Avalanche is fast emerging as a serious Ethereum competitor in the Decentralized Finance (DeFi) and Non-fungible token (NFT) development space. This Layer-1 blockchain network is designed to solve the current shortcomings of Ethereum, including scalability, interoperability and transaction fees. A legacy that it appears to be achieving quite seamlessly.
Launched back in September 2020 by Ava Labs, Avalanche’s total transactions have grown to over $18.5 million, making it the fifth-largest blockchain network as of press time. Over 358 projects have launched on this Layer-1 blockchain within the past year, most of which are DeFi and NFT focused innovations. The current Total Value Locked on Avalanche’s Dapps stands at $8.5 billion.
So, what makes Avalanche a better Layer-1 platform compared to Ethereum? While some Ethereum die-hards may disagree, Avalanche’s value proposition as a faster smart contract ecosystem has earned the network a seat in the DeFi and NFT development niche. Unlike Ethereum, Avalanche leverages a three-tier blockchain ecosystem, featuring the Exchange (X-Chain), Contract (C-Chain), and Platform (P-Chain).
These three chains are tasked with different roles to reduce the overall workload on the Avalanche mainnet. X-chain enables users to create and manage assets within the Avalanche ecosystem. Meanwhile, C-chain facilitates smart contract development while the P-chain coordinates network validation by tracking the subnets and enabling the creation of new subnets.
Given this fundamental architecture, Avalanche has managed to position itself as a faster smart contract network, touting a transactional throughput of 4,500 tps. DeFi and NFT innovators are flocking into this Layer-1 blockchain, including those previously built solely on the Ethereum blockchain. The following section will feature some of the prominent Dapps on Avalanche to paint a picture of the developments and future possibilities. 1. Pangolin
Pangolin is a decentralized exchange (DEX) built on the Avalanche ecosystem; it runs on the automated market maker (AMM) model, just like Uniswap. However, Pangolin is much faster and cheaper, given that it leverages Avalanche’s three-tier blockchain infrastructure. This DEX solves scalability and transaction issues, allowing users to swap tokens in a matter of seconds while only paying a few cents as transaction fees.
Initially, Pangolin was developed by Ava Labs engineers, the same team that pioneered the Avalanche blockchain. This changed after the project became independent and hired the current team from Avalanche’s DeFi community. Being a decentralized platform, Pangolin is powered by its native token PNG, a community-driven token that allows holders to participate in the ecosystem governance.
With barely a year in existence, Pangolin has hit several milestones, including over $300 million in total value locked (TVL). Daily users have also grown past 5,000, while the total traded volume is well over $7 billion. Notably, Pangolin users are not limited to Avalanche tokens; they can trade Ethereum tokens by bridging through Avalanche and swapping against the PNG pair. 2. Benqi
With most of the DeFi activity currently concentrated on Ethereum, Benqi has built a non-custodial liquidity market protocol on Avalanche. This protocol allows users to perform functions such as lending and borrowing. Additionally, liquidity providers can earn a passive income by staking or borrowing other crypto assets in an over-collateralized position.
Unlike the liquidity market protocols built on Ethereum, Benqi’s ecosystem enables instant liquidity supply and withdrawal from the shared liquidity pools. Borrowers can also access instant loans and keep live track of the interest rates, depending on the forces of demand and supply. All this at cheaper transaction fees.
As for the depositors/lenders, Benqi provides them with Qi tokens (tokenized yield-bearing tokens). These native crypto tokens can be traded on DEXes such as Pangolin and Trader Joe within the Avalanche ecosystem. It is also noteworthy that Benqi is in a partnership with Pangolin and currently features PNG liquidity reward pools (PNG-QI) with a 5x factor. 3. Spores
Spores is one of the pioneer NFT-focused innovations to debut on the Avalanche blockchain. The project envisions a full-stack NFT ecosystem that will enable creators to develop, share and maintain complete authenticity of their life’s work. At the core, Spores allows users to issue, auction and trade NFTs, alongside DeFi tokens.
This NFT platform leverages smart contract technology to authenticate the NFTs and track their ownership history while providing users with a secure decentralized trading platform. Some of the Spores NFT ecosystem features include a cross-chain NFT marketplace, NFT DEX, and a minting/management interface.
With the NFT market expanding by the day, Spores sets itself apart as a decentralized NFT ecosystem that incentivizes users through royalty sharing. The transaction fees on NFT trades are distributed to the rightful stakeholders, […]
source Can Avalanche challenge Ethereum’s DeFi and NFT Market dominance? The tides are changing!
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