Ultimate Guide To Avalanche - AVAX Explained

I know why you’re here.

You heard about this amazing project called Avalanche, that seems to be taking over the DeFi space.

But you looked into it, and it’s so. f#&king. complicated.

You watched a few videos. One of them explains the consensus mechanism. Another one explains the $AVAX token.

Some of them show you how to transfer funds across 3 different chains.

You’re still completely lost, and don’t even know what questions to ask. The system is just so complex that you can’t even figure out which topic to dive into first.

Don’t worry, friend. Mike D has your back.

In this article, I am going to show you everything that you could possibly want to know about Avalanche.

This is going to be a long article, so grab yourself a coffee and sit the F down, we’re about to do some serious learning.

I promise it’s worth it- this project has so many great things to offer.

What Is Avalanche?

Avalanche is a layer 1 blockchain with lightning fast transaction speeds and a tremendous amount of enterprise adoption.

This blockchain already has a ton of DeFi projects built on top of it. There are dApps for swapping tokens, yield farming, insurance, lending/borrowing, gaming, and so much more.

The company behind Avalanche is Ava Labs, and their mission is to tokenize all assets on planet Earth.

This obviously isn’t possible with current blockchain solutions, like Ethereum and Bitcoin. These blockchains simply can not scale large enough to accommodate a large user base.

This is due to the fact that the consensus mechanisms that these blockchains use, are very inefficient.

Most existing blockchains use a consensus mechanism known as “Nakamoto Consensus”, which was developed by the creators of Bitcoin (Satoshi Nakamoto).

Avalanche has created their own family of consensus mechanisms, known as the Snow family.

The Snow family- when combined with another scaling solution known as “sharding”, allows Avalanche to scale well beyond the current capabilities of other blockchains.

Avalanche Consensus - Snow Family Explained

There are currently 2 consensus protocols on Avalanche that we need to understand- Snowman++, and Avalanche Consensus.

In order to explain how these 2 protocols work, let’s start with the absolute basics and then work our way up.

Slush

The most basic building block of Avalanche’s consensus model is called Slush.

Let’s start with a very basic example of how Slush works.

Let’s pretend that we are trying to figure out what color something is. And let’s also pretend that there are 2 possible colors- red and green.

First, a user submits a transaction to a node on the Avalanche Network.

Let’s say that this transaction contains the following information:

“The color is green.”

As you can see, the node in the picture is not red or green yet. It is uncolored.

Here’s what will happen next. Upon receiving this message, the node will adopt the color in the message (in this case, green).

Once the node adopts its color, this is where we get to the interesting part.

This node will now need to query (or question) some other nodes, and ask them what they think about this transaction.

Let’s use a random example and say that there are 100 more nodes on the network.

As you can see, some of the other nodes already have a preference. Some of them already prefer green, some of them already prefer red, and the other nodes have not decided yet.

The original node (the one who first received the transaction from the user) is now going to choose a small, random group of these nodes and ask them which color they prefer. This process is known as subsampling.

The size of this random group is a variable known as k, and remains a constant size each time this process happens.

In our example, let’s say that k = 8. This means that our node will be querying 8 other random nodes about this transaction.

Out of the 8 random nodes chosen, we can see that 2 prefer green, 3 prefer red, and 3 are uncolored.

The ones that already have a preference will respond with their color.

This means that 2 will respond with “green”, and 3 will respond with “red”.

But what about the uncolored nodes? Those nodes will adopt the color that was submitted in the transaction- in this case, green.

The uncolored nodes will then also choose 8 other random nodes on the network, and ask them for their preference as well.

Our total results from these 8 nodes will be:

Once the original node gets these results back, here’s what will happen.

If more than half of the results are in favor of a certain color, then the node will adopt that color, and repeat the process several times (the amount of times the process is repeated, is a variable known as m).

So in this case, since more than half of the responses were “green”, the original node will remain green.

After this process is repeated m times, the node will make its final decision. Since progress is made every single time this subsampling process is repeated, if m is set high enough, then there is a high probability that all nodes on the network will end up agreeing on the same color.

So that’s the general concept of how Slush works.

There is one more characteristic of Slush that we need to be aware of. It is memoryless.

Each time a node queries a new random subset of nodes, the only thing that it retains is its color.

The node does not keep any information about the last query, or any of its previous communications with other nodes.

This may not seem important, but it is. Due to this lack of memory, Slush is not secure enough for financial transactions.

Which brings me to building block number 2 of the Avalanche Consensus model, Snowflake.

Snowflake

So now that we understand how Slush works, Snowflake should be very easy to comprehend.

Basically, Snowflake is just Slush with a “counter”.

Each consecutive time that a node queries the network and gets the same result, the node increases the count by 1.

If the node’s count gets to a certain threshold (a variable known as β, which can be adjusted), then the node will accept the result as its final choice.

However, if the node gets a different result than its current color, here’s what happens.

This is better and safer than Slush, but not quite good enough yet. Which brings me to building block number 3 of Avalanche Consensus- Snowball.

Snowball

Snowball is essentially Snowflake, with a “confidence counter” added to it.

There are a couple of key differences here that make this much better than Snowflake.

So let’s say that a node has queried the network 3 times. All 3 times, the result has been “green”.

That means that the counter for green would be 3 at this point.

Now let’s say the node queries the network again, and the result is “red”.

In the previous iteration (Snowflake), the counter would reset to 0, and the node would change to red.

In this iteration (Snowball), the counter for green would stay at 3.

The counter for red would increase from 0 to 1.

And the node would not change to red– it would stay green. This is because green has a higher confidence than red (green’s confidence counter is at 3, and red’s confidence is only at 1).

Note: A positive result is referred to as a chit. So in this example, green has 3 chits, and red has 1 chit.

Quick recap: in order for a node to change its color when using Snowball Consensus, 2 things need to happen.

Snowman++ And Avalanche Consensus

So now we have an understanding of Snowman.

Snowman is the final “building block” so to speak, but is not the final form of the consensus protocols being used by Avalanche today.

The 2 “final forms” that are publicly deployed on the Avalanche Network are known as Snowman++ and Avalanche Consensus.

These 2 protocols are basically just modified, or optimized versions of Snowman.

DAG Vs Blockchain

In order to understand Snowman++ and Avalanche Consensus, we first need to understand the differences between a blockchain and a DAG.

Blockchain

I’m sure most of you already know this, but a blockchain is quite literally a “chain of blocks”.

A bunch of transactions are grouped into a batch, also known as a “block”.

That block is then processed by the network, usually by using Nakamoto Consensus to determine if the transactions in the block are valid.

If the block is accepted by the other nodes on the network, it is added to a ledger that contains every single previous block.

Every single block, meaning all transactions since that blockchain was created.

This process is done in what’s known as a linear fashion.

Linear just means that things happen in a specific order.

One block of transactions is processed, added to the blockchain, and then the network can move on with processing the next batch of transactions.

The problem is, this linear approach is not necessary when dealing with a simple payment system like Bitcoin uses.

It’s a very inefficient method that isn’t scalable to a large user base.

This is where the concept of a DAG comes into play.

DAG

DAG stands for Directed Acyclic Graph.

A DAG is somewhat similar to a blockchain, since it does maintain a partial ordering of transactions.

Keyword here being “partial”. A partial order of operations is still needed for a financial network, but there are some transactions that can happen simultaneously without compromising security.

This greatly increases scalability and speed, since multiple batches of transactions can be processed at once (unlike with a blockchain).

Let’s talk a bit more about how partial ordering works.

In the diagram above, transaction A is the oldest transaction.

After A took place, B and C were executed.

Finally, D took place… and so on.

There is some order here, just like with a blockchain.

We know that A needed to happen before B and C.

B and C needed to happen before D.

But there is no way for us to tell if B happened before C, or vice versa.

That’s because in this case, it doesn’t matter.

A DAG is able to save time by simultaneously handling these, whereas with a blockchain, it would have to be done in absolute order (first A, then B, then C, then D).

You may have noticed in the “Linear Model” photo of how a blockchain works, that each block has exactly 1 parent and 1 child (except for the Genesis block).

With a DAG, there are 2 more concepts that are introduced- ancestors and descendants.

In the diagram above, the very first transaction that took place, was transaction A.

Since A is directly connected to B and C, that makes A the parent of B and C.

Similarly, B and C would be the parents of D.

Since there is no arrow (aka ‘edge’) going directly from A to D, that means A is not a parent of D.

However, A is an ancestor of D, because transactions B and C both directly link A and D to each other.

This also works vice versa- D is a descendant of A.

Here’s why this is important.

Remember the “chit” (confidence counter) thing that we talked about before?

When a node queries a set of other nodes, it gives a “chit” to the transaction that was chosen by the other nodes… that thing?

Well in a DAG, a transaction getting a chit also means that all of its ancestors get another chit.

So in the DAG diagram above, transactions E and F are the most recent transactions.

Let’s say that the network agrees that transaction E is a valid transaction. Not only will E get a chit, but so will all of its ancestors (A, B, C and D).

Basically, every time a new transaction gets a chit, the entire DAG gains some more “confidence”.

Avalanche Consensus

Alright, so take the Snowman Consensus that I mentioned earlier.

Then combine that with the DAG structure we just talked about. That is basically what Avalanche Consensus is.

There’s way more to it than that, and there’s a lot more that I didn’t cover (for instance, how conflicting transactions are handled). But I think that covers the basics… my main goal here was to help you understand the consensus model without going too in-depth.

If you’d like to learn more about the consensus mechanism, you can check out any of Avalanche’s 4 whitepapers or their documentation.

Snowman ++

The other active consensus protocol being used by Avalanche is Snowman++.

Snowman++ is the non-DAG (blockchain) version of Avalanche Consensus.

Essentially, it’s Snowman with some optimizations that make it much more efficient and safe than it was previously.

If you’d like to read more about these optimizations, you can check out this Medium article from Avalanche.

“But Mike, what do you mean there are TWO consensus protocols?! How can one blockchain have 2 different consensus mechanisms, Mr. Mikey?!! Ser???”

Oh, did I forget to mention that Avalanche is made up of 3 different blockchains? Yeah, I told you this thing was complicated.

Don’t worry, consensus was by far the most complicated part. If you made it past that, then the rest of this will be a cakewalk.

Avalanche's 3 Chains: P-Chain, C-Chain and X-Chain

Let’s talk more about the 3 chains that make up the Avalanche Network.

These would be the P-Chain, the C-Chain and the X-Chain.

These chains are interoperable with one another, but they are completely separate.

I’ll talk more about how each of these work.

C-Chain

The C-Chain is short for “Contract Chain”. This is because the C-Chain is the one with the smart contracts built on it.

This is a direct copy of Ethereum’s code… it uses the EVM (Ethereum Virtual Machine).

Since the C-Chain is a clone of Ethereum, applications can easily be imported from Ethereum to Avalanche.

The C-Chain is where you will be doing all of your DeFi stuff. This is the chain with all of the decentralized exchanges, games, NFT marketplaces, etc.

We will talk more about these different dApps in a bit. For now, I just want to get you familiar with the concepts of the 3 different chains.

The C-Chain uses Snowman++ for consensus. This is because smart contracts require absolute order of operations.

Due to this fact, a DAG is not suitable for the C-Chain.

P-Chain

The P-Chain is short for “Platform Chain”. This chain also uses the Snowman++ Protocol for consensus.

That’s because the P-Chain stores information about the validators of the network, which requires keeping track of time.

Since a DAG is not able to accurately deal with the concept of time, the P-Chain requires a blockchain, as opposed to a DAG.

The P-Chain is also where you’ll need to move your AVAX tokens if you want to stake them.

Staking is done by either delegating your tokens to a validator of the network, or becoming a validator yourself.

We will talk more about staking and validation shortly, but again… I just want to give you a basic understanding of the 3 chains first.

X-Chain

The X-Chain is used for something called “Atomic Swaps”.

Basically, it lets you transfer assets between the P-Chain and the C-Chain.

It works almost as a “bridge” so you can move AVAX from chain to chain, but you can also keep assets ON the X-Chain as well.

Since the X-Chain does not deal with any smart contracts, and does not need to understand the concept of “time”, this is the chain that uses Avalanche Consensus.

In case you forgot already, that means it uses a DAG instead of a blockchain.

The X-Chain boasts an impressive throughtput of about 4,500 transactions per second.

If you want to learn how to use the X-Chain to transfer assets between the other chains, I will be covering that later in the “Tutorials” section.

Custom Blockchains

So the 3 chains that I just mentioned are the core part of the Avalanche ecosystem. They are referred to as the “Primary Network”.

But here’s where things get even more interesting (and scalable).

Anyone out there can create their own blockchain using Avalanche.

This blockchain can be public or private, and can be customized to your liking.

For example, you can make it a clone of the Ethereum blockchain by using the EVM (Ethereum Virtual Machine).

Or, you can design your own virtual machine template and have your blockchain run that virtual machine instead.

A virtual machine is basically just a “template” for a blockchain.

So you can design this template any way you want, by creating your own virtual machine… or, you can just “run” an existing one, like the Ethereum Virtual Machine.

Let’s use an example here- we’ll pretend that you have a dApp with a very large user base.

Well, maybe you don’t want to compete with everyone else for network resources because it will slow things down and cause a bad user experience for everyone.

With Avalanche, you have the ability to launch your own blockchain that your dApp can run on by itself.

These custom blockchains are often referred to as “subnets”, which is… slightly incorrect. I will elaborate on that shortly.

First, we need to talk about how Avalanche is validated.

Network Validation

Alright, we talked about consensus already. So you understand how nodes come to an agreement with each other.

But, how do these nodes actually work? Do they use “mining” like Bitcoin and Ethereum?

Not quite. Avalanche uses a POS (Proof Of Stake) algorithm to reward validators for securing the network.

In order to become a validator on Avalanche, you must stake at least 2,000 $AVAX tokens.

You can stake for any amount of time between 2 weeks and 1 year.

After that period is up, you will need to re-stake if you want to continue being a validator.

We will talk more about how to actually do this in a bit, but for now, I just want to you to understand how it all works.

Delegation

If you don’t want to become a validator and/or you don’t have 2,000 AVAX to spare, you can still earn rewards by delegating your AVAX to a validator.

The minimum delegation amount is 25 AVAX, and has the same staking period (between 2 weeks and 1 year).

I will show you how to actually delegate tokens shortly.

Subnets

Anyone who wants to be a validator for any part of the Avalanche ecosystem, is required to validate all 3 of the Primary Chains.

But what about those custom blockchain things we talked about earlier? Who validates those?

Well, that’s up to the person who creates that blockchain.

If you want to launch your own blockchain on Avalanche, you will need to find a group of validators to… validate that blockchain.

You can either set up your own group of validators, or you can try to convince some existing validators to help secure your network.

The group of validators who secures your custom blockchain is known as a subnet.

You can customize this subnet in many ways- for example, you can require all members to live in a certain jurisdiction.

Or, you can only allow members to join the subnet if they sign a legally binding contract in the real world, etc.

Keep in mind that any members of your subnet are still required to validate all 3 chains on the Primary Network. Therefore, they are subject to the same requirements as any other validator (2000 AVAX commitment, for example).

Any validator can be a member of as many subnets as they like, and any subnet can validate as many blockchains as they like.

This is why I mentioned earlier that people are technically incorrect when they refer to a custom blockchain as a subnet.

A custom blockchain requires a subnet, but the blockchain itself is not a subnet- a blockchain is a blockchain, and a subnet is a group of validators who handle transactions.

Node Types

Not every node on the network needs to keep a full history of all transactions on the network.

However, all nodes are required to stake the same 2,000 AVAX regardless of which type of node they are.

Avalanche offers 2 types of nodes- archival nodes, and full nodes.

Note: The whitepaper mentions a 3rd type of node called a “light client”, but from my understanding, that is not something that currently exists. I may be wrong but this is what I was told when I asked about it.

Archival Node

The first type of node we will discuss, is called an archival node.

Archival nodes keep a full history of every single transaction that ever took place on Avalanche, all the way back to the Genesis transaction (first one ever).

These nodes keep track of staking information, subnets, smart contract info, etc.

An archival node can obviously validate transactions, since it has a record of everything that ever happened on the network.

On top of keeping the full history, these nodes also keep state records.

Don’t understand what that means?

Well, if you know what a snapshot is, then that is essentially the same thing as a state.

Let’s just use a hypothetical example here-

Imagine you launch a new token, and you want to give an airdrop to anyone who was holding more than 10 AVAX on November 5, 2021.

An archival node already has a list of all people who qualify for that airdrop. All you need to do is ask for it (using something called an API).

That is because the state record knows what the exact wallet balances were at that point in history.

However, let’s say that a node had a full history of all transactions on Avalanche, but didn’t have the state records saved.

That node could still give you the same information, but it would require way more work.

The node would have to go back in time and scan all the transactions that were ever made, and do a bunch of calculations to determine what the balances of each wallet were on that particular day.

This would tie up a ton of resources, and probably end up being very expensive.

That’s one of the many reasons that an archival node can be extremely valuable.

Full Node

Next, we have the full node.

Full nodes keep a record of the current state of the network (balances, etc).

They also have the option to keep the entire history of all transactions on Avalanche.

History, but not state.

These nodes can also validate transactions since they have enough information to confirm whether or not a certain address has the proper funds in it to execute a specific transaction.

Pruned Node

Avalanche also has what’s referred to as a “pruned node”.

I mentioned that there are 2 types of nodes, not 3… that’s because a pruned node technically falls into the same category as a full node.

The only difference is, this version prunes (or gets rid of) unnecessary transaction information from time to time.

Due to the nature of Avalanche’s consensus mechanism, nodes are able to remove older (i.e. very high confidence) transactions without compromising security.

This is in contrast to networks like Bitcoin and Ethereum, where removing old history from your node would compromise the security of the network.

Tokenomics

Alright, I think we covered enough of the tech at this point.

Let’s discuss some tokenomics, and then we’ll move on to the actual tutorials so you can learn how to use Avalanche.

AVAX Token Price And Supply Info

Avalanche’s AVAX token is currently sitting at rank #11 on CoinGecko, with a price of $85 and a market cap of $22.9B.

The circulating supply is 267.2M, with a max supply of 720M.

360M AVAX were minted at the Genesis block, but some of those are locked up/vested and will be unlocked as time goes by.

The total supply when you account for the locked tokens, is about 380M.

Validators on the network also earn up to 11% staking rewards, with an average of about 9.5%.

I say “average” because there is an extra incentive for people who stake for the full 1 year period.

In other words, you get a higher APR if you stake for the full year.

Anyway, the point is that the AVAX inflation rate is around 10% from staking, if you don’t account for token burns.

There are a few sources of token burns:

If you take all of these burning mechanisms into account, one could theoretically assume that the AVAX token is or will eventually be deflationary.

Governance

Aside from being used for the reasons mentioned above, AVAX is also a governance token.

Users who hold the token are able to make decisions such as:

Tutorials

Alright, we’re finally at the part where we get to start doing stuff.

How To Set Up A Web Wallet

In order to use the X-Chain or the P-Chain, you will need the Avalanche Web Wallet.

I will show you how to do this without a hardware wallet, and then I will also demonstrate with a Ledger Wallet.

Without A Hardware Wallet

Head on over to wallet.avax.network, and you will see this screen.

Click on the “Create New Wallet” button.

You should land on the following screen.

Click on “Generate Key Phrase”, which will take you to the following screen.

As you can see, I’ve covered up my seed phrase here.

But underneath all those red boxes are a bunch of words. Make sure you save yours in multiple safe places, because without them, you will not be able to access your wallet in the future.

Once you have your seed phrase saved in a safe place, confirm that you have “wrote down your key phrase in a secure location”, and then click “Access Wallet”.

After clicking “Access Wallet”, you will be asked to verify your seed phrase.

After filling out the form, click the “Verify” button. You should land on a “Congratulations” screen.

Your wallet is now created. I will talk more about using the wallet shortly, but first let me show you how to use your Ledger Hardware Wallet with the Avalanche Web Wallet.

Avalanche Web Wallet With A Ledger Hardware Wallet

Before you can use your Ledger Wallet with the Avalanche Web Wallet, you’ll need to install the Avalanche app on your Ledger.

If you don’t already have Ledger Live installed on your computer, head on over to Ledger.com and download it.

Open the Ledger Live program on your computer.

When you open Ledger Live, if you see a message that says “A new version of Ledger Live is available“, then make sure you update to the latest version.

Once you have confirmed that you are using the latest version of Ledger Live, go to the “Manager” tab.

Make sure that the firmware on your device is up to date before proceeding.

If your Ledger Live software and your hardware wallet’s firmware are both up to date, then you are ready to install the Avalanche app.

Type “Avalanche” in the search box, and then click the “Install” button.

Now that you have the Avalanche app installed on your Ledger wallet, you are ready to use it with the Avalanche Web Wallet.

Head on over to wallet.avax.network.

Make sure you have your Ledger connected to your computer and unlocked, with the Avalanche app opened.

Next, click “Access Wallet”.

On the following screen, you will be asked what method you would like to access your wallet with.

Choose “Ledger”.

You will be asked to confirm 2 transactions on your hardware wallet.

These transactions are basically just giving Avalanche Web Wallet permission to access your public keys.

Once you successfully complete this step, your wallet should open up.

What To Do After Your Web Wallet Is Set Up

After your web wallet is set up, you can use it for all 3 of the Primary Chains (X-Chain, C-Chain, and P-Chain).

You can also use it to transfer funds between the 3 chains. So for example, if you have funds on the X-Chain and want to send them to the C-Chain, you can do that right inside the “Cross Chain” section of the web wallet.

Using MetaMask With The Avalanche C-Chain

You just learned how to set up the Avalanche Web Wallet, which works with all 3 of the Primary Chains.

So why should you care about MetaMask?

Easy. If you want to interact with dApps on Avalanche, you’ll need MetaMask.

Luckily, I’ve already created a guide for that.

That guide shows you how to install MetaMask and connect it to the Avalanche C-Chain.

However, there are a couple of things you’ll need to do differently, if you want your MetaMask wallet to have the same address as your Avalanche Web Wallet.

If You Aren't Using A Hardware Wallet

If you’re not using a hardware wallet, then here’s what you need to do.

Install a fresh copy of MetaMask on your browser.

This means you may need to delete MetaMask and re-install it if you’ve already got MetaMask installed.

Once you have a fresh copy of MetaMask installed, click “Import Wallet”.

Next, you need to make sure you select “I have a 24-word phrase” from the drop-down menu.

Make sure to use the same 24-word seed phrase that you got when you set up your Avalanche Web Wallet.

If you still need help after this step, everything else is explained in my MetaMask tutorial.

Once you have this wallet set up, your MetaMask address will be indentical to your Avalanche C-Chain address.

If You're Using A Ledger Hardware Wallet

If you’re using a Ledger, then by default, your MetaMask address should be the same as the C-Chain address in your Avalanche Web Wallet.

However, if it’s not, here’s the most likely reason.

Avalanche Web Wallet uses Ledger Live path 1.

Here’s how to make sure your MetaMask is using the same path.

Open up MetaMask and click “Connect Hardware Wallet”.

Once the list of addresses pops up, make sure you have Ledger Live selected in the drop down menu.

Also, make sure to select address #1 from the list. This address should be identical to your C-Chain address in Avalanche Web Wallet.

Getting Funds Into Your Avalanche Wallet

Now that you have your wallet set up on all 3 of the Primary Chains, you’re ready to start using the network.

For this, you will need some AVAX tokens.

There are 2 main ways you can go about this- withdrawing AVAX from an exchange, and using the Avalanche Bridge.

I will demonstrate each method.

Getting AVAX From An Exchange

If you want to buy AVAX on an exchange, you can find a list of exchanges on Avalanche’s CoinGecko page.

I’m not going to tell you what exchange you should use, as that’s totally up to you. And also, the jurisdiction you live in will determine what exchange you can actually use.

The important part is how to get AVAX into your wallet after buying it on an exchange.

When you go to make a withdrawal, you will be asked which chain you want to withdraw to.

Typically, you will be given 2 options- the C-Chain or the X-Chain.

You’ll notice in the picture above, that you don’t see an option for X-Chain. Well, actually you do… the Avalanche Chain is the X-Chain.

So if the exchange you are withdrawing from says “Avalanche Chain”, that is just another way of saying “X-Chain”.

Make sure to withdraw to the correct address for the chain you are withdrawing to (your wallet addresses are different on each chain).

Using The Avalanche Bridge

If you already have some funds on the Ethereum network, you can also use the Avalanche Bridge to transfer those funds to the Avalanche C-Chain.

Head on over to bridge.avax.network and make sure your MetaMask is connected to the Ethereum Mainnet.

Log in to the bridge with MetaMask.

Once you’re logged into the Avalanche Bridge, you will land on the following screen:

There are 3 important points that I want you to notice in the example above.

When you send assets across the Avalanche Bridge, you receive a “bridged” version of that asset. Bridged assets have “.e” at the end of them. So if you send USDC from ETH to Avalanche, you will receive USDC.e in exchange.

These “.e” assets can be used on Avalanche just like any other asset.

But, if for some special reason, you need the native version of a token (USDC for example, instead of USDC.e), here’s how you can get it.

Go to OpenOcean and swap your .e asset for the native asset. That’s all there is to it.

I Sent Tokens From ETH To Avalanche, But They Aren't Showing Up In MetaMask!

You need to make sure you add the contract address of that token to MetaMask.

If you sent ETH across the bridge for example, then you will receive WETH.e on Avalanche.

That means that the ETH contract address is not going to help you on Avalanche- you need to add the WETH.e contract address.

You can find a full list of contract addresses for Avalanche Bridge tokens on Github.

Don’t know how to add a contract address to MetaMask?

Check out my MetaMask Tutorial where I show you exactly how to do that.

Adding contract addresses is under section 7 on the table of contents.

Still having issues with the bridge? Avalanche has a pretty extensive FAQ in their documentation. I highly suggest checking it out, your question is most likely answered there.

How To Send Funds From Chain To Chain (Atomic Swaps)

Using the Avalanche Web Wallet, you are able to transfer funds between the 3 Primary Chains.

Log in to your Avalanche Web Wallet.

Then, click on the “Cross Chain” tab on the left hand side.

The Cross Chain swap page should look like this:

You will need to fill out a few details:

In this example, I have selected the X-Chain as the Source Chain, and the P-Chain as the Destination Chain.

You will also notice that the “Fee” section tells us that there is a 0.001 AVAX fee to export tokens from the X-Chain, and a 0.001 AVAX fee to import tokens to the P-Chain.

Totaling 0.002 AVAX in fees.

However, watch what happens if I choose the C-Chain as either the Source or Destination chain.

You’ll notice that the total fee has gone up by almost 50%.

This is because the C-Chain uses a dynamic fee model, meaning that it changes (based on supply and demand).

So keep that in mind and plan accordingly.

For example, let’s say you bought some AVAX on an exchange, and you plan on getting that AVAX to the P-Chain.

Your best bet would be to withdraw from the exchange to the X-Chain (instead of the C-Chain).

Then use the Avalanche Web Wallet to move that AVAX from the X-Chain to the P-Chain.

This would be cheaper than sending from the C-Chain to the P-Chain.

If you want more info about Avalanche fees, they have a full breakdown of fees in their documentation.

Anyway, once you have filled out all the details, click the “Confirm” button and confirm the transaction.

Once the transaction is confirmed, you should see your AVAX on the chain that you sent it to.

How To Stake AVAX Tokens

There are many different dApps on Avalanche where you can yield farm and stake tokens, etc.

In this section, we are not focusing on any of that.

We are focusing on native staking– in other words, becoming a validator or a delegator.

What You Need To Know

How To Delegate Your AVAX Tokens

Once you have at least 25.001 AVAX on the P-Chain, navigate to the “Earn” tab in the Avalanche Web Wallet.

Then click on the “Add Delegator” button.

Once you click “Add Delegator”, you will see a list of active validators that you can choose from.

Source: https://docs.avax.network/build/tutorials/nodes-and-staking/staking-avax-by-validating-or-delegating-with-the-avalanche-wallet/

Select a validator, then enter the following information:

Note: your staking period has to end before the validator’s staking period ends.

So if your validator’s “End Time” is in 2 months, then you can only delegate to them for 2 months.

Make sure to be aware of the validator’s End Time when you select your validator.

Once you have a validator chosen and have filled out the required information, click the “Confirm” button and submit the transaction.

If it worked properly, you should see a message that says “You are now delegating“.

Becoming A Validator

The process of becoming a validator is pretty similar, but requires a few more technical steps.

This process is a bit beyond the scope of this article, but if you want to learn more, here is a step by step guide directly from the Avalanche documentation.

How To Wrap And Unwrap AVAX

For some dApps, you will not be able to use regular AVAX tokens for interacting with certain smart contracts.

In these cases, you will need Wrapped AVAX (wAVAX).

You can convert AVAX into Wrapped AVAX by using OpenOcean.

AVAX and wAVAX are always exchangeable at a 1:1 rate (you will need to pay a transaction fee, though).

You can also use OpenOcean to unwrap your AVAX as well.

Block Explorers

Need to check the status of a transaction, or do some blockchain detective work?

Here are some resources that you can use.

Snowtrace

Snowtrace.io is an Avalanche C-Chain explorer.

It’s basically the Avalanche version of Etherscan.

You can also use their Gas Tracker to determine the current gas fees that you should use.

Avalanche Explorer

The Avalanche Explorer is the most thorough block explorer that you will find on Avalanche.

Here, you can find information about all 3 of the Primary Chains.

You can also find information about Subnets, custom blockchains, validators, Avalanche tokens, etc.

AvaScan

AvaScan also has a lot of useful info.

It’s pretty much the same info that you’ll find on the Avalanche Explorer, so it’s really just personal preference which UI you like better.

DApps On Avalanche

7000 words later… I guess we can talk about dApps now 😂

There are way too many dApps on Avalanche to cover them all, but I will cover some popular and/or interesting ones.

Keep in mind, all this dApp stuff takes place on the C-Chain (in case you forgot).

Crabada

Crabada is a play-to-earn game where you can assemble teams of NFT characters to battle against one another.

Each of these crabs is an NFT, and Crabada has their own NFT marketplace where you can buy and sell them.

They also have their own Avalanche token called CRA, and an in-game currency called TUS.

Users can stake their CRA tokens to earn special perks in the game.

There is much more to Crabada than that, but since there are so many dApps on Avalanche, I would like to keep this moving.

If you want to learn more about Crabada, check out their website for more info.

Pangolin

Pangolin is a decentralized exchange where users can swap Avalanche assets using liquidity pools.

They have a governance token called PNG, which can be used to influence the direction of the project.

Pangolin also has farms where users can deposit LP tokens, and earn yield on those tokens.

There is also a single-staking pool where users can stake their PNG tokens and earn PNG. This pool current offers 6% APR.

If you want to check out Pangolin, head on over to pangolin.exchange.

BENQI

BENQI is a project that I find very interesting.

Ever heard of AAVE before? That lending and borrowing platform where you can earn interest by giving out decentralized loans, or take collateralized loans on your crypto…

Well, BENQI has that too, and their current supplied liquidity is almost $2.5B.

They also have a really cool feature called “Liquid Staking”.

You stake your AVAX tokens and earn 7% APR.

That isn’t much, but here’s the cool part- while your AVAX is locked up, you get a token called sAVAX (staked AVAX).

You can use this sAVAX token to make other investments while still earning that 7%.

Basically, you can stake but also still have the liquid capital at the same time.

Hence, Liquid Staking.

BENQI also has a token called QI, which currently has a market cap of around $100M, with a fully diluted cap of over $400M.

I need to do some more research on where those other tokens are. At $100M, this seems like something I might throw a few bucks at.

Not sure if I feel the same about $400M though.

If you want to check out BENQI, head on over to benqi.fi and have a blast.

Avalaunch

Avalaunch is a decentralized fundraising dApp where projects can raise funds from Avalanche users.

Users who want to invest in projects on Avalaunch, will need to complete KYC verification and register their wallet with the platform.

Unfortunately, there’s also this…

Welcome to the land of the free, where your government protects you from those evil 160x gains!

I digress.

You will also need to stake their native token XAVA to get an allocation in IDOs.

If you don’t want to KYC or invest in any IDOs, you can still stake XAVA tokens to earn interest.

Here’s a project that launched their IDO on Avalaunch less than 24 hours before I wrote this…

As you can see, they’ve already almost sold out. They’ve raised $857k so far out of the $1.1M target amount.

So this isn’t ‘just another launchpad’, this thing actually has some users.

You can check out Avalaunch at avalaunch.app.

Trader Joe

Trader Joe is currently the most popular decentralized exchange on Avalanche.

They offer everything from swapping, to farming, to lending and more.

According to Snowtrace, they are the 2nd biggest gas guzzler on Avalanche.

Only Crabada consumes more gas than Trader Joe.

Something something, lots of adoption.

Joey also has his own launchpad for projects looking to raise funds.

Here’s one feature I really like about Trader Joe- the Zap feature.

Buying LP tokens can be a nightmare sometimes, so they give you an option to use a single token to buy an LP token.

If we’re being completely honest here, users would probably still be better off getting LP tokens the old fashioned way.

It allows you more control over what’s happening, but I still think this is a really cool feature for people who don’t want to go through the hassle of making 873 transactions just to get an LP token.

Trader Joe also has their own JOE token, and according to CoinGecko, they have over $1.4B in Total Value Locked.

Worthy Mentions

There are so many dApps on Avalanche that it would take years to cover them all.

I think it’s worth mentioning a few names that started on other blockchains, and then integrated Avalanche into their products.

Some pretty big names there.

If you want to see a full list of the Avalanche ecosystem, you can do that on their website.

Avalanche News

What’s going on with Avalanche these days?

Let’s talk about some recent news.

Bitcoin Bridge

Avalanche recently announced that they will be adding Bitcoin to the list of supported networks on the Avalanche Bridge.

This means that Bitcoin holders will be able to transfer their Bitcoin directly to the Avalanche Network, and use it within their ecosystem.

Up until now, Ethereum has been the only network that was supported by the Avalanche Bridge.

By adding the largest asset in crypto to their network, Avalanche is unlocking the potential for 1 trillion dollars worth of capital to flow into their ecosystem.

This is expected to launch in Q2 of 2022.

If you want to read more about this, you can check out their Medium article where they made the announcement.

Core Wallet

Up until now, MetaMask has been the only option for Avalanche users to interact with dApps.

Well, Ava Labs just announced that they are launching a new browser extension and mobile wallet called Core.

Core is going to have some very exciting features, including:

As you can see, this Core Wallet is like a better, Avalanche-tailored version of MetaMask.

The browser extension is expected to launch any day now (before the end of March), and the mobile wallet is expected to launch in early Q2.

You can read more about this on the Avalanche Medium article.

$100M Creator Fund With Op3n

Avalanche has collaborated with a web3 social media called “Op3n”, to reward $100M in AVAX tokens to people who build products on the Avalanche platform.

The first grant from this initiative will go to a singer named Grimes, who plans to build a “children’s metaverse book” on Avalanche.

You can read more about this in the announcement article on The Block.

Conclusion

I would love to keep going but unfortunately I will be here all year if I try to expain every single piece of the Avalanche puzzle.

Hopefully you learned something valuable from this article.

If you did, don’t forget to make sure you’re subscribed for future reviews and tutorials.

And if you have any other questions, feel free to drop a comment on the video and I’ll try my best to help.

Thank you for reading, see you next time. Peace out.