Should I invest in AVAX?

I invested in Avax, which is one of the major layer1 altcoins. But why did I make this decision? Is investing in Avax logical? In this article, I will try to find answers to these questions.

What is Avax?

AVAX was founded in 2020. AVAX is the native cryptocurrency of the Avalanche blockchain and is also used for transaction fees on the Avalanche network. Avalanche is a blockchain protocol that can perform transactions at high speed and low cost, providing a suitable platform for various applications.

What are the features that distinguish Avax from other blockchains?

We can summarize the advantages of Avax in 5 main points:

1. High Transaction Speed: Unlike traditional blockchains, Avalanche uses the Avalanche Consensus Protocol as its consensus protocol. This allows Avalanche to have much higher transaction speeds. The Avalanche network can process thousands of transactions per second.
2. Low Transaction Fees: In addition to high transaction speeds, Avalanche also offers low transaction fees. This allows users to pay fewer fees when making transactions.
3. Flexibility: Avalanche is a flexible platform that can be used for various applications. It supports smart contracts and can be customized for different types of applications.
4. High Security: Avalanche ensures security by using the Byzantine Fault Tolerance (BFT) algorithm. This makes the network more secure and resilient. Interoperability:
5. Avalanche offers a network gateway protocol called “Bridges” that can connect multiple blockchains. This allows the Avalanche network to interact with other blockchains and enables users to transfer assets between different blockchains.

Popularity Analysis

In my opinion, the most important aspect of Avax, in addition to the features mentioned above, is its founder, and university professor Emin Gün Sirer. Despite living in America, Emin stands out with his Turkish origin. The percentage of Turks in the cryptocurrency market cannot be denied. Especially when we look at Google Trends, we see that Turkey is by far the most popular country for Avax.

I believe the biggest reason behind this is Emin Gün Sirer’s Turkish identity. It is also possible to see that the interest in the coin is decreasing. However, I do not think this is very important because the general interest in the cryptocurrency market is also decreasing.

When we look at Coingecko data, we see that Avax is ranked 18th. Considering its potential, I do not think it has received the ranking it deserves.

Although Avax has many similarities to Ethereum, its limited total supply makes it more similar to Bitcoin.

Does Avax have an inflation problem?

Many accounts that criticize or attack Avax argue that it is an inflationary coin. I believe this argument is incorrect. Avax’s inflation is entirely related to its vesting period and is similar to Bitcoin’s inflation in its early years. The inflation rate of Bitcoin was also high during its first years. The important thing to know is that this rate will decrease over the years. Unfortunately, the ecosystem needs this in order to develop.

In the visual I obtained from Avalanche’s whitepaper, you can clearly see the resemblance with Bitcoin. Over the years, this issue will become less significant. Additionally, there is a burn mechanism depending on the usage of the network. Although the current figures are limited, they may vary in the coming years.

No blockchain works for free. There must be a reward mechanism. This can be done with proof of stake or proof of work mechanisms, but the result remains the same. It is not possible to live without giving food. At the same time, a coin that enters the market as a layer1 blockchain must also give incentives to project developers in the competitive environment.

Are there any Missing Features of Avax?

Like all cryptocurrency projects, Avax also has problems. The most important is that, on the road to decentralization, all coins somehow act like centralized structures. For example, ETH switched from proof of work to proof of stake last year. How could they do this so easily? Wasn’t Eth a decentralized cryptocurrency? Unfortunately, things in this market are not as decentralized as we think. After a series of operations called a fork, this transition was completed. We can say that it is a kind of cloning process. If this cloning is well-received, the old system will be abandoned.

Looking specifically at Bitcoin, years ago, coins such as Bitcoin Cash or Bitcoin SV were released as forks, but because they didn’t receive the necessary attention, Bitcoin continued its life strongly.

In summary, Avax’s biggest problem is that, as a blockchain produced as an alternative to all other layer1 blockchains, it must be aware that there will always be better blockchains than itself. It is never enough to be technically good alone. It is essential for it to survive by building a community.

Is Avax Better Than Other Blockchains?

I think AVAX is mainly better than ADA and DOT. I’m not against other projects of course but AVAX is more useful than them. You can easily use C-chain with metamask like ETH blockchain. If you want to send only avax only to another wallet you can use X chain with super fast and cheap features. ETH still has high fees and scaling problems. Even AVAX also has issues when network is a lot, it has subnet solutions that can be a game changer for the next bull run.

Subnets are similar to layer2 solutions. However, you can imagine thousands of layer2 blockchains on top of one blockchain which means that scaling is horizontal rather than vertical.

Conclusion

For me, Avax’s biggest advantage is its appeal to the Turkish community. The percentage of Turks trading in the cryptocurrency markets is not small. In a potential bull market, I am sure that Turks will buy this coin. The biggest handicap of every bull market is the failure of old coins to rise as expected. Avax makes me think about this. I’m sure there will be many layer 1 projects in the market. Some of them are aptos or sui. However, for now, if Avax can survive the bear market like ETH did, I believe there is no obstacle for it to make good gains. Therefore, it definitely has a place in my portfolio.

References

https://www.avalabs.org/whitepapers

https://www.coingecko.com/en/coins/avalanche

https://trends.google.com/trends/explore?date=today%205-y&q=avax&hl=en-GB