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Ultimate Avalanche Web3 Guide

Table of Contents

Yield farming and staking on Avalanche network — is it worth a try?

Avalanche is an innovative DeFi platform that uses a novel approach to dispel the myth that blockchains are slow. It is a highly scalable solution that was built with dApp developers in mind, so they can create, launch and develop a variety of decentralized applications.

In this guide, we will look at the innovations that Avalanche offers, provide an overview of its underlying architecture and explain how you can stake in Avalanche to gain returns.

Table of Contents

What is the Avalanche network?
High transaction throughput
Consensus
Cross-chain swaps
No expensive hardware
Eco-friendliness & resourcefulness
Supports the Ethereum development toolkit
$AVAX Token
The Avalanche Network Ecosystem
Pangolin, a major Avalanche project
Avalanche now available on De.Fi!
Wallets for Avalanche
How to use Avalanche with Metamask
Staking and Yield Farming on Avalanche
How to stake on Avalanche
Should I use Avalanche for staking and yield farming?

What is the Avalanche network?

Avalanche is an open-source platform for developing DeFi applications and enterprise blockchain deployments. It’s gained attention during the recent crypto bull run thanks to the following features:

High transaction throughput

The network is capable of confirming millions of transactions per second, which places it way above most other blockchains. Avalanche is one of the most scalable solutions on the market.

Consensus

The consensus used by Avalanche is a breakthrough of sorts, as it combines elements of existing mechanisms to create a faster, more scalable and more efficient solution.

Avalanche consensus does not depend on miners (Nakamoto consensus) or on all nodes interacting with one another (classic consensus). Instead, Avalanche uses what can be referred to as a gossip or epidemic protocol to achieve consensus.

This approach works as follows:

  • One node randomly queries a certain number of nodes around it and they respond.
  • The first node sees what was the most common response and adds its own weight to it.
  • When queried, the node returns all the previously received data, plus its own weight.
  • In the end, the replies tilt towards a preferred choice, which becomes the consensus.

This process is completed so quickly that the transaction throughput is unmatched.

Cross-chain swaps

One of the most innovative features of Avalanche is the way it enables cross-chain swaps between its native chains (X, P, and C).

The stem network is separated into three separate chains. Each performs its own duties, forming layer 0 and layer 1 solutions, as well as a unique consensus system. Each chain’s duties are as follows:

  • X-Chain (Exchange Chain) which deals with the creation of new assets and trading.
  • P-Chain (Platform Chain) which deals with staking, coordination of delegators and the creation of validator subnets. It is also used for chain validation.
  • C-Chain (Contract Chain) which is used for dApps, ERC20 tokens, ERC721 NFTs and is the Avalanche equivalent of the Ethereum Virtual Machine (EVM).

No expensive hardware

You do not need any expensive hardware to host a node as an Avalanche validator, so any computer will do.

Eco-friendliness & resourcefulness

In order to reduce the amount of energy the network uses, Avalanche nodes only process transactions when they need to, so no resources are wasted.

Supports the Ethereum development toolkit

In order to make it as easy as possible for existing blockchain developers to use Avalanche, it supports the entire Ethereum development toolkit, so developers can easily switch without needing to learn new skills.

$AVAX Token

AVAX is the native token of Avalanche. It’s a hard-capped, scarce asset that is used to pay for fees, secure the platform through staking, and provide a basic unit of account between the multiple subnets created on Avalanche. 1 nAVAX is equal to 0.000000001 AVAX.

As of 28th of October, $AVAX price is $63.52.

MarketCap — $14,030,596,667.

The Avalanche DeFi Ecosystem

The Avalanche DeFi ecosystem is rapidly growing and understandably so. The platform allows you to create decentralized applications and custom blockchain networks, using popular languages like Go, rather than just Solidity.

The promise of Avalanche is that you can do anything you can with Ethereum but at higher speed, with greater transaction throughput and with lower fees. Plus, existing dApps built on Ethereum can easily be transported to Avalanche.

Today, the vastness of the Avalanche ecosystem includes applications for private securities, initial litigation offerings, DEXes, synthetics, stablecoins, DeFi, prediction markets and more. Also, major stablecoin projects USDT and USDC have announced native integrations with Avalanche.

Pangolin, a major Avalanche project

Recently, we published an interview with Pangolin, one of the largest projects on Avalanche.

Pangolin is a community-driven decentralized exchange for Avalanche and Ethereum assets with fast settlement, low transaction fees and democratic distribution. Pangolin is powered by Avalanche and helps you to find the best trading and DeFi yield farm maximization opportunities.

In the interview, we discuss the following topics:

  • Whether Avalanche is better than BSC and Polygon
  • How Pangolin and Avalanche deal with impermanent loss
  • Capital efficiency issues, including Uniswap vs Pangolin

Plus a lot more! You can access the De.Fi and Pangolin interview now.

Avalanche now available on De.Fi!

Recently, we also announced the De.Fi integration with Avalanche, so it is now available on our platform!

You can track your balances, assets, deposits and staking on the De.Fi dashboard by clicking on “Dashboard” and choosing Avalanche network.

Alternatively, you can use a customization bar to configure networks, as shown below.

Below, you’ll see all the dApps that are included in the Avalanche ecosystem. You can also view them all by accessing the Avalanche marketplace.

Wallets for Avalanche

There are a variety of wallet options available for accessing Avalanche, including web, hardware and mobile options.

Avalanche wallet

This is Avalanche’s native web wallet and the natural choice for anyone who wants to store or stake AVAX tokens.

De.Fi

Our platform includes a DeFi wallet tracker and staking dashboard, which allows you to track your balances, assets, deposits and staking on Avalanche, as well as letting you access the unique crypto hack/scam database and audit database.

Nano X

This hardware wallet is deemed to be one of the most secure available and also allows you to stake your tokens.

Metamask

This browser and mobile option is one of the most used wallets today and can also be used to store your AVAX tokens.

How to use Avalanche with Metamask

Click on the “Account” button, as shown in the image below.

Go to “Settings”, at the bottom of the image below.

Click on “Networks”, as highlighted below.

Then, click on “Add Network”, fill in the details shown below and save.

Network Name: Avalanche Network

New RPC URL: https://api.avax.network/ext/bc/C/rpc

ChainID: 43114

Symbol: AVAX

Explorer: https://cchain.explorer.avax.network/

Staking and Yield Farming on Avalanche

Investors are taking advantage of the opportunities for yield generation on Avalanche, as the image below showing Total Value Locked (TVL) on various DeFi projects demonstrates.

Staking on Avalanche works on the principle of delegating your assets. Firstly, you need to buy your AVAX tokens, which can be done through exchanges like Binance, OKEx, Gate.io, Kucoin and others. Then, you need to create your Avalanche wallet, as explained in the steps below.

How to stake on Avalanche

Having bought your AVAX tokens, the first step you need to take in order to stake them is to create a new wallet.

1. Create a new wallet

Start by visiting the official wallet page and then click ”create new wallet”, as shown in the image below.

Then click the “generate key phrase” shown below. This will generate a mnemonic phrase that you need to save in a safe place. Do not neglect this step, as doing so could result in you losing your assets.

You will then be asked for some parts of the mnemonic phrase in order to access your wallet.

2. Send tokens to your wallet

Now you have the wallet and tokens but you need to transfer the tokens into your wallet. To do this, use the address you will see beside your wallet details in the Portfolio tab, as shown below.

3. Delegate your tokens

To delegate your tokens, click on the “Earn” tab in the menu.

You need to have your funds available on the Platform Chain (P-Chain) if you want to stake.

Therefore, if your funds are on the Exchange Chain (X-Chain), you will need to transfer them to the P-Chain by initiating a cross-chain transfer. If you have only just transferred your tokens, they will definitely land on the X-chain.

Once you have successfully transferred your tokens between chains, you will see the “Transfer Completed” message in the image below and will be able to start delegating.

To delegate, find the “Delegate” section shown below and click on the “add delegator” button to pick the node you would like to delegate your tokens to.

Choose a delegator based on the end time, uptime and fee metrics that suit you.

Once you have decided on a delegator, click “Select” to choose the appropriate Node ID.

Then, enter the end date of your stake, your staking amount, and decide whether you want to receive your staking rewards to your current wallet or any other wallet, as shown below.

When you are ready, click “Confirm”.

AVAX Yield Farming Video Guide

On our Youtube channel you can find a complete beginner guide to Avalanche.

Should I use Avalanche for staking and yield farming?

Staking on Avalanche is one of the safest across the industry due to the fact that there is no slashing mechanism involved.

This means your tokens will not be destroyed if the node you delegate to goes offline. All you’re ever risking is the staking reward, so your initial tokens are guaranteed to be safe. The APY is currently around 10%, so this looks like a great opportunity for those looking to gain returns from their AVAX holdings.

Based on this research, we suggest that Avalanche is a great project. Here you can check yield farming opportunities on Avalanche: https://de.fi/explore/network/avalanche

However this is not investment advice and you should always do your own research before investing.

Check our other resources to stay safe and explore DeFi:

Upcoming Crypto Airdrops for 2023
Smart Contract Audit Services
Free Smart Contract Audit
Revoke Crypto Wallet Permissions Tool

And join us on Twitter and Telegram!

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