Avalanche (CRYPTO: AVAX) has had an incredible 2021, emerging from obscurity to become the 11th largest cryptocurrency by market cap. It recently surpassed more established blockchains like Litecoin (CRYPTO: LTC) and Terra (CRYPTO: LUNA) as well as popular meme coins like Shiba Inu (CRYPTO: SHIB) in total market capitalization. It just climbed past the infamous Dogecoin (CRYPTO: DOGE) in market cap, and it didn’t need any help from Elon Musk.
Going forward, Avalanche could have more blue sky ahead of it as the blockchain’s momentum builds. Here are three reasons why Avalanche could just be getting started.
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More real world projects coming to the Avalanche blockchain
The advent of decentralized applications (dApps) on the Ethereum blockchain were instrumental in making Ethereum into the $500 billion asset it is today. Developers and artists migrated to Ethereum. Avalanche is in the process of developing a flourishing ecosystem of its own. There is a burgeoning array of NFTs sprouting up on Avalanche. For example, the NHL’s New York Islanders are partnering with new NFT platform Orange Comet, which uses the Avalanche blockchain, to release a line of NFTs. A play to earn game called Crabada launched on the Avalanche blockchain this November. To get an idea of how big play to earn games are in crypto, take a look at Axie Infinity (CRYPTO: AXS) and its AXS token, which has reached a market cap of $8.5 billion.
Big Four accounting and consulting firm Deloitte also recently tapped Avalanche for a project it is working on. This initiative aims to help local governments streamline the process of receiving FEMA funds in the event of a natural disaster. Deloitte says that it chose Avalanche for this undertaking because of its speed, transparency, and climate-friendly credentials.
Impressive transaction speed
The Avalanche network can process an impressive 4,500 transactions per second, compared to just 15-30 transactions per second for Ethereum (CRYPTO: ETH) or 250 for Cardano (CRYPTO: ADA).This throughput even outperforms that of traditional financial networks like Visa, which processes about 24,000 transactions per second. Only Solana betters Avalanche in terms of throughput with 50,000-65,000 transactions per second. Furthermore, Avalanche executes these transactions for much less than Ethereum. Transactions on the Avalanche blockchain cost about 0.001 AVAX, or about $0.12 at the current AVAX price. Some Ethereum users have been frustrated by the high ‘gas fees’ on the Ethereum network, which can often clock in at $40 or more.
With great transaction speed at a reasonable price, a growing number of interesting projects being built on its blockchain, and adoption by entities like Deloitte for major real world projects, Avalanche has reached critical mass and is here to stay.
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The Motley Fool owns shares of and recommends Ethereum. Michael Byrne owns shares of Solana and Ethereum. The Motley Fool has a disclosure policy.
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