SVET Reports
SVET. AVALANCHE AND VELAS NETWORKS SUMMARY REPORT
SVET. AVALANCHE AND VELAS NETWORKS SUMMARY REPORT
Introduction
The crypto industry becoming more diverse. We see new projects launching almost on a daily basis. And with every launch of these projects the crypto landscape tends to become better and efficient negating contradictory reports naysayers and traditional establishments. It’s quite an exciting world we are currently living in. In this report I will be looking at two interesting projects, Avalanche and Velas blockchains, which have drawn attention of many and I will attempt to review these projects performances based on different four criteria. It’s my goal that at the end of the review your will have a better understanding of the technologies.
Definition
• Avalanche: Avalanche is a high-performance, scalable, customizable and secure blockchain platform targeting building application- specific blockchains, scalable decentralized applications and complex digital smart assets. [1]
• Velas: Velas is a fork of the Solana network and the world's fastest Ethereum Virtual Machine Blockchain enabling up to 75 000 transactions per second (TPS) with offering an easy-to-use user experience decentralised apps built on it. It is the most secured blockchain out there. [2]
Review
Having briefly defined the blockchains, I will proceed to briefly evaluate the two blockchains by under the following categories Product, Market, Business and Financial evaluations.
I will begin with the Avalanche Network. Let’s proceed!
• Product Evaluation
Avalanche is a layer one blockchain protocol with a proof of stake consensus mechanism. It features an improved 80% parameterized safety threshold over the 51% in Bitcoin making one of the most secured networks [3]. Since launch in 2020, it experienced a security breach in its network only twice [4]. It is one the most scalable blockchains and can scale almost “infinitely” and highly energy efficient, high transaction per second of 4,500 and a time to finality of less than 2 seconds [3] compared to Bitcoin and Ethereum’s 60minutes and 60 seconds respectively.
Seated core in the Avalanche system engineering are 3 chains running within its protocol. These chains [5] are the Contract chain(C-Chain), Platform chain(P-Chain) and Exchange chain (X-chain). These chains are all tasked with tasks on the network. A unique feature is the presence of subnetworks or subnets. They are run on the platform chain and are initiated when the system is getting overloaded with transactions. You can think of subnets as “blockchains”. The subnets are triggered to offer the network extra resources to carry the transactions and execute them without slowing down. Blockchains are synonymous with decentralization and decentralization is based on factors including governance and number of validator nodes a network has. Avalanche does in corporate governance in its protocol where every token holder has voting power. It has 1,237 nodes running and its code is open source [6]. It’s quite a transparent network.
• Market Evaluation
Here we see the extent of the Avalanche project vision. The crypto space has been struggling with high transaction fees, low transaction throughput and long confirmation time. To meet the current and the futuristic demand, Avalanche offers lower fees with increased throughput at faster finality time of $0.03, 4,500 tps and <2 seconds respectively. It faces competition from Ethereum, Solana, Polkadot. Note with Avalanche, you don’t need to Solidity to write smart contracts, it offers multiple language flexibility [5].
Avalanche faces a $3 trillion crypto market size with projections of massive growth. IT ranks a 2nd in the DeFi market capping $110.34 billion with market cap of $17 billion [7]. The team launched a $180 million incentive fund to draw projects to its network and these has seen tremendous results as it now hosts over 400 projects including Aave and Curve.
Avalanche has received a wide support and positive comments from industry giants including Ethereum founder Vitalik Buterin [8]. It boasts of about 1.3 million followership [7]. It has a vibrant twitter and Telegram communities. They have representation on Facebook, Discord, Meetup, Reddit and LinkedIn. Regarding the project’s timing to the market, there is no better time than when it came. It clearly states it proposed activity and milestones in its roadmap for its community to keep track of its activities over time. However, it has been not fully met its new wallet and Avalanche bridge version milestone for 4th quarter of 2021.
• Business Evaluation
Revenue can be used in assessing network value. With low transaction fee and high throughput, it lowers enter barriers to DeFi and increases activities on its network. It is estimated to have an annual revenue is $54.66 million [1] as of 2021. It is also seeing use cases in fund management, debt financing, identity tracking and more [3].
In case you are wondering if this project is legit, you don’t have to worry as it is a registered company with details on the Edgar filling from the US SEC database under the name Ava Labs [9].
Looking at its partnership and funding rounds, the network has investments of $18.5 million and $230 million in different funding rounds to support the growth of its ecosystem [10,11]. Among the investors are Three arrows and Polychain. It currently has $12.59 billion Total value locked [11]. The team behind Avalanche is led by Prof Emin Gun Sirer and astute computer scientist. He is the founder and CEO of Ava Labs. He began working on the Avalanche project as research and assisted by Maofan Yin and Kevin Sekniqi at Cornell University [12]. With the growth of the project, Avalabs has 107 members on its team with diverse specialization [13].
• Financial Evaluation
$AVAX has experienced volatility in its value due to speculations. Its price saw a rise from its lowest of transaction volume of $173.09 million at $4.11 to its ATH of $134.53 with a volume of $3.21bilion but has now rescinded at $67.04 volume of $695,821,613 and market cap of$16.42billion. It is expected the price of AVAX will go back to bullish ways as the project continuous to innovate and incubate new user case. Avalanche has experienced a high adoption rate which is reflected in its token usage and total value locked in DeFi protocols from $72 million in 2021 to $13 billion in 2022 [3]. Its value has had over 3100% increase outperforming its competitors. The $AVAX transaction volumes from its ATL of $4.11 is 42.11 million daily to 23.86million daily transaction at ATH of $134.53. but has now rescinded at $67.04 at transaction rate of 10.379million [1]. AVAX is predicted to close 2022 at $275 while others estimate a $305 [14].
$AVAX, the native token of the Avalanche network is hard capped at 720 billion tokens and 50% of $AVAX is planned to be minted over time while the remaining 50% are in the genesis block [6]. Market statistics shows there 244 million AVAX are in circulation with 712,000 $AVAX burnt since launch Avalanche network has over 1.75million accounts with a recent daily increase of 12,475 holders [15]. AVAX is available to trade on major exchanges Binance, Huobi, KuCoin, BitFinex, Coinbase and other Exchanges. It is available in AVAX/BTC, AVAX/ETH, AVAX/USDT, AVAX/USDC, AVAX/BNB. Its web wallet is fully operational. AVAX token can be stored in Ledger wallet, Metamask and Trust wallet. Avalanche gives a low gas fee of 25nanoAvax ($0.03). staking of AVAX are done with 9.7% reward. It sees a daily transaction volume of $695,821,613.
Velas Network
• Product Evaluation
Velas adopts proof of stake consensus mechanism to protect its network. It has a built-in Artificial intelligence algorithm which further resist security attacks [16]. This layer of security slows the system when there is an attack and accelerate the system when operation is normal [17]. No record of security breach has been recorded on in its network. It is a highly scalable network which produces an abysmal unrivalled 75,000 tps and 1.2 sec finality. It uses the Delegated Proof of Stake mechanism and Proof of History to increase block time which makes it easy to use and energy efficient.
One of the high points of Velas architecture is the embedding of artificial intelligence into its blockchain resulting is its artificial consensus algorithm (AIDPOS). It uses AI to adapt the blockchain to current circumstances within the network, preserving the level of the performance and resilience primarily [16]. The network is said to have about 100 nodes and 42 validators [18]. This is a relatively small size and doesn’t reflect its decentralization objectives. This is a major downside. Velas implements an on-chain governance to be a community-driven project where community members can vote for the next product its team places priority on [19].
• Market Evaluation
A big barrier to entry into the crypto space for new entrants and less tech savvies is the technical complexities associated with it. Velas recognizes this and allows users their own password-less authentication system, allowing users securely access a variety of services without a password using just their Velas Account [19]. Velas faces competition from Ethereum, Solana, Avalanche, Polygon and Binance Chain having a unique AI layer that guarantees security and unrivalled throughput of 75,000 tps, a time to finality of 1.2 seconds and almost non-existent fees of $0.0001.
Currently, the DeFi crypto market cap is $110.34 billion, and Ethereum the king of Defi has a cap at $2.87Billion. These figures are dwarfing current performance of 105th rank by global crypto market cap in the $548.34 million [2] with a daily volume of $9,245,304. It has it now features about 40 projects on its network.
As at the time of this review, the Velas community is active and thriving with representations across several networks including Facebook, Twitter LinkedIn and Telegram with Telegram and Twitter communities to be the most vibrant with users cheering up, engaging in discussions. Generally, the project’s launch and initiative is timely and will definitely benefit the crypto industry but there is no visible documented piece of information regarding the projects sets of goals to be achieved and events to be held so far.
• Business Evaluation
The network offers the use of its native token, the $VLX, to conduct transactions on its blockchain, make payments and stake tokens to produce blocks and receive rewards. Velas capitalizes on its blazingly fast 75,000tps, cheap transaction fees of $0.0001 and secured system architectures and new user experience to lure in both existing and new users. The Velas project is a verified and registered company headquartered in Switzerland under the name VELAS Network AG with the Register number: CH-170.3.043.683-0. It became a legal entity in 2019[20].
It has granted over $5million and $100million [4] in two different rounds to developers, innovators in the bid to add more value and strength to its ecosystem and so far, has a market of $322million. It is yet to record any investor. It has strategic partnership with well-known companies like Ferrari, Solana, Aurum, Web3 Space, Alpine Capital, Coinpayments, crypto valley to mention a few [5]. The worlds fastest blockchain was founded by Alex Alexandrov, CEO of Coinpayments, a cryptocurrency payment processor accepting Bitcoin and other major altcoins. With Alex Alexadrov now Chief Innovation Officer, Farhad Shagulyamov is now the CEO. He heads the business development operations of Velas.
• Financial Evaluation
The Velas token was valued at $0.018 at its ICO and is currently valued at $0.24 which is approximately 1300% its initial price. Its value remains relatively at the opening price for a while and but then grew consistently to setting new highs from $0.087, $0.21 and $0.55. Fundamentally, Velas is looking bullish and its value will increase not astronomically but gradually over time as analyst project a $0.9 per VLX in 2024[3]. The daily transaction shows highest and lowest volume at $508,530 [1] at $0.01261 on 10/9/2019 and $45.38 million at $0.55 on 12/23/2021[1}. It currently sees a daily throughput of $9,159,435 an 80% decrease in transaction volume. New partnerships like listing on Binance will increase volume. Its tokenomics is as thus: total supply 0f 2.229 billion VLX; and Circulating Supply of 2.223 VLX [4].
$VLX is used to pay transaction fees on the network. It has total number of 2,088 token holders address [5].
$VLX is not available on major crypto exchanges but is heavily traded on Gate.io and KuKoin. It is majorly traded as VLX/BTC, VLX/WBNB, VLX/USDT, VLX/ETH. It has both desktop wallet and mobile wallet which are fully operational with multicurrency functionality and can be used for staking. These wallets are available for different mobile and desktop platforms. Also worthy of mention the user experience is quite beautiful. The Velas wallet can also be connected to Metamask and a total of 92,529 wallets are recognized on the Velas Explorer. The cost of Transaction is $0.00001 with a cumulative stake of $1.6 billion and Estimated APR 10.1%. Averagely, it sees a $9 million transaction volume daily.
Conclusion
You will agree that Avalanche and Velas project are high performance and exciting piece of technologies and both offers competitive solutions. They have huge potentials of causing massive disruptions and propel the crypto space to new horizons with the solutions they offer users. As incredible as they are, they differ in their performance and may not appeal to everyone in the same degree. In case you are at the crossroads, let this review offer some guidance. However, remember that the crypto space is volatile and some level of guarantee cannot be assured.
References
1. https://21shares.com/research/avalanche-research-primer/
2. https://coinmarketcap.com/currencies/velas/
3. https://www.avax.network/
4. https://coinquora.com/avalanche-fails-to-deliver-security-zabu-price-tanks/
5. https://docs.avax.network/learn/platform-overview/
6. https://assets.website-files.com/5d80307810123f5ffbb34d6e/6008d7bbf8b10d1eb01e7e16_Avalanche%20Platform%20Whitepaper.pdf
7. https://coinmarketcap.com/currencies/avalanche/
8. https://twitter.com/VitalikButerin/status/1229908044714086401
9. https://www.sec.gov/edgar/browse/?CIK=1789243
10. https://financefeeds.com/18-5-million-secured-avalanche-accelerator-successful-round/
11. https://news.bitcoin.com/avalanche-pulls-down-230-million-investment-led-by-polychain-and-three-arrows-capital/
12. https://en.wikipedia.org/wiki/Emin_G%C3%BCn_Sirer
13. https://www.avalabs.org/team
14. https://finance.yahoo.com/news/avalanche-avax-price-prediction-2022-175010529.html#:~:text=Other%20forecasts%20for%20next%20year,the%20bullish%20sentiment%20will%20continue.
15. https://snowtrace.io/chart/address
16. https://velasblockchain.medium.com/velas-technologies-aidpos-70d0244467db
17. https://thenewscrypto.com/velas-vlx-upsurges-over-72-in-the-last-7-days/
18.'https://velas.com/tr#numbers
19. https://velas.com/pdf/whitepaper.pdf