Why Avalanche?

That’s the question we keep being asked, why have we decided to launch on the Avalanche blockchain when other networks out there are more established and well known?

Why not on Ethereum, an L2, Solana or something else?

This post will break down our reasoning into four key points that will Context Finance grow into one of the leading DeFi projects of 2021.

Avalanche is Fast

With a capital F the Avalanche blockchain is fast. The Avalanche blockchain confirms transactions in less than a second with instant finality, something unheard of in a standard proof of work blockchain like Bitcoin and even compared with other byzantine fault tolerant proof of stake systems, it’s normal to wait for up to fifteen seconds for a transaction to be confirmed.

This foundation of speed is nice for advanced and new to DeFi users alike.

Avalanche is cheap

The gift that keeps on giving, you can make hundreds of transactions with 1 AVAX token, contrast that to Ethereum where just getting 1 Ether already locks millions of people in the world out of the opportunity.

More than the transaction cost being a function of native token price however, the Ava Labs team have been consistently rolling out improvements to the core gas pricing logic.

Quickly following Ethereum’s EIP1559 proposal, further tweaking is ensuring that the gas price will stay low even in times of absolute congestion.

Bridging

The next aspect we considered when setting up our fledgling protocol was how easily can funds flow in from other networks to Avalanche, as ultimately this is what will lead to our deep liquidity pools.

The official bridge built by the Ava Labs team is an incredible feat of custom engineering. Secured by an SGX enclave and multi sig of trusted signers, it ultimately doesn’t have the security guarantees of a truly trustless bridge, however the incredible UX has already lead to huge swaths of funds being bridged over from Ethereum mainnet.

Two more popular bridges, Anyswap and Allbridge, also already support Avalanche bridging from a variety of networks, and this was just the cherry on top to give us confidence that a lack of overall capital in the Avalanche ecosystem wouldn’t be an issue for Context.

Subnets

The big innovation pioneered by Avalanche, subnets will provide a framework for spinning up custom blockchains with their own unique characteristics. Imagine launching a private blockchain like ZCash while tapping into the consensus engine provided by Avalanche.

Conceptually distinct from the interchain vision pioneered by Cosmos, and more flexible than parachains being worked on by Polkadot, Avalanche subnets are the real vision for scaling a blockchain to the masses.

Already we see popular DeFi projects DyDx, Compound, Aave and more looking to extract themselves from the EVM to a more custom environment. We see Context following suit and Avalanche subnets are the answer to this pain in an extremely elegant fashion.

When the time is right, the Context subnet will allow for more efficient and uncongested trading.

Fin

That’s all for now, while this was a short post highlighting some of the benefits to launching a project on Avalanche, we purposely kept it brief so we can focus on shipping — our bonding UI will be live this week (meaning the snapshot of Context LPs eligible for the airdrop will be taken too).

For absolute clarity, one benefit touted by the Ava Labs team when launching on Avalanche is supposed MEV protection for users. While the fast block times do somewhat make value harder to extract, when you couple that with a non existent (or validator only gossiped) mempool, we believe miners will eventually take full advantage of whatever value is left on the table by network activity — for this reason we left it out of the list of benefits in this post. As the Avalanche experiment matures over the coming years and more data emerges, we’ll be able to definitively say whether or not there’s any weight to these claims.

Keep an eye out for our next Medium post where we’ll be highlighting some early community contributions we’ve received to help propel Context to the next level.