> For the complete documentation index, see [llms.txt](https://www.digitalnations.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://www.digitalnations.xyz/web3-overview/the-web3-ecosystem/smart-contract-platforms/who-are-the-key-players/avalanche.md).

# Avalanche

<figure><img src="/files/eCVmQCg8ME28jgxYprZs" alt=""><figcaption></figcaption></figure>

Avalanche (AVAX) is a smart contract platform focused on transaction speed, low costs, and composability.  It was launched in 2020 by Emin Gün Sirer, a computer science professor at Cornell University.&#x20;

The protocol claims two unique innovations:&#x20;

1. A novel consensus mechanism that purports to have the “best of both worlds”, combining the speed and finality of Classical Consensus with the security and decentralization of Nakamoto Consensus.&#x20;
2. Like ETH 2.0, it uses a modular – three blockchain architecture – that allows each chain to specialize in a task.&#x20;

<figure><img src="/files/2Hc9jPpAWGfXm6nS7Bi0" alt=""><figcaption><p>Source: Messari</p></figcaption></figure>

While Avalanche is fast (up to 4,500 TPS per chain and theoretically infinite with the addition of more subnets) and relatively cheap ($0.01 per transaction), its core focus has always been on “finality”, which is the time it takes to finalize a transaction.  The project claims it will be able to complete transactions in <1 second, making it much quicker than Bitcoin (60 minutes), Ethereum (6 minutes) and even rival Solana.&#x20;

Notable dApps in the Avalanche ecosystem include:

&#x20;                                                                  **Avalanche Ecosystem Overview**

<figure><img src="/files/UrfvFQmhD3YhWXVkfBsK" alt=""><figcaption><p>Source:  <a href="https://coin98.net/avalanche-ecosystem">Coin98 Analytics</a></p></figcaption></figure>

What truly sets Avalanche apart, however, is its focus on DeFi and historical recent growth in that sphere.  Although growth has declined, the protocol increased its TVL from $191 million at the start of Q32021 to $11 billion by the end of the year.  That’s over 50x growth in six months!&#x20;

Avalanche is also highly compatible with Ethereum, making it relatively easy for developers to move their apps between the two chains.&#x20;

Some of the more common praises and criticisms of Avalanche are listed below:

<figure><img src="/files/88QJwT1m5iuTsgiEmIbD" alt=""><figcaption></figcaption></figure>

At first blush, Avalanche seems like a strong project – solid performance, extreme growth and a loyal community.  That said, I’m having trouble identifying the “moat” – I get that it’s clearly a sustaining innovation (i.e. potentially a better version of ETH) but I can’t see what’s disruptive about it (i.e. what ETH 2.0 can’t replicate).&#x20;

Furthermore, given that Avalanche gave out over $180 million in developer incentives in the second half of 2021, it’s difficult to tell how much of their growth is organic and how much is “bought-and-paid-for” (always a risk because developers tend to leave when the money dries up).&#x20;