# Avalanche

## History
Founded in 2019 by Dr. Emin Gun Sirer

## What is it
Avalanche (AVAX) is a cryptocurrency and blockchain platform that rivals Ethereum. AVAX is the native token of the Avalanche blockchain, which—like Ethereum—uses smart contracts to support a variety of blockchain projects.

Avalanche is generally governed by the proof-of-stake mechanism

## Idea
Avalanche has aimed to achieve the fastest time to finality for blockchain transactions since day one. Time to finality is how long it takes for a crypto transaction to process and be considered permanent and irreversible.
Avalanche achieves finality in one second, which is near-instant in real-world usage.

## Ecosystem
Avalanche’s core innovation is **it’s composed of three blockchains** rather than the usual one. The reason behind this design choice is quite brilliant: Each blockchain specializes in a task within the broader Avalanche ecosystem instead of having one chain do them all

Distributing tasks amongst different chains helps keep the Avalanche platform agile, allowing it to achieve the golden trinity of blockchain traits — decentralization, security, and scalability.

#### X-chain
The Exchange Chain (X-Chain) is the blockchain responsible for creating and transacting Avalanche assets.
#### C-Chain
The C-Chain runs smart contracts for the Avalanche platform and is EVM (Ethereum Virtual Machine) compatible. Being EVM compatible means anyone can deploy Ethereum smart contracts on Avalanche. Why is that a big deal? Because existing Ethereum apps, such as DeFi titans Aave, can easily deploy a version of their product on Avalanche.
Deploying Ethereum smart contracts on Avalanche gives developers access to the latter’s features using the same Ethereum developer tools as always.

#### P-Chain
Avalanche’s P-Chain allows anyone to create an L1 or L2 blockchain. You can even go as far as creating a group of them. In Avalanche terms, these blockchains are called subnets, with the P-Chain being the default subnet common to all.

## Tokenomics
AVAX is used to pay transaction processing fees, secure the Avalanche network, and act as a basic unit of account among blockchains in the Avalanche network

All fees are burned—removed from circulation—to enable AVAX to become scarcer over time. Avalanche users vote to decide the Avalanche transaction fee, making AVAX fees subject to change.

The maximum supply of AVAX is capped at 720 million tokens, but AVAX users govern how fast new coins are minted. AVAX holders can control the rate of new coin creation by voting to adjust the amount of AVAX paid as a reward for adding a new block to the Avalanche blockchain.

## Cons
- Stiff competition from platforms like Ethereum
- Avalanche validators must stake 2,000 AVAX tokens
- Malicious or careless validators are never penalized by losing their AVAX