Avalanche

What is Avalanche?

Avalanche protocol is a multi-tiered blockchain model, that enables the launch of customizable independent blockchains. Avalanche positioned itself as a scalability leader by offering a Directed Acyclic Graph (DAG)-like consensus algorithm that enabled high throughput and low latency, allowing thousands of transactions per second.

Avalanche does not provide security, rather it offers a P-Chain that serves as a platform for independent, API-compatible blockchains to connect with a marketplace of credible (surety bonded) validators to run compatible blockchains.

Avalanche also offers a C-Chain, allowing builders to deploy dApps instead of independent blockchains, and an X-Chain, acting as a decentralized exchange for Avalanche compatible tokens.

The P-Chain serves as marketplace for 'validators for hire' who need to buy and stake the subnet token

How does it work?

1. A builder uses the Avalanche SDK to create a blockchain that is API compatible with the X-Chain and P-Chain.

2. A builder typically stakes AVAX on the P-chain - promoting itself as Avalanche compatible to attract 'validators for hire'. In most cases, ‘hired’ validators must stake on both the new chain and the P-Chain layers, providing independent staking collateral for bad behavior on both.

3. Builders are on their own to launch and maintain their chain:

   1. Must have enough locked value to prevent hostile takeovers

   2. Must recruit a diverse validator set to avoid centralization

   3. Must bootstrap an ecosystem from scratch

   4. Must build chain communication features to avoid community isolation

Launching a subnet on Avalanche has all of the problems of launching an independent L1 with more steps.

Pros & Cons of Avalanche Subnets

The good:

• ✅ sovereign and decentralized

• ✅ full value capture

• ✅ scale independently

The bad:

• ❌ slow to market (semi accelerated by the SDK)

• ❌ must keep up with SDK updates

• ❌ have enough capital to ensure network takeovers are expensive - typically requiring fundraising

• ❌ bootstrap their own ecosystem with developer tooling and liquidity paths

• ❌ attract experienced Validators to avoid centralization

• ❌ must build interoperability features to avoid community isolation

• ❌ SDK is complex and intimidating for the new developer

Canopy and Avalanche Comparison

_	CANOPY	Avalanche
Architecture	✅ Peer-to-Peer	➖ Independent L1s
Scaling Method	✅ Every new chain horizontally scales Web3	✅ independently
Builder Sovereignty	✅ Progressive	✅ Full
Ecosystem	❌ New	❌ Small
Long range attack	✅ Proof of Age	❌ No slashing
Builder Difficulty	✅ Quick to market	❌ Slow to market
Builder Economic Security	✅ Immediate	❌ Neglected / typically fundraising or grants required
Builder Framework	➖ Fork & Clone: Golang	❌ Complex with EVM compatibility
Chain Resources	✅ Exponential: Each new chain is additive	✅ Independent
Builder Success	✅ L0 Premium	❌ Typically lower FDV than sovereign L1s
Native Interoperability	✅ Permissionless	➖ Inner-Ecosystem only
Builder Decentralization	✅ Full/Progressive	✅ Full