Dialogue Avalanche: The Landscape and Future of Public Chains in the "Consensus 3.0" Era

Avalanche is a recently popular public chain project, with rapid ecological development, forming a strong competition against Ethereum alongside other public chains like Solana and Fantom.

This time, Wilson, the head of Avalanche (Avalanche Protocol) for the Asia-Pacific region, shared insights on Avalanche's competitive advantages, ecological expansion, and trends in the public chain landscape, offering depth and inspiration.

Chain Catcher: Please briefly introduce the development history and team background of Avalanche.

Wilson: Avalanche was co-founded in 2019 by Emin Gün Sirer, a professor at Cornell University and co-founder of IC3, computer scientist Kevin Sekniqi, and Ted Yin, the first author of the HotStuff consensus protocol for Facebook Libra. The mainnet officially launched on September 22, 2020.

Professor Gün is not only an academic and researcher but also a typical geek and a pioneer in cryptography. In 2001, he developed the Karma virtual currency system, which was the first network to utilize the PoW (Proof of Work) mechanism. As of now, the paper published at that time is also the most cited.

Founders BD VP Lydia C and John Wu come from Sureview Capital/Sego, an investment firm focused on technology and alternative investments, which has received strategic investment from Blackstone Group and participated in two IPOs of Thunder Bridge.

In terms of investment, as early as 2019, Avalanche received funding from Andreessen Horowitz, which manages over a billion dollars, as well as investments from Polychain, Coinbase's former CTO Balaji Srinivasan, Metastable, Initialized, and Ramtin Naimi, founder of Abstract Ventures, among others.

Avalanche completed a $12 million private placement round in May 2020, led by five major institutions: Galaxy Digital, Bitmain, Initialized Capital, NGC Ventures, and Dragonfly Capital, with follow-on investments from Continue Capital, Fundamental Labs, SNZ, IOSG Venture, and others. In the public offering round, it raised $42 million.

Chain Catcher: Nowadays, public chains like Ethereum, DOT, BSC, and Heco all have their unique characteristics and markets. What distinguishes Avalanche in comparison?

Wilson: Simply put, Ethereum, as the leading project in the public chain 2.0 era, still has the largest ecosystem globally, but it is constrained by low TPS bottlenecks and high miner fees, resulting in slow speeds and high costs.

Before the implementation of the ETH 2.0 plan, it cannot be compared with the speed of technological updates of later-launched public chains. Its congestion issues will persist for a long time, and even if ETH 2.0 is realized, many original miners and computing power are likely to abandon support for ETH in favor of ETC or fork ETH, leading to significant uncertainties for the future of the ETH ecosystem.

DOT, as one of the star projects launched in 2017, has a perfect cross-chain solution, but its development progress has indeed caused some supporters to lose patience. After fundraising ended in 2018, it took nearly two years to launch. Although the ecosystem is developing rapidly now, the lack of smart contracts has forced many Polkadot ecosystem projects to initially govern on ETH, awaiting migration after launch.

BSC and Heco, two public chains backed by exchanges, also have relatively complete ecosystems, but the drawbacks of lacking cross-chain functionality are very apparent. On-chain assets must go through exchanges to be transferred to other chains, and some code not being open-sourced and historical issues with initial fuel tokens highlight significant centralization. The current situation reflects excessive rewards for early supporters of the ecosystem, while later entrants cannot obtain the resources they deserve, leading to limited development incentives.

These situations contradict the decentralized philosophy and DAO governance model, which require more time to accumulate before gaining technical advantages. Overall, Avalanche is the project with the best comprehensive technical indicators among the aforementioned projects.

Based on Avalanche Protocol Consensus 3.0, it has technically constructed an innovative X, P, C three-chain structure platform, fundamentally addressing TPS bottlenecks and cross-chain issues.

X chain/P chain/C chain, referred to as the transaction chain, governance chain (platform chain), and contract chain, respectively; each serves its purpose internally while forming a united front externally, operating in parallel for speed and efficiency. This makes the Avalanche Protocol not only more decentralized but also remarkably performant, with transaction settlement speeds three times that of centralized VISA networks.

Currently, Avalanche Protocol AVAX has attracted many Ethereum community developers with these advantages, prompting spontaneous recognition of Avalanche Protocol AVAX technology. The comprehensive technical capabilities of AVAX already possess the technological advantages of blockchain 3.0. In this regard, Vitalik Buterin has also praised the underlying technology of Avalanche Protocol AVAX, even comparing it to Bitcoin.

Chain Catcher: Recently, Avalanche has successively supported USDT and launched a $20 million venture fund, making many moves. How will Avalanche continue to expand its ecological landscape?

Wilson: Supporting USDT is just a step towards improving the ecosystem. USDT is currently the most widely used fiat-pegged asset, providing convenience for users in the Avalanche ecosystem. We currently have two ecological funds, one focusing on the Asian market and the other established in the United States. Both funds have extensive communication in terms of investment, and their LPs come from top venture capital firms in various regions.

We will focus on selecting high-quality projects within the Avalanche ecosystem, not only infrastructure and tool projects but also conceptual projects like NFTs. We also have ILOs, underlying editable assets, etc. For projects that have ideas, capabilities, and can contribute to the development of the Avalanche ecosystem, we are willing to provide our resources for support.

We certainly hope to see more star projects emerge in the Avalanche ecosystem, which not only allows supporters of the Avalanche ecosystem to access more excellent investment targets but also lets the outside world feel the advantages of Avalanche's underlying public chain.

Chain Catcher: DeFi, especially the focus of public chain ecosystems, has seen increasingly obvious overflow from Ethereum's DeFi ecosystem. What is Avalanche's approach to building its DeFi ecosystem? Can you introduce the main DeFi projects and their development status in Avalanche?

Wilson: The advantages of Avalanche in the DeFi ecosystem lie in high performance, multifunctionality (high TPS, high scalability, fully decentralized, multi-node), and our large user base.

Cross-chain bridge technology can also be implemented in wallets, with rapid asset transfers from X chain to C chain being more stable and secure compared to some non-GUI wallet transfers in other cross-chain projects, making it the smoothest cross-chain wallet currently available.

The Avalanche Protocol AVAX subsystem C chain and Truffle form a natural cross-chain player in the Avalanche Protocol AVAX ecosystem, currently supporting EVM for all ERC20 smart contracts, perfectly compatible with the Ethereum ecosystem. In the future, we will design our own virtual machine to support smart contracts with off-chain execution and on-chain verification capabilities, executing other types of oracles deployed in different environments flexibly and efficiently.

Being attentive to developers' needs and providing rapid and precise support is another obvious advantage of Avalanche. Currently, there are as many as 300 DeFi applications waiting to be deployed. Although the new batch of DeFi applications is still hidden from end users, we, as users, are also looking forward to the diversity of the future Avalanche Protocol ecosystem.

In the first and second quarters of 2021, Avalanche had a good start: developers gathered, and activity surged. In the second quarter, the focus of the Avalanche Protocol was also to invite more projects to settle in, using immediate user demand as a new attraction, with a dual approach of "improving technology + optimizing experience."

The main DeFi project Pagolin has seen its TVL exceed $100 million. This reflects our ecosystem users' enthusiasm for DeFi. We also hope to see more quality targets emerge in the ecosystem network.

Chain Catcher: NFTs have also become a popular application direction recently. What do you think about the future development prospects of NFTs? What is Avalanche's layout in the NFT field?

Wilson: One reason for the popularity of NFTs is that external business models and some products can leverage the concept and technology of NFTs to upgrade their business and economic systems, increasing liquidity and security of rights. In a bull market, NFTs also meet the market's demand for finding new outlets for emotions and funds.

NFTs are freely transferable and have unique rights, and their current development trend relies more on the support of real-world value behind them. Industries lacking liquidity, difficult to prove rights, and hard to retain historical value, such as identity verification, ticketing, real estate, music, and sports, are quite suitable for the application of NFTs.

At this stage, most NFTs still mainly occur in the digital art field, but some emerging niche markets are also beginning to explore NFTs, including assets in the gaming world and other crypto collectibles. The skyrocketing prices and trading volumes easily evoke thoughts of a bubble.

Objectively speaking, NFT trading and circulation on Ethereum are still relatively cumbersome and come with extremely high minting costs. However, the market has also brought some positive changes, allowing more artists to establish fairer connections with investors and collectors through NFTs, realizing the monetization of their artistic abilities and talents, which are otherwise intangible. Their rights have also been duly protected.

As NFTs continue to break out in a bull market environment, more new possibilities will emerge within the boundaries of NFTs.

The high performance and multi-node nature of the Avalanche network provide a natural soil for NFT development. We launched the NFT STUDIO feature last quarter, allowing our users to easily and quickly create their own NFTs at very low GAS fees. Improving infrastructure is just our first step; we have already reached cooperation with many well-known artists and will launch related applications in this quarter. Specific details need to be kept confidential for now, but we hope everyone will pay close attention.

Chain Catcher: Community consensus is one of the most important development factors for public chains. How will Avalanche enhance community cohesion? What channels are there to expand community users?

Wilson: Unlimited node expansion is a major technical feature of Avalanche. First, our network is not limited to the number of nodes; anyone can become a node and earn rewards through staking. I believe this is a direct way for users to participate in building the Avalanche network.

Secondly, for users who actively participate in community building, we will also provide benefits from time to time, such as whitelists for newly launched ecological projects or airdropped tokens. Currently, many ecological projects are proactively reaching out to us, hoping to collaborate more with the public chain. We will also prioritize our own community as the first option for early project rewards.

There are many channels to expand community users, including media, communities, self-media, social accounts, etc. We hope that users joining the community truly recognize Avalanche's technology and philosophy, allowing us to make a small contribution to changing the world together.

Chain Catcher: The competition in the public chain track is becoming increasingly fierce. What is Avalanche's positioning and goal?

Wilson: On the technical code level, we define ourselves as "Consensus 3.0" because Avalanche has a completely new consensus architecture, thanks to our founder Professor Gun and our co-founder Ted, who have brought Avalanche onto the path of a new generation of public chains with a novel consensus architecture. I believe this is unique.

Our goal is to become an enterprise-level financial application solution. This slogan may sound familiar to many. However, for other public chains, this goal is from 0 to 1, while for Avalanche, it is from 1 to infinity.

Because we have already solved the barriers between blockchain technology and traditional industries from a technical perspective. The high speed, unlimited nodes, and internal collaborative division of labor that the traditional world pursues are all the specialties of Avalanche. This is also why Avalanche can become a government-level partner in regions and countries that embrace blockchain technology more. Currently, we have established partnerships with countries like Turkey and Mexico, and many giants in the U.S. are actively discussing cooperation possibilities with Avalanche.