What is Avalanche? AVAX, subnets and how it works
AVAX is the token of Avalanche, a smart contract blockchain used for fees, staking and governance. Ava Labs launched the network in September 2020.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
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Avalanche runs many separate chains side by side. Its best-known chain, the C-Chain, runs programs written for the Ethereum Virtual Machine.
What is Avalanche used for?
AVAX has three main jobs on Avalanche. Each one ties the token to the network rather than to trading alone.
- Pay network fees. Transactions on Avalanche's main chains cost AVAX, and a subnet can charge its own token instead.
- Secure the network. Validators stake AVAX, and other holders can delegate to a validator.
- Vote on changes. AVAX holders sometimes get a say in proposals about fees and protocol rules.
How does Avalanche work and differ?
Avalanche says validators secure the network through a proof-of-stake consensus protocol. They repeatedly sample small random groups of each other until a block is settled, and projects can run subnets, which are separate blockchains with their own rules and validators.
Who created Avalanche?
Avalanche was created by a team led by Emin Gün Sirer, a computer science professor. The network launched in September 2020. Ava Labs builds and maintains the core software, and the Avalanche Foundation supports the project.
What risks and legal issues exist?
Avalanche carries the risks of a young smart contract platform. Bugs in applications or bridges can drain funds, and a small group of validators can slow a chain. In June 2023, the SEC sued Binance and Coinbase and alleged that many tokens traded there were securities. AVAX was not among the tokens named.
Frequently asked questions
A subnet is a group of validators that runs its own blockchain alongside Avalanche's main network. It can set its own rules and use its own token.
Yes. You lock AVAX to help secure the network, either by running a validator or by delegating to one. It stays locked for a set period.
Often, yes. The C-Chain runs the Ethereum Virtual Machine, so many Ethereum wallets and apps work once you add the network.
The SEC did not name AVAX among the tokens it alleged were securities in its June 2023 Binance and Coinbase lawsuits. That is not a court ruling on its legal status.
