Avalanche Pays Premium to Incentivize Validators, Will AVAX Soar To $145? - ADVFN

Gold vs US Dollar

Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.

Get Started

Name	Symbol	Market	Market Cap ($)	Algorithm
Polkadot	DOTUSD	Crypto	9,024,550,413	Not Mineable

	Price Change	Price Change %	Current Price	Bid Price	Offer
	0.030	0.44%	6.78	6.78	6.78

High Price	Low Price	Open Price	Prev. Close	52 Week Range
6.81	6.71	6.75	6.75	3.56 - 12.01

Exchange	Last Trade	Size	Trade Price	Currency
GDAX	07:23:47	1.11	6.78	USD

Price x Volume	Volume	Base Symbol	Related Pairs
672,374.42	99,676.86	DOT	DOTEUR	DOTGBP	DOTBTC

Avalanche Pays Premium to Incentivize Validators, Will AVAX Soar To $145?

08/12/2023 12:00am

NEWSBTC

Avalanche, the fourth-generation proof-of-stake (PoS) blockchain, incurs significant costs to incentivize its validators. Token Terminal data on December 7 shows that in the past year, the smart contract platform paid over $275 million in AVAX to compensate its validators despite generating only $11.5 million in user fees. Avalanche Is Paying A Premium To Incentivize Validators Although it appears that Avalanche is paying a premium for validators, this is critical in securing the network and ensuring all transactions are confirmed. Overall, and being a proof-of-stake network reliant on node operators for security and decentralization, Avalanche’s decision to pay validators a premium is, as its users demand, to maintain a robust network of nodes. Related Reading: Bitcoin Shakeout Drives $190 Million In Losses For Over 81,000 Traders According to CoinMarketCap data, the network has a market cap of over $9.8 billion. It is currently in the top 10 by liquidity, surpassing Polygon and Polkadot, competing low-fee alternatives. As it is, by incentivizing validators with generous rewards, Avalanche ensures that there is a strong pool of nodes available to maintain the network’s operation. Through these validators, AVAX holders can stake and receive rewards. As of December 7, there are over 1,539 validators currently staking over 248 million AVAX and earning 7.84% APY. At the same time, statistics show that Avalanche has a staking ratio of 57.11%. Most AVAX in circulation are used to secure the network at this level. While AVAX incentivization might draw more validators, Avalanche documentation also states that the network doesn’t require complex hardware to operate a node. At the same time, the blockchain, unlike Ethereum, states that staked AVAX is not at risk of being slashed–or penalized by the network–provided all network requirements are met. This feature could explain the steady rise in validator count over the past three years. AVAX Is Up By 200%, Trading At 2023 High While Avalanche grows its validator count, AVAX prices have also been expanding steadily, mirroring the general market. Thus far, AVAX is changing hands above $26, up over 200% in the last three months. At spot rates, AVAX is trading at new 2023 highs and in a bullish breakout formation, looking at price action in the daily chart. Related Reading: Apollo Crypto Predicts Bitcoin Price Of $200,000 This Cycle, Here’s Why Looking at how AVAX is, bulls might break above $30. If the accompanying surge is with expanding trading volume, it might be the base for another leg up that might lift the coin toward $90 or higher in the sessions ahead. When AVAX peaked in 2021, it rose to as high as $145. Feature image from Canva, chart from TradingView

1 Year Polkadot Chart

1 Year Polkadot Chart

1 Month Polkadot Chart

1 Month Polkadot Chart

Delayed Upgrade Clock

Support: +44 (0) 203 8794 460 | support@advfn.com

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions