Avalanche (AVAX)

What is Avalanche?

Avalanche is an open-source platform for launching decentralized applications and enterprise blockchain deployments in one interoperable, highly scalable ecosystem. Avalanche is a EVM compatible decentralized smart contracts platform built for the scale of global finance, with near-instant transaction finality. Ethereum developers can quickly build on Avalanche as Solidity works out-of-the-box.

Proof of Stake

There are actually three sub-chains on the Avalanche network - The Exchange Chain (X-Chain), the Platform Chain (P-Chain), and the Contracts Chain (C-Chain). P-Chain is the platform chain that manages metadata in the Avalanche network, such as staking.

When a validator is done validating the Primary Network, it receives back the AVAX tokens it staked. The validators will also vote on whether the leaving node should receive a staking reward for helping to secure the network.

A validator will only receive a staking reward if they are online and response for more than 80% of their validation period, as measured by a majority of validators, weighted by stake.When a node leaves the validator set, the validators vote on whether the leaving node should receive a staking reward or not.

Staking

You will have to transfer your AVAX onto P-Chain to start staking. When you hold assets in a P address, you make them illiquid. You will not be able to freely move your assets into your X address, and you cannot transfer them to another P address. To move assets from one P address to another, you have to send them back to your X address and then send them to another P address.

Users must have 25 AVAX to delegate/stake in the wallet, the minimum amount of time one can stake funds for validation is 2 weeks for a lock-up period. The delegation fee set by validators is the portion of the rewards that are paid to the validators. The minimum delegation fee is 2%. However, there is no slashing on Avalanche, staked tokens are never at risk of loss due to poor validator performance.

Rewards

AVAX rewards earned from staking are handled on the protocol level, and rewards will automatically be transferred to you once they are earned.

Unstaking

Staked tokens are locked for the pre-defined staking period. This predefined staking period must be a minimum of 2 weeks for validation and can go up to 1 year.

All validation and delegation rewards are credited to your selected destination wallet address upon completion of the staking period.