Avalanche is a layer-one blockchain that functions as a platform for decentralised applications and custom blockchain networks.
It is one of Ethereum's rivals, and aims to unseat Ethereum as the most popular blockchain for smart contracts.
It aims to achieve this by having a higher transaction throughput of up to 6500 transactions per second without compromising scalability.
This is possible thanks to Avalanche's unique architecture.
The Avalanche network consists of three individual blockchains: X-Chain, C-Chain and P-Chain.
Each chain has a distinct purpose, which is radically different from the approach used by Bitcoin and Ethereum, i.e.
having all nodes validate all transactions.
Avalanche blockchains even use different consensus mechanisms depending on their use cases.
After the launch of its mainnet in 2020, Avalanche has worked on developing its own ecosystem of DApps and DeFi.
Different Ethereum-based projects such as SushiSwap and TrueUSD have been integrated with Avalanche.
In addition, the platform is constantly working to improve interoperability between its own ecosystem and Ethereum, such as through the development of bridges.
Avalanche attempts to solve the blockchain trilemma, which posits that blockchains cannot achieve a sufficient degree of decentralisation at scale.
One consequence of this is high gas rates, as is often the case with Ethereum.
To solve this problem, Avalanche designed three interoperable blockchains.
The exchange chain (X-Chain) is used to create and exchange native AVAX tokens and other assets.
Similar to the ERC-20 standard on Ethereum, these tokens follow a standardised set of rules.
It uses the Avalanche consensus mechanism.
The C-Chain hosts smart contracts and decentralised applications.
It has its own Avalanche virtual machine, similar to the Ethereum virtual machine, allowing developers to fork EVM-compatible DApps.
It uses Snowman's consensus mechanism.
The P-Chain coordinates network validators, keeps track of active subnets and allows the creation of new subnets.
Subnets are sets of validators, something like a cartel of validators.
Each subnet can validate multiple blockchains, but a blockchain can only be validated by one subnet.
It also uses the Snowman consensus mechanism.
This division of computational tasks allows for higher performance without compromising decentralisation.
For example, private blockchains in the network might require the validators in their subnetwork to be sufficiently decentralised geographically or to comply with certain regulations.
Behind this modular structure, Avalanche improves its interoperability with other blockchains that wish to integrate with the Avalanche ecosystem.
In addition, the two different consensus mechanisms are designed with the requirements of each blockchain in mind, further improving its efficiency.
