Avalanche – an advanced blockchain platform ensuring the security of financial transactions, scalability, and decentralization. The native token of Avalanche – Avax – is used for conducting transactions within the system and supporting smart contracts.
Avalanche – a relatively young blockchain platform. Its development began in 2018, and its operational launch took place in 2020. The platform's market capitalization exceeds 18 billion dollars, with a total of 720 million tokens issued. More than 46% of all available coins are involved in staking.
The Avalanche protocol consists of three networks, each with validators and internal rules:
- X-Chain – a network engaged in the issuance and operations with crypto assets, including the token Avax.
- P-Chain is used to coordinate validators and create new subnets.
- C-Chain is designed for creating and working with smart contracts.
Avalanche – the main competitor of Ethereum. The platform's advantage lies in successfully combining three important tasks: speed, scalability, and decentralization. Because of this, Avax is considered one of the most promising existing cryptocurrencies. It is among the top ten and understandably generates interest from business representatives and ordinary users who wish to store their savings not in fiat currencies, but in crypto.
Is it possible to get Avax through mining?
Avalanche uses POS (Proof-of-Stake), which makes regular mining impossible. However, this does not mean that the owner of Avax can only sell, buy, or exchange coins. They have several ways to earn additional income from their cryptocurrency:
- Staking.
- Landing.
- Тrading.
- Investing.
Each of the methods has its own features. This requires special attention, as in the case of an error, the asset owner may either miss out on potential profits or even lose all investments.
Стейкинг
Staking – earning rewards for holding cryptocurrency on a platform for a specified period. It is the most popular and practical method of gaining additional benefits from owning crypto assets. By participating in the Avalanche network, the owner of “frozen” funds receives rewards. The amount of this reward depends on the platform used, the invested amount, and the duration of the asset freeze.
There are several types of staking:
By the location of the assets:
- Exchange. Existing coins can be placed on a cryptocurrency exchange that supports working with Avax. The exchange may block funds for staking or allow them to be used – sold, exchanged, or purchased. Additionally, assets can be withdrawn from the exchange and converted into various fiat currencies. However, conducting any financial transaction will mean ending the staking process.
- Decentralized Finance (DeFi). This is the most profitable option due to its high yield. Assets in crypto are locked up to ensure the functioning of the chosen system (exchange, wallet, crypto exchange, etc.). Smart contracts provide maximum security and safety of funds.
- Technical. This method requires the presence of a special wallet that allows staking, or a server.
По типу вклада:
- Fixed. Like with a long-term bank deposit, in fixed staking, assets are frozen for a specific period. The minimum period is 14 days. Until it expires, it is impossible to withdraw funds or perform any operations with them. After the process is completed, any actions allowed by the platform can be performed with the assets, and a reward in percentages is accrued for using the coins. This can be quite significant, reaching up to 15 – 20%. It is an excellent way to generate passive income for those who want to hold funds in cryptocurrency without movement for an extended period.
- Perpetual. Assets are allocated without fixing a specific term. The contract remains valid as long as the funds remain inactive. Once the owner withdraws the coins, sells them, or exchanges them, the interest accrual stops and is paid out for the entire time the assets are on the platform or in the wallet. The owner can reinvest the cryptocurrency under the same or different conditions. This type of staking is suitable for those who, for various reasons, do not want to freeze their assets for a long time and prefer more active actions with them.
You can stake cryptocurrency investments on cryptocurrency exchanges and wallets that support Avax. To start operations with crypto, you will need to acquire it and place it on a carefully selected resource. The minimum amount of Avax for staking is 25 coins for regular users and significantly more for validators – the amount can reach 200 Avax. The profitability of staking depends on the rules adopted on the platform, the duration of use, and the size of the transferred funds. It ranges between 4 – 8%. The payout terms also relate to the platform's rules. There is also a risk of asset loss. It is most often associated with errors or fraudulent actions by the participant themselves. In this case, the invested funds are "burned." This process is called slashing. It is designed to ensure the safety of the network if a validator shows signs of fraud.
The risks of losing funds when using staking are small, but they do exist. For example, if the owner stakes through DeFi platforms, due to the drop in the value of the cryptocurrency Avax, they may incur a loss. However, the subsequent increase in the price of the crypto could offset the lost amount.
Landing
Landing refers to the transfer of personal digital assets Avax for use by third parties or organizations. In return, the owner receives payment in percentage terms, which depends on the terms of the operation and the number of coins. Landing is a promising method to earn passive income from cryptocurrency ownership. It carries minimal risks, which is why a steady growth in its popularity is noted.
Unlike staking, in lending, the actual Avax coins are not transferred, only the rights. The cryptocurrency remains with the owner under the protection of a smart contract. The yield of such an operation fluctuates between 5% and 15%, but it depends on a number of factors, such as the platform and the amount.
Trading
"In general, cryptocurrency trading is similar to trading stocks or specific goods. However, the cryptocurrency market is not tied to time zones and operates 24/7, with cryptocurrencies serving as the trade items. Avax traders have the opportunity to invest, buy, and sell crypto multiple times throughout the day, tracking price fluctuations and making significant profits."
Trading as a method of generating additional income from crypto is not suitable for beginner users, as it requires a certain level of knowledge and skills in working on a cryptocurrency exchange. Moreover, this method takes a lot of time unlike earning passive income from crypto, where the owner is not required to take virtually any actions.
Инвестиции
Cryptocurrency markets are characterized by high volatility, so investing funds can be used to generate income. By investing in Avax and waiting for the cryptocurrency's value to rise, it can be sold for a significant profit. This method also cannot be considered completely passive, as the asset owner needs to constantly monitor the currency's price fluctuations in the market. However, it does not require significant effort and special technical skills.
Using a single means of generating income from owning Avax does not exclude other ways to increase the existing volume of resources. Depending on the amount, the owner can combine several methods, and even use them all at once. However, for generating passive income, staking is considered the optimal option.
Avalanche promotes the rapid turnover of assets and provides security when using resources. This blockchain platform is perfect for various cryptocurrency operations as well as for generating different types of income from owning crypto, including passive income.
Cryptocurrency Avax has great potential, providing 6.5 thousand transactions per second. It is sold on various cryptocurrency exchanges. Avax allows for asset growth through acquiring funds, making trades, or through passive income. However, it's important to consider the potential risks while carefully choosing methods to increase investments and allocate funds.