof of Stake (PoS) mechanism, while Ethereum uses the Proof of Work (PoW) mechanism. The Proof of stake mechanism is faster, more advanced, and more scalable than the Proof of work mechanism.

Due to these reasons, Ethereum is deploying the Proof of Stake mechanism in its upgraded version, Ethereum 2.0. The deployment is expected to improve the Ethereum network's usability and other benefits for developers using the network.

Ethereum lacks support for compliant Decentralized Applications ( DApps). The support provided by the Ethereum network for protocols that follow complex rule sets is abysmal.

In Avalanche, there is a robust support system for its compliant Decentralized Apps. This feature makes Avalanche the ideal network for Decentralized Apps servicing highly regulated industries.

In terms of scalability, Avalanche is far ahead of Ethereum. The former uses a multi-chain design that provides excellent linear scalability, and the avalanche network can process transactions in sub-seconds.

According to the Company Bench assessment, Avalanche can support over 6,500 transactions per second and increase to millions per second. Ethereum, on the other hand, can process about 15 transactions per second.

Albeit, Ethereum is looking into this feature, and it is expected that Ethereum 2.0 will process thousands of transactions per second.
Lastly, Avalanche provides its developers and users with one of the lowest gas fees on all programmable networks. As a user of Avalanche network, you pay minuscule fees for mining new digital assets and creating new blocks.

Ethereum has one of the highest gas fees and the gas fee increases when the network becomes busier due to congestion. This blockchain network is built so that miners queue and compete to get their blocks mined or get their transactions validated.


Conclusion



Avalanche and Ethereum have similar operations and are built for the same purpose. While Ethereum was launched in July 2015, Avalanche was launched in September 2020.

Even though Avalanche has more smart and seamless features than Ethereum, the latter still operates as the largest DeFi ecosystem to date. This particular feature gives Ethereum an edge over Avalanche.

The rivalry is a healthy one as all the advantages Avalanche has over Ethereum is being considered and improved on in the Ethereum 2.0 version that will be fully launched soon.

Developers will prefer to launch their Decentralized Apps on the Avalanche network, while investors will choose to have a stake in the Ethereum network.



Author: Valentine. A, Gate.io Researcher
This article represents only the researcher's views and does not constitute any investment suggestions.
Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
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