The Avalanche Blockchain: An Analysis Of Different Applications 

The purpose of this article is to demonstrate the data warehouse of Avalanche by Flipside Crypto. Introducing the Avalanche by exploring various charts and providing a good explanation of what it is and how it works if you are new to it. The Avalanche’s blockchain is also displayed here so that we can understand how the blockchain works, its benefits, the approach, and the insights.

Approach  

Analyzing the Avalanche from many perspectives in June 2022 in order to gain a better understanding of how the blockchain works. 

  • Top Applications By TVL 
  • Number Of Transactions , Active Users and Gas Spent By Application
  • Top 10 token Transfers by number of transfers
  • Number of transfers by category of Wallet
  • Top 25 Whales by amount of transferred from Jun 9th 2022
  • Active Whales by Currency
  • Stablecoin Whale Transactions 
  • Stablecoin Transfer Volume
  • Stablecoin Whale Transfer Volume
  • USDC,USDT and DAI Stablecoins Transfer Volume
  • Users Transferring Stable Coins

Avalanche: What Does It Mean And How it Works ?

Ava Labs launched the blockchain platform Avalanche in 2020. It is capable of executing smart contracts. In addition to maintaining decentralization and security, Avalanche focuses on rapidly transferring funds, lowering costs, and being environmentally friendly. Users can customize and interoperate an unlimited number of blockchains using Avalanche. There is a subscription fee for operating a blockchain on AVAX, the Avalanche coin.

To avoid not having Avalanche follows a unique approach to scalability and usability by using three separate blockchains internally, resulting in solve problems with interoperability. They are as follows ,
X-Chain: An asset management blockchain. In order to achieve consensus, it uses the Avalanche protocol.
C-Chain: The C-Chain is used to create smart contracts. Consensus protocol Snowman is used.
P-Chain: This blockchain coordinates validators. Furthermore, it uses Snowman’s consensus protocol.

There are two blockchains (P-Chain and C-Chain) that leverage “Snowman” consensus, enabling high-throughput secure smart contracts, and the X-Chain uses the “Avalanche” consensus, which is secure and scalable.

What is its role in cryptocurrency? Why Does It Need to Be Introduced?

As well as serving as a staking tool for AVAX, it also provides network security. As a reward, stakers receive more AVAX. It is common for users of AVAX to stake the network in order to earn passive income. As a utility token, AVAX is native. In the AVAX network, the AVAX Token is used for a wide variety of purposes, including transaction fees, incentive programs, and many more. 

Today, Ethereum apps typically use layer-2 scaling solutions to improve transaction speed and address scalability  issues. Layer 2 separates transactions from the main chain. As a result, the transaction is then packaged in neat “bundles” and is then sent back to the Ethereum chain, relieving Ethereum of some of its burden. Although it works effectively in many cases, it can also complicate security in some cases. As a result, avalanche has been designed to solve these problems and maintain scalability, transaction speed, and security in a single layer.

What are the benefits of using Avalanche ?

Avalanche addresses two major issues:

Traffic congestion: Scalability was a deliberate design goal of Avalanche. Avalanche is as fast as PayPal and VISA when it comes to processing transactions. In addition to its tremendous power and efficiency, Avalanche is extremely fast, able to process up to 6,500 transactions per second with a time resolution of less than a minute. As compared to Ethereum’s limitations, this is a huge improvement.

Low fees : Although many consider Avalanche to be a competitor of Ethereum, it also has a lower gas fee than Ethereum. There is a large difference between the cost of Avalanche and Ethereum.

Comparing it to other blockchains, how popular is it?

In order to overcome many of the problems faced by most blockchain networks, Avalanche was built. Avalanche, a platform similar to Ethereum, works to combat centralization in the crypto space by offering an alternative. * As compared to other Blockchains, the Avalanche Blockchain has the following advantages. 
Compatibility: Data and coins are exchanged between two platforms through interoperability. The Avalanche blockchain provides interoperability with other blockchains, allowing users to trade coins with other platforms.
Adaptability: It takes an enormous amount of energy and computing power to mine Bitcoin (BTC), for example. There is a limit of 15 transactions per second for Ethereum. These blockchains are powerful and highly valuable, but they are not scalable. Meanwhile, Avalanche’s processing capacity is incredible and its transaction times are sub-second.  
Convenience: Avalanche is becoming more popular in the cryptocurrency community faster than Ethereum. It become very popular with many users by its ease of implementing and using any technology, regardless of its application.

Here from the below tweet we can see different Defi applications which are built on the Avalanche Blockchain .

The Top Applications – TVL, Transactions, Active Wallets, and Gas Spent   

We can see the top Avalanche blockchain applications from the graph below. AAVE contributed for 48.15 percent of total TVL when looking at the top applications.

The total number of transactions between June 9, 2022 and July 21, 2022 was 1.35M. More than three quarters (81.69%) of all transactions were conducted using Trader Joe Applications.  The highest total Transactions are 1.1M (Trader Joe), and the lowest are 364 (Avalanche Bridge). A maximum of 62.7K transactions were observed on June 13, 2022. Between June and July2022, there was a decreasing trend in total transactions. On July 3, 2022, there were fewer transactions than normal, but on June 13, 2022, there were more transactions than usual.

We can see from the below graph how many transactions were made application-by-application. The following graph shows the highest percentage of transactions handled by Trader Joes out of the top 10 applications.

In the below graph, we can see the number of active users for all top applications. In this graph, we can see that the majority of active users come from Trader Joe’s. In the following position, Aave is in second place. Over three quarters of all Users came from Trader Joe Applications (81.69%).  The maximum number of users was 62.7K on June 13, 2022. Trends indicate that users are decreasing.  In July 3, 2022, the number of users is lower than usual, and in June 13, 2022, it is higher than usual.

We can see from the below graph how many active wallets were there in application-by-application. The following graph shows the highest percentage of actie wallets were from Trader Joes out of the top 10 applications.

It was estimated that 8.74K of fees were collected between June 9, 2022 and July 21, 2022. There was an 81.22% contribution from the top 2 applications (Aave and Curve Fi).  A maximum fee of 818.99 was observed on June 13, 2022. June 16, 2022 total fees were lower than normal, while June 13, 2022 and June 18, 2022 total fees were higher than normal. There was a downward trend in fees across all applications.

Here is a breakdown of the amount of gas fees spent on each application. Out of the top 10 applications, Curve Fi spends the most gas fees, followed by Trader Joe’s. We can then see that the Aave spent more on gas.

Analysis Of Token Transfers, Whale Activity And Stablecoins(USDC, USDT and DAI)

As we can see from the below graph, we can see the top 10 tokens in terms of their number of transfers. Approximately 40.24 percent of total transfers were sponsored by wrapped Avax tokens. The lowest total Transfers are 1.95K (Step App: Fitfi Token) and the highest are 2.82M (Wrapped Avax). The maximum number of transfers was 401.25K on June 13, 2022. The total number of transfers decreased from June to July 2022. June 16, 2022’s total transfers are lower than normal, while June 13, 2022’s and June 18, 2022’s total transfers are higher than normal. Transfers trended downward for 9 Tokens.

Here from the below graph we can see the top 10 token transfers percentage by number of transfers . Approximately 40.24 percent of total transfers were sponsored by wrapped Avax tokens. And if we take the top 2 tokens (Wrapped Avax and USD Coin) contributed for 56.67% of total Transfers.

In the graph below, we can see how many transfers have been made among the different wallet categories. As a result, the transfers were categorized by wallet. Additionally, we consider transactions over $500K to be whale transactions. The total number of transfers between June 9, 2022 and July 21, 2022 was 1.94M. Of the 5 categories, Category Minion (*1K) contributes the most to the total of transfers (71.49%). In terms of total transfers, whale ($500K+) has the lowest total and minion (<1K) has the highest total. In June 13, 2022, a maximum of 112.03K transfers was observed, and a minimum of 22.97K transfers were observed in July 9, 2022. During the month of June 13, 2022, the number of transfers is higher than usual.

Here we can see the top 25 whales and which are taken here by their amount of transferred from June 9th 2022 onwards. Here we consider transactions over $500K to be whale transactions.

Between June 9, 2022 and July 21, 2022, there were 2.42K active whales. Out of the 3 stablecoins, USDC contributes the most (52.83%) to the total wallets. In terms of total wallets, the lowest is 206 (DAI) and the highest is 1.28K (USDC).  The maximum number of wallets was 225 on June 13, 2022, and the minimum number was 14 on July 10, 2022. The total number of wallets decreased from June to July 2022. June 17, 2022, total wallets are lower than normal, and June 13, 2022, total wallets are higher than normal

The graph below shows the whale transactions of stablecoins on the Avalanche blockchain. We consider transactions over $500K as whale transactions here. On June 13th 2022, we can see a higher number of transactions than usual. Compared to other stablecoins, USDC contributes more than 70 percent of transactions.

There is a strong correlation between the transfer volumes of all stablecoins. Based on the graph below, we can see that USDC contributes more transfer volume than the other stable coins. Out of the 3 stable coins, USDC contributes the most to total Volume (61.2%). A total value of $5.56 B (DAI) is the lowest total value, while a total value of $22.26 B (USDC) is the highest. A maximum volume of $5B was observed on June 14, 2022, and a minimum volume of $155.15M was observed on July 10, 2022. A lower volume was recorded on June 15, 2022, and a higher volume was recorded on June 13, 2022, and July 6, 2022.

Here we can see the transfer volume of different stablecoins(USDC, USDT and DAI). A maximum volume of $5B was observed on June 14, 2022, and a minimum volume of $155.15M was observed on July 10, 2022. The total volume decreased from June to July 2022. June 15, 2022 and June 16, 2022 have a lower volume than normal, while June 13, 2022 and July 6, 2022 have a higher volume than normal.

Out of the 3 stable coins, USDC contributes the most (65.95%) to the total Users. DAI has the lowest total Users at 38.18K, while USDC has the highest total Users at 302.89K. The maximum number of users was 18.45K on June 13, 2022. The total number of users decreased from June to July 2022. In June 13, 2022, the total number of users is higher than normal. The number of users for three stable coins decreased. Here we can see the USDC is contributing more than 65% of the users out of the 3 stablecoins . That means we can say the maximum of user transfers from these 3 stablecoins are done with USDC .

Observations

From the above analysis, 

  • Among Avalanche Blockchain’s top applications by total value locked.AAVE is the in a first position by its TVL. There is almost 5 times more TVL in Aave than in the other top two applications.
  • Based on the number of transactions, active users, and gas spent by application, we can see that Trader Joe is in the top 1 in all these metrics.
  • Among the top 10 token transfers, most transfers are made with wrapped avax tokens.
  • Based on the number of transfers by wallet category, most wallets are having their transfers under the Minion(<1K) category.
  • Any transaction over $500K is considered a whale transaction here.
  • According to the graph, the stable coin USDC has the most active whales by currency. 
  • As you can see here, the transfer volume, whale volume, and stable coins transactions are at their peak on June 14th 2022. 
  • In looking at the separate transfer volumes of USDC, USDT and DAI stable coins, we can see that there is a maximum volume between Jun 13th and Jun 14th 2022. 
  • Among the three stable coins, USDC contributes more than 65% of users. USDC is used by the majority of users to transfer from these 3 stable coins.

References : https://flipsidecrypto.xyz/
                      https://defillama.com/chain/Avalanche






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