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This guide will explore how to buy Avalanche, the best crypto exchanges that support AVAX tokens, and a brief overview of the Avalanche project and its benefits.
How To Buy Avalanche (AVAX) – Quick Guide
Here is a quick guide to the easiest and safest way to buy Avalanche:
- Select a crypto exchange. While multiple crypto trading platforms have listed Avalanche, users must choose the exchange that conveniently lets them invest in Avalanche.
- Create an account on the exchange. After selecting the trading platform, the user must start the registration process. The registration process is simple. After sign-up, the applicant must provide their KYC details. Providing these details has become essential due to the rising calls to regulate the crypto market.
- Deposit funds in a wallet. Most crypto trading platforms let users invest in crypto via debit/credit card, Bank transfers, Skrill, Neteller and ACH transfers. Long-time investors can also use BTC or Stablecoins (BUSD, USDC, BTC).
- Buy Avalanche. The investors must then search for Avalanche. Clicking on the option will lead them to the Avalanche Investment page. They can then choose the amount they want to invest and finish the transaction. The process will transfer AVAX token(s) to their account.
Where To Buy Avalanche
Avalanche has gained the attention of multiple popular crypto trading platforms owing to its scalability, high transaction speeds, and low transaction fees. Selecting the correct crypto exchange, however, is not easy. There are multiple factors to consider, such as accessibility, support for fiat payment methods, and transaction fees.
It is, therefore, important that the investors prioritize their research based on the factors best suited for their crypto investment requirements. Below are the four best-rated cryptocurrency exchanges to buy AVAX that cover all the newcomers' features and long-time investors need to get started.
Binance listed AVAX on the exchange on 21 September 2020. It is a great option to buy Avalanche through its fiat gateway or with crypto. In fact, it's one of the cheapest ways to buy AXAV, Binance fees are 0.1% which is very competitive in the market. There are incentives to further reduce the fees by staking the platforms' native token or increasing trade volumes over a 30-day period.
Best known for its advanced trading platform and charting features, there is a simple and sophisticated user interface for investors with varying degrees of crypto experience. Simple users can give into simple trading markets and trade their cryptocurrencies. However, users who seek a more analytical view of the AVAX against BTC or USDT can use the comprehensive features to make more informed decisions about their investment.
Coinbase is the leading cryptocurrency exchange in the United States and globally across 190 countries. Avalanche became available on Coinbase on 30 September 2021 for its users to buy, trade, store and sell AXAV tokens. For beginners who are looking to buy AVAX safely and with peace of mind, Coinbase is a great option with its minimalistic design and strict compliance with regulations.
As for the trading fees, Coinbase has a tiered fee system that starts at 0.5% per transaction. The fees gradually with higher trading volumes make it a cost-effective exchange for beginners and experienced investors alike to invest in AVAX. Coinbase is also one of the safest altcoin exchanges to purchase other tokens like Avalanche.
Read the full Coinbase review.
eToro provides an affordable way to invest in crypto via fiat currencies which listed Avalanche on its platform in February 2022. There are no charges for depositing amounts via fiat mode. Furthermore, to start investing in AVAX, investors in the UK and US can deposit as little as $10 to make an Avalanche purchase.
eToro uses a spread-only (+1%) fee for every successful trade. It means that the trading fee is equal to the difference between the current sale and purchase price of the cryptocurrency. While slightly more expensive, eToro is packed with features that might be of interest to AVAX investors.
Read the full eToro crypto review.
Is Avalanche A Good Investment?
The current market for Avalanche is bearish. However, the start of 2023 has been in decline for most cryptocurrencies. Experts have said that AVAX holds value as a long-term crypto investment. However, the fall of TerraUST might have a more profound impact on the token price in the coming months. For those willing to buy the dip, patience is important, and potential investors must conduct their own research before deciding to buy the altcoin.
Avalanche Price Prediction
Investors are afraid the LFG – Luna Foundation Guard, an entity that protects UST's dollar peg, will start dumping its AVAX holding because it has wasted its BTC reserve to re-peg UST. This bearish sentiment is a sharp contrast to previous months when AVAX announced nearly 1 billion in Bitcoin to its UST reserves.
However, the crypto market has been in disarray since the beginning of 2022 due to multiple reasons. Many cryptocurrencies are following the same downward trend. So, it would not be fair to blame Avalanche for the current dips. Also, Avalanche founders have tweeted that Luna Foundation Guard has no plans for selling the 2 million AVAX it is currently holding. Many experts see TerraUST's failure as a lesson for Avalanche. Despite this, they still believe in AVAX's value as a long-term investment and have predicted the price will be near $940 by 2026.
What Is Avalanche?
Avalanche was founded in 2018 by Computer Scientist and Cornell professor Amin Gun Sirer. Ava Labs, a for-profit software company in the United States, collaborated with the professor for its creation, and the Avalanche Foundation coordinated the development of the Avalanche blockchain. The foundation is a non-profit organization whose location is still shrouded in mystery.
Avalanche has raised more than 230 million via token sales and continues to do so this year. Although the Avalanche Mainnet went live in September 2020, the Blockchain is continuously evolving and is technically still in development.
Similar to Ethereum, the native crypto asset of Avalanche is responsible for all of its operations. Moreover, Avalanche uses a customized version of EVM – Ethereum Virtual Machine – to develop its Dapps. But there are many EVM-based blockchains in the market, so what makes Avalanche unique? Its architecture, consensus protocols, and scalability.
To provide an overview of how the Avalanche works, the AVAX blockchain network entails three components:
- X chain is The exchange chain where tokens are issued, including AVAX. The X chain uses DAG – Directed Acyclic Graph – to run Avalanche's consensus protocol and AVM (Avalanche Virtual Machine). Considered to be the main chain of Avalanche, the X chain can process 4.5k TPS.
- P Chain is the Platform chain Avalanche where validators stake AVAX to secure the network. This chain makes creating custom blockchain – subnets – possible using the validators. It is a standard blockchain that runs the Snowman consensus protocol. A Snowman consensus protocol is a chain-optimized consensus protocol that is totally ordered and delivers high throughout. The P chain performs 1500 TPS.
- C chain: The Contract Chain deploys smart contracts and dapps on Avalanche. It implements a modified version of the Ethereum Virtual Machine. Like the P chain, the C Chain also uses a standard blockchain that runs the snowman protocol and delivers 1500 TPS.
- Burning the transaction fees. Avalanche blockchain burns all the transaction fees. Till now, it has burned over 1.7 million AVAX.
- Rewarding the validators. Avalanche validators only earn staking rewards, set to 10% per annum for validators and delegators. To run a validator, users have to stake a minimum of 2000 AVAX, and the staking requirement to run a delegator is 25 AVAX.
- No slashing penalties for misbehaving validators. Avalanche has made an odd decision when dealing with misbehaving validators. There are no slashing penalties. It has puzzled many crypto HODLers, with many justifying Avalanche's decision, saying that building a big network such as Avalanche requires many validators. Thus, the Blockchain has to show some leniency.
- General Popularity. Due to Avalanche's high speed, low fees, and EVM compatibility, the crypto crowd considers it a better suitable investment than ETH. There are over 4.5 million users across 130 countries, and it has over 500 dapps.
Benefits of Avalanche
Developers created Blockchain to address the scalability issues that plague Ethereum. And even though it is not so different from other chains in this regard, the following are why most in the crypto space are bullish about AVAX.
- Interoperability. Avalanche is highly interoperable and can create several subnets atop its Blockchain. That allows different blockchains to share assets and data and interoperate.
- Scalable. Developers created the Avalanche blockchain to deal with the biggest shortcoming of Ethereum, scalability. While other blockchains have tried to address the same issue, they had to trade off decentralization to a certain degree to achieve it. However, with its three-blockchain system, Avalanche can achieve infinite scalability without compromising decentralization.
- User-friendly. The usability of a blockchain tends to be the main concern for many users, and it is the primary factor behind a blockchain's adoption rate. Avalanche is extremely usable due to its user-friendly interface and support for multiple systems. Both traders and developers have an easy time interacting with Avalanche. Also, Avalanche provides a simple platform to those who want to create their own use cases, whether they are private or public.
- Low transaction fees. The transaction fee on Avalanche is far less than on Ethereum. The average cost for swap operations on Avalanche is $0.23, whereas, on Ethereum, the price is $62.00.
Issues With Avalanche
Before rushing in and investing in Avalanche, users must also take note of the concerns that experts and current investors have raised about Avalanche.
There are three main concerns that experts have about the blockchain:
The biggest concern is the lack of transparency. As previously mentioned, the nature and the location of the Avalanche Foundation are still unknown. It wouldn't have mattered in most cases, but in the case of Avalanche, the foundation holds 10% of the token supply – making it the largest initial recipient of AVAX.
The lack of transparency isn't limited to the foundation's identity as it permeates through Avalanche's tokenomics. The whitepaper doesn't mention any details about initial distribution or vesting, and it is also not familiar with the wallet addresses of the foundation's members.
That doesn't mean that the community hasn't asked about it. However, the avalanche support page is barren when it comes to answering any vesting-related queries.
Avalanche is not the only EVM-leveraging and smart contract-enabled cryptocurrency. It faces fierce competition from the likes of Polkadot, Cronos, EOS, and other tokens that use Ethereum Virtual Machines. When asked about it, Avalanche has admitted that it has not been able to hire many developers over the last year. The lack of professionals will likely impact the promises that Avalanche is meant to deliver.
3. No Clear Mission Statement
Avalanche states that the Blockchain's mission is asset tokenization. It is a novel concept that leverages digital assets such as tokens to fractionalize the ownership of physical assets such as fine arts, property, or jewelry. However, considering that AVAX is showing more interest in NFTs and trending facets than its mission, investors are still uncertain about the end goal of Avalanche.
Buying Avalanche – Step by Step Guide
Step 1: Selecting a crypto exchange
Potential investors must first choose a crypto trading platform as per their requirements. The following are the points to consider to make the exchange selection process easier:
- Fees: Different crypto exchanges follow different fee models. Exchanges such as Coinbase, Binance, and FTX, follow a standard fee structure, while eToro has a spread-only ask. Whether a crypto exchange provides fiat options for the first-time models is also important.
- User interface: Novice investors would have no user to engage with robust systems of crypto exchanges. However, those looking for additional analytical tools will find certain crypto exchanges' Pro or Premium features suitable.
- Supported cryptocurrencies: Thankfully, AVAX is available in most crypto exchanges. However, the users must check the trading fee before investing. This is because the cost can vary depending on the cryptocurrency.
Most crypto exchanges follow traditional yet effective strategies such as two-factor authentication and cold storage to store crypto assets regarding security measures.
Step 2: Creating an account on the exchange
After the user has chosen the platform to invest in Avalanche, they must create an account. The account creation process is conventional. However, uploading documents is crucial for account verification and must be done to invest in cryptocurrencies.
This information is collected by the exchange to comply with the international Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements. Certain platforms with crypto-to-crypto trading only do not require ID verification, however, there may be limits on the amount that can be withdrawn per day.
Step 3: Depositing funds in a wallet
Investors are required to deposit the funds before starting their investment journey. The steps are typical for most trading platforms. The users must first click on the deposit funds button – an option common on all platforms.
Coinbase users can use many deposit options, including debit/credit card, bank transfer, ACH transfer, and crypto. There are usually minimum limits and payment fees for each supported payment method which can vary on the investor's place of origin. A common method available is buying Avalanche with a credit card, however, the fees are a lot higher and are not recommended.
Step 4: Buy Avalanche
Once the user has deposited the funds, they must search for Avalanche. They can use the exchange's search badly to do so. After selecting Avalanche, they have to choose the amount to invest in AVAX and click on the "Buy Now" or "Open Trade" button, depending on the platform.
Can You Sell Avalanche?
The procedure for selling a cryptocurrency is not so different from buying one. Investors only need to navigate to their dashboard, select their cryptocurrency, and click on the option that allows them to sell it.
In eToro, "Open Trade" facilitates the sale of a crypto asset. Others follow a more streamlined approach with options such as "Sell". Alternatively, users can also engage in spot trading of Avalanche. They need to select a trading pair, such as AVAX-USD, and start trading.
Avalanche is the next generation of blockchain that addresses the issues of Ethereum and provides a more efficient and scalable platform. To buy AVAX, investors have a vast array of crypto exchanges to choose from. However, they must first ensure that the platform fits their fees and other specific requirements. For first-time investors, we recommend reading our introductory guide on how to buy crypto next.