Avalanche
Layer 1 Protocol, Avalanche Ecosystem
Avalanche is a layer one protocol by Ava Labs that offers high-throughput, fast finality, and unprecedented decentralization.
Developers are able to launch their own public or private blockchains (called subnets), create and trade digital assets, and build scalable smart contracts and decentralized applications.
APY | ~7% |
Total Supply | 720,000,000 |
Compounding | Manual, requires a re-stake |
Compounding Frequency | At the end of the lock up period and re-delegation is required to compound. |
Reward Distribution Period (Payout frequency) | End of lock up period spanning from 2 weeks to 1 year |
Unbonding Period | None (though tokens are locked during staking) |
Delegation Requirements (Min-Max) | min. 25 AVAX |
Validator Self-Bond Requirement | 2000 AVAX |
Inflation | Deflationary based on staking participation |
Figment Validator Address | https://avascan.info/staking/validator/NodeID-GW7CvXwkPFDsfFHrix1SA148NHF5ZnSXs
https://avascan.info/staking/validator/NodeID-CRg2AxBCkLjY6T7oiS7ijrCFsdAVmPNuY |
Recommended Wallet | |
Slashing Penalty | No slashing penalties |
Burn Mechanism | All AVAX fees are burnt, drastically decreasing Avalanche’s supply with higher levels of adoption and also programmatically increasing AVAX’s scarcity |
Validator Diversity | Avalanche has a nakamoto coefficient of 28, which is the most diverse Layer 1 in terms of token validation and thus minimizing validator collusion. |
Unlike other PoS systems, Avalanche does not slash nodes’ stakes if they behave maliciously — they simply do not receive a reward.
- Rewards are generated every block, distributed at the end of the staking timeframe
- There are no slashing penalties
- Inflation is deflationary based on staking participation
- Tokens are locked during the staking period
- A new delegation is required for compounding rewards
For this guide, we will be using the native wallet from Avalanche. This wallet is non-custodial, and requires the user to keep track of their own mnemonic phrase, password, and private key. To learn more about custody and best practices, check out our “What is Custody?” video.
Creating a new wallet will promote you to generate a 24 word key phrase. This is a crucial step of the wallet creation process. Please ensure to backup your 24-word key phrase.
Once you have written down and properly backed up your 24 word key phrase, the Avalanche wallet creator will ask you to confirm a couple of words. Once confirmed, you have officially created a new Avalanche wallet.
Within the wallet interface, navigate over to the wallet address area in the top right corner. To load your Avalanche wallet with some AVAX tokens, simply send over AVAX to your wallet’s X-chain address.
As a note, it is very important to recognize which AVAX chain you are on. For context, there is the X-chain, P-chain, and C-chain. Be sure that when you are sending around your AVAX, you are on the correct chain.
When your funds arrive, they will be on Avalanche's X-chain. In order to stake the tokens, the AVAX tokens need to be on the P-chain. Simply head down to the “Cross Chain'' section on the left menu and transfer your tokens from the X-chain to the P-chain.
Once your AVAX is on the P-chain, you are now ready to stake. Head over to the “Earn” section on the left side menu, and then click “ADD DELEGATION”
Figment Node ID: NodeID-CRg2AxBCkLjY6T7oiS7ijrCFsdAVmPNuY
After clicking “ADD DELEGATION” you will be prompted to select a Node ID. Enter Figment’s Node ID into the search bar, and then click “Select” to delegate your tokens. You will then be prompted to confirm the transaction.
Once confirmed, congratulations! You are now officially staking AVAX tokens using the native avalanche wallet.
There is no decentralized governance on the network. The core team controls network developments and communicates those instructions for node operators to upgrade their infrastructure.
Avalanche’s ecosystem is proliferating rapidly especially within the DeFi space with many leading protocols such as:
BenQi - BenQi is an algorithmic liquidity market that has multiple different DeFi services such as lending, borrowing in which you earn rewards and interest. Ben Qi has also brought Liquidity staking capacities to the AValanche ecosystem with their
Pangolin - The first ever DEX to be built using Avalanche - it allows both avalanche and Ethereum assets to be traded. It is likely to have its own Avalanche subnet in the future.
Trader Joe - The biggest DEX on Avalanche by TVL is Trader Joe. It allows effortless swapping, farming staking and even lending. 0.30% of every Swap fee is given to xJOE stakers (0.05%) and Liquidity Providers (0.25%) which is one of the reasons it’s a community favourite.
Alongside Avalanche’s DeFi apps, it’s subnet space is also proliferating rapidly but specifically it’s gaming and metaverse space:
DeFi Kingdoms
Ascenders
Swimmer Network (for Crabada)
Shrapnel
Ragnarok
What is staking?
On a Proof of Stake blockchain, staking is the act of depositing tokens in order to become a validator; that is, to participate in proposing and attesting to transaction blocks. Anyone with a minimum necessary coin balance can validate transactions and earn staking rewards on these blockchains.
What is the name of the asset being staked?
The native token on Avalanche is called AVAX.
What is the AVAX token used for?
At the base level, the AVAX token will be used for : rewarding validators for validating on the default subnet paying for transaction fees on the default subnet creating a new subnet or blockchain sending an asset to the X-Chain on-chain governance participation
How long does it take to unstake?
You can’t unstake your AVAX tokens. A recipient is required when you submit your initial staking/lock-up period as a delegator or validator. Once the end of your staking period/lock-up period is reached, then rewards are automatically distributed to the recipient address set initially before the lockup.
What are the asset(s) that I earn for staking?
AVAX tokens are rewarded for validating on the “default” subnet. Future subnets may reward validators and stakers in another asset.
How is staking income disbursed?
Validators do not distribute the rewards to delegators as this is done at protocol level by Avalanche in an automated way.
Which wallet has the highest APY to stake from?
What affects future yields?
The reward rate is not a fixed parameter, since token holders can determine the emission rate. The emission rate depends on several factors: the percentage of the total supply staked by the node, the duration of the stake (using a minimum of two weeks and a maximum of one year), node uptime, and node latency. AVAX’s emission rate depends on how much of it is staked. If the staking ratio is only 50%, the supply grows at a slower rate and it will take much longer to reach the 720 million coin hard cap (the staking ratio is currently just below 70%).
Can my staked AVAX be slashed (seized or destroyed)?
There will be no slashing on the default subnet. Avalanche does not slash nodes’ stakes if they behave maliciously — they simply do not receive a reward. That being said, future subnets are able to set their own slashing penalties.
Do I maintain custody of my AVAX tokens?
Who or what controls my staked AVAX token? You maintain custody of your AVAX at all times. There is no bonding or unbonding period.
How are decisions about the Avalanche made and executed?
Avalanche does not have governance. Avalanche is run and controlled by the core team.
Can validators choose to validate on any subnet?
All validators on Avalanche must validate on the “default subnet”. This subnet consists of three chains: Platform Chain – This chain stores the network metadata (i.e., what subnets and blockchains exist, who is validating what, etc.). Exchange Chain – This chain supports asset creation and trading. Contract Chain – This chain is an Ethereum Virtual Machine instance that runs on Avalanche’s Avalanche consensus. Asides this requirement, validators are free to choose which subnets they want to validate on, and they do not have to run multiple nodes to validate on multiple subnets, unless it is a requirement by the subnet.
What is the total supply of the AVAX token?
The total supply of the AVAX token is 720 million.
Last modified 5mo ago