Why was Avalanche Protocol AVAX selected by Vitalik Buterin? An in-depth analysis of its technological breakthroughs and current market situation

When it comes to authoritative figures in the blockchain space, Ethereum founder Vitalik Buterin definitely ranks among them. Due to his rigorous standards, projects that gain his approval are few and far between. However, Avalanche (Snowball Protocol) is an exception—V神 has publicly stated that the innovation level of this public chain is comparable to Bitcoin. How high is this praise? It helps us understand why AVAX has become one of the top market cap public chain tokens in just a few years.

What exactly does the Snowball Protocol solve?

The name Avalanche is very illustrative—like the unstoppable impact of a collapsing snow mountain, the underlying mechanism of this public chain is designed to be fast and efficient.

The AVAX project started in 2018, with the establishment of AVA Labs in 2019, and the mainnet launched in 2020. Behind this seemingly simple development process lies a groundbreaking technological innovation.

The “Triad Paradox” of Consensus Mechanisms

Anyone familiar with blockchain knows this contradiction: Bitcoin uses Proof of Work (PoW), which is highly decentralized but consumes enormous energy and is inefficient; traditional Byzantine Fault Tolerance (BFT) consensus is efficient with low latency but prone to centralization.

This is the “Impossible Triangle” in consensus mechanisms—decentralization, low energy consumption, and high efficiency—traditional solutions can at most achieve two of these.

Avalanche’s Breakthrough

Avalanche protocol combines the advantages of two consensus mechanisms, introducing a repeated random sampling validation method, achieving breakthroughs in nearly all three dimensions:

In addition to the innovation in consensus mechanisms, Avalanche also adopts a three-chain parallel architecture:

• X-Chain (Exchange Chain): Handles virtual currency transactions and issuance
• P-Chain (Platform Chain): Manages validator nodes, governance, and subnet creation
• C-Chain (Contract Chain): Responsible for deploying and interacting with smart contracts

Each chain has its own responsibilities, greatly improving overall processing speed and avoiding congestion on a single chain.

Technical performance of AVAX in practice

Talking theoretically is easy; actual operation is the true test of truth.

As of January 6, 2026, AVAX’s fundamental data are as follows:

• Current Price: $14.48
• Circulating Supply: 430 million tokens (circulation rate about 59.75%)
• Market Cap: $6.23 billion
• Global Crypto Asset Rank: Top 20
• Number of Holder Addresses: 118,649

This price has seen a significant correction from the mid-2025 high (around $75). What’s the reason?

The logic behind price fluctuations

Tracing AVAX’s historical market trends reveals clear cyclicality:

Initial Exploration (2020-First Half of 2021): From an initial price of $4.9 down to a low of $1.9, then rebounded strongly to $30, a 900% increase.

First Major Bull Run (July 2021): From $10 soaring to around $120, a gain of over 1200%, near the all-time high.

Prolonged Correction Period (2022-2023): Fluctuated repeatedly between $10-$30, hampered by global liquidity tightening and a crypto bear market, lacking strong upward momentum.

Rebound and Surge in 2024-2025: Post-2024, AVAX gradually rose above $30-$40, aided by inflows into Bitcoin spot ETFs and Avalanche ecosystem expansion. Early 2025, with the crypto market warming, AVAX climbed from $40, breaking $60 in February, and reaching a yearly high of $75 in April after a major upgrade with Hyper SDK.

Current Adjustment: Early 2026, under profit-taking pressure, AVAX retreated to around $14. This decline looks alarming, but in the context of the overall crypto market environment, such deep correction is not unreasonable.

The underlying strength of AVAX

Many tokens gain temporary popularity through marketing and hype, but projects that survive long-term rely on real team strength and ecosystem development.

Founding Team: The three founders—Emin Gün Sirer, Kevin Sekniqi, and Maofan Yin—come from distributed systems backgrounds. Emin was a computer science professor at Cornell University, with deep expertise in algorithms and network systems. Such technical pedigree is crucial for the long-term development of a public chain.

Funding Support: AVAX received recognition from institutional investors early on, with seed funding of $6 million in 2019, a public offering of $42 million in 2020, and $230 million in 2021. Continuous capital support has provided ample operational space for the project.

How vibrant is the ecosystem?

By the end of 2025, Avalanche’s ecosystem had gathered approximately 559 projects across DeFi, gaming, NFTs, RWA (Real World Assets), and other fields.

The DeFi sector is the most active, with 134 projects including AAVE, Benqi, GMX, Trader Joe, and more. Data shows:

• Avalanche TVL: about $1.51 billion
• Daily Active Users: 180,000–200,000
• Ethereum Benchmark: TVL of $61.76 billion, daily active users of 750,000

This comparison shows that while Avalanche’s scale is still much smaller than Ethereum’s, its ecosystem expansion is not slowing down. Especially in RWA and institutional-grade DeFi, Avalanche is making breakthroughs—areas widely regarded as future growth points for crypto assets.

AVAX’s advantages and risks

Core Advantages:

1. Fast transaction confirmation—2 seconds, a qualitative leap over Bitcoin’s 1 hour and Ethereum’s 6 minutes
2. Extremely low gas fees—average only $0.05–$0.3, far below Bitcoin’s $2–$15 and Ethereum’s $1.5–$5
3. High security threshold—requires 80% of nodes to maliciously attack, compared to 51% for Bitcoin and Ethereum

Potential Risks:

1. Centralization concerns in token distribution—large holders like the team, foundation, community funds, and strategic partners account for over 30%. While nominally different entities, actual control remains to be observed.
2. Project youth and lack of experience—launched mainnet only in 2020, lacking the test of a bear market; technical stability needs further validation (notably experienced a network halt in February 2022).

Outlook for 2026 and beyond

From a technical perspective, Avalanche has a solid foundation; from an ecosystem perspective, DeFi and RWA are accelerating. But whether the current price of $14.48 can form a long-term bottom still requires further market confirmation.

Key points to watch:

• Whether upgrades like Hyper SDK can continue to boost ecosystem activity
• Progress in commercial applications of RWA
• Changes in macro liquidity environment

If the crypto market enters a new bull run and Avalanche’s ecosystem continues to expand, triple-digit prices are not just a dream. But investors should also be aware of systemic risks—no matter how strong the technology, shifts in macro policies and market sentiment can instantly change the trend.

For those interested in AVAX, it’s recommended to thoroughly understand the technical details of the Avalanche protocol and ecosystem development, rather than simply chasing high prices. The biggest mistake in blockchain investing is focusing only on price without paying attention to fundamentals.