Avalanche (AVAX)

What is Avalanche and who builds it?

Avalanche is a blockchain network, and AVAX is its native token. Its Primary Network is made of three chains with different jobs: the X-Chain creates and transfers assets, the P-Chain manages validators and new chains, and the C-Chain is an instance of the Ethereum Virtual Machine that supports Solidity contracts.^[4] AVAX is the currency on all three, on mainnet and on the Fuji test network.^[3]

Ava Labs publishes AvalancheGo, the node software whose mainnet settings this profile quotes, together with the builder documentation.^[1][4] The primary sources we checked do not give a mainnet launch date or a founding story, so we date the network from the upgrade schedule in its code instead. If the term EVM is new, read EVM-compatible chains.

How does the Avalanche network work?

Validators secure the Primary Network by staking AVAX; the documentation sets the minimum at 2,000 AVAX.^[3] Holders with less can delegate their AVAX to a validator instead. The mainnet settings in AvalancheGo define the staking rules below.^[1]

For staking in general, see what is staking.

How are new AVAX created?

The mainnet reward settings in AvalancheGo set a supply cap of 720,000,000 AVAX, a minting period of 365 days, and consumption rates between 10% and 12%.^[1] These are the parameters that govern staking rewards. Our sources name them but do not explain the reward formula, so we do not estimate yearly issuance or a reward rate.

On the cost side, the same mainnet settings list a base transaction fee of 1 milliAVAX (0.001 AVAX) and a fee of 10 milliAVAX (0.01 AVAX) to create an asset, alongside a dynamic fee configuration that limits work per block.^[1] Fees are always paid in AVAX.^[3]

What is AVAX used for?

• Fees. Any transaction issued to a blockchain on Avalanche pays a fee in AVAX.^[3]
• Validating. Staking at least 2,000 AVAX lets a node validate the Primary Network.^[3]
• Delegating. Holders can delegate from 25 AVAX.^[1]
• Smart contracts and assets. AVAX is the currency of the C-Chain, where Solidity contracts run, and of the X-Chain, where assets are created and moved.^[3][4]

What are the key dates in Avalanche's history?

These are the mainnet activation times hard-coded in AvalancheGo's upgrade schedule. A further upgrade, Helicon, has no activation date yet.^[2]

What are the specific risks of holding AVAX?

• Centralisation trade-off. A 2022 Bank for International Settlements bulletin argues that newer layer 1 chains, naming Avalanche, gain capacity at the cost of greater centralisation and weaker security.^[5] That is the authors' assessment; see the blockchain trilemma.
• Capital barrier. Running a validator needs at least 2,000 AVAX,^[3] which limits who can take part directly.
• Committed stake. Stake is set for a duration of 14 to 365 days,^[1] so check the period before you commit.
• Frequent rule changes. AvalancheGo lists 14 scheduled mainnet upgrades between March 2021 and November 2025,^[2] each a change to the rules every node must run.
• Custody. Lost or hacked self-custody wallets can mean permanent loss; custodians can be hacked or go bankrupt.^[6]

What mistakes do beginners make with AVAX?

• Mixing up the three chains. The X-, P- and C-Chains have different jobs,^[4] so check which chain a wallet or exchange expects before sending.
• Expecting to validate with a small balance. The validator minimum is 2,000 AVAX; below that you can only delegate, from 25 AVAX.^[1]
• Ignoring the delegation fee. Validators may charge delegators a fee, with a 2% minimum in the mainnet settings.^[1]
• Treating fees as fixed. The mainnet settings include a dynamic fee configuration,^[1] so quoted costs can change. See gas fee.