Since its invention, Blockchain’s most transformative possibilities have always seemed to belong to the future, to a time several years and tech advances away. Today, this has changed. Avalanche has taken the necessary tech leaps and is now making once-unattainable use cases a reality. Using Avalanche, even the largest institutions can finally build their dream Web3 projects.
Thanks largely to two major breakthroughs — Avalanche Consensus and Subnets — Avalanche has the speed, security, reliability, flexibility, and scaling to power institutional Web3 apps serving millions of users. In fact, Avalanche is now or will soon be the foundation for institutional Web3 projects in fields including finance, insurance, payments, vehicles, entertainment, culture, and many more. Despite the crypto market downtown, many executives are more bullish on Avalanche now than ever.
What makes Avalanche such a powerful platform for institutions? And what transformative projects are the enterprises leading the charge into Web3 building on Avalanche now?
Let’s take a closer look.
What Makes Avalanche a Powerful Platform for Institutions?
Speed and Security
Avalanche is the fastest smart contract platform by time to finality. You don’t wait for transactions to finalize. They finalize faster than your browser can refresh the balance, meaning you can move on to the next thing instead of waiting for funds to arrive. This speed is only possible through Avalanche Consensus, a method of sub-sampling of validators that marks just the third consensus mechanism in the field of distributed systems, and the first major breakthrough since Satoshi Nakamoto introduced Bitcoin to the world. Further, Avalanche Consensus enables decentralization of network security on a mass scale, already reaching more than 1,400 validators in less than two years. Each of these validators participate in block production, rather than a small subset of mining pools or network-defined leaders to gather votes.
Scaling and Customizability
Subnets are Avalanche’s other revolutionary breakthrough. Launched in spring 2022, Subnets are app-specific Avalanche blockchains that institutions can customize to their needs, tailoring economics, gas fees, VMs, and compliance with laws or KYC. These empower the network to scale infinitely and applications built on the network to scale on-demand. Subnets eliminate traffic jams, delays, and the fee spikes seen on monolithic blockchains.
Low Barrier to Launch
Any institution, developer team, or individual person can launch their own Subnet. It takes as little as 12 hours. Subnets get their speed, security, and reliability from Avalanche’s Primary Network. For more, read our intro to Subnets post.
How Are Institutions Building on Avalanche?
The accounting firm Deloitte is using Avalanche’s technology to accelerate disaster recovery. The program, Close As You Go, simplifies and streamlines FEMA Public Assistance payments to state, local, and select non-profit groups that spend funds preparing for or responding to natural disasters. Close As You Go uses Avalanche technology to improve security, minimize waste and fraud, and maximize trust between all parties.
The reimbursement process has many steps, strictures, and actors. Parties submit applications to FEMA for reimbursement. They must show eligibility, that they have legal jurisdiction, that their expenditures are reasonable, and more. Using Avalanche to track applications and show exactly where each one stands at any given time creates certainty. This is because Avalanche provides heightened security. Data recorded by the network is tamperproof. Avalanche also helps automate the application process.
But why Avalanche and not another blockchain? Deloitte has cited Avalanche’s transaction speeds and Ava Labs’ fluency with how blockchain fits into enterprise software. Deloitte also calls out Avalanche’s eco-friendliness, which aligns with the firm’s commitment to sustainability.
Due to limitations of traditional insurance, many farmers across the world are uninsured. Lemonade, a full-stack insurance carrier that operates in the U.S. and parts of Europe, will be providing insurance to farmers in the developing world using a platform that leverages Avalanche.
To do this, Lemonade will be using Web3 components. Smart contracts will replace traditional insurance policies. Oracles that can feed information like real-time weather data will replace claims professionals. Farmers will make crypto payments for “policies” using Avalanche. The system will be permissionless. Insurance will be provided through a DAO, The Lemonade Crypto Climate Coalition.
The DAO will begin by offering flood insurance in Nigeria. It has plans to expand to other parts of the developing world. With the help of a fast, reliable blockchain and Chainlink price oracles, the cost of insurance is reduced, and some of the world’s most vulnerable people will gain protection.
Togg, the leading Turkish electric vehicle manufacturer, will be utilizing Avalanche to bolster its new Mobility Initiative with smart contracts and create more seamless functionality than other electric vehicles.
Avalanche helps achieve this goal in many ways. The network will help drivers facilitate payments. For instance, if a driver needs a taxi or scooter while charging their vehicle, they can pick up and pay with the help of Avalanche. Once the Togg-Avalanche integration goes live, drivers will be able to pay for parking spots using Avalanche. Additionally, Smart contracts will facilitate Togg’s use of machine-to-machine learning and IOT (Internet-of-Things).
The benefits of incorporating Avalanche extend beyond mobility. Togg will also use the platform to store car maintenance and parts data, a valuable log for owners and, perhaps down the road, new buyers on the secondary market.
Ava Labs is collaborating with Jump Crypto, Valkyrie, Securitize, Golden Tree Asset Management, Wintermute, and others to launch a Subnet specifically tailored to Institutional DeFi with native KYC.
The rise of DeFi (Decentralized Finance) is giving everyday people new ways of earning income and interest, including through staking, loans, yield farming, and liquidity mining. But the demand for DeFi has often outpaced the blockchain industry’s ability to provide a smooth, consistent, and affordable user experience with transaction fees on some chains exceeding the amount that would be gained from a transaction.
This is especially true when the often discussed, but slow moving trend of financial institutions accessing DeFi as part of their strategies. Simply put, institutions will not access services on-chain if they cannot rely on the chain. Looking ahead, accessing DeFi should just be the beginning, as the move to provisioning services to clients and creating on-chain applications of their own that capitalize on their unique position.
With Subnets, Institutions can fully customize their own Avalanche blockchain to their application’s needs and build DeFi products scalable to millions of users. Crucially, Subnets enable these institutions to encode who can access the Subnet, who secures it, and various other regulatory mandates so compliance is built into its very foundation.
Finally, institutions can meaningfully participate in on-chain DeFi.
Want to Build on Avalanche?
Interested in learning more or building on Avalanche? Reach out to an Ava Labs team member. Again, it takes as little as 12 hours to launch an Avalanche Subnet. Yours could be live soon!
Avalanche is the fastest smart contracts platform in the blockchain industry, as measured by time-to-finality. Avalanche is blazingly fast, low cost, and eco-friendly. Any smart contract-enabled application can outperform its competition by deploying on Avalanche. Don’t believe it? Try an app on Avalanche today. https://www.avax.network/
Provided for informational purposes only, without representation, warranty or guarantee of any kind. None of this is as an endorsement by the Avalanche Foundation Limited, Ava Labs, Inc. or any of their respective subsidiaries or affiliates, nor is any of this investment or financial advice. Please review this Notice and conduct your own research to properly evaluate the risks and benefits of any project.
Institutions Are Building the Future with Avalanche was originally published in Avalanche on Medium, where people are continuing the conversation by highlighting and responding to this story.