Polkadot Vs. Avalanche – Which Blockchain Will Triumph As More Successful?

Last updated on July 21st, 2023 at 09:07 pm

In this article we examine the cryptocurrencies Polkadot vs. Avalanche to find out all of the differences as both are looking to achieve blockchain interoperability through different methods. If you are thinking about investing Polkadot or Avalanche, this article is here to help you.

Interoperability

Blockchain interoperability is the ability for blockchain systems to communicate with each other in a coordinated way in order to access information and process transactions without the need for an intermediary (like a centralized exchange).

There are thousands upon thousands of cryptocurrency projects listed on both CoinMarketCap and CoinGecko. This number continues to increase with more blockchains projects popping up and new applications such as DeFi, there is growing need for these protocols to easily communicate with each regardless of what blockchain or cryptocurrency they use.

This is no easy task, ultimately though, for cryptocurrencies to become mainstream – interoperability is needed. Two projects set out to solve this problem, Polkadot and Avalanche.

Polkadot (DOT), founded in 2016 by Dr. Gavin Wood, aims to enable cross-blockchain transfers of any data or asset, not just tokens, but even traditional finance. It can be thought of as a “scalable heterogenous multi-chain” ¹, or an ecosystem of independent blockchains.

The core part of Polkadot is the central chain which is called the Relay Chain, responsible for the network’s security, consensus and cross-chain interoperability. Blockchain shards (called Parachains) are connected to the Relay Chain via bridges and run in parallel. These can be other Blockchains such as Ethereum or Bitcoin, or even traditional finance classes. See Figure 1 below:

Figure 1 – Polkadot Network Diagram ²

Avalanche (AVAX), founded in 2019 by Emin Gün Sirer, promises to be a cross-blockchain, high-performance platform that can be scaled and customized as needed. AVAX uses a multi-chain framework with three blockchains to perform the tasks required. It aims to become the “Global Internet of Assets”.

Instead of Parachains, Subnets (sub networks) are used by AVAX to create and deploy interoperable networks of various blockchains.

Virtual Machines (VMs) are used to create instances of these blockchains such as the Ethereum Virtual Machine (EVM). Finally, the Contract (C) Chain, is responsible for executing these VMs. Like Polkadot, Avalanche is also able to connect to other systems through bridges. See Figure 2 below:

Figure 2 – Avalanche Network Diagram ³

Fundamentals

Tokenomics

The Tokenomics of both projects are slightly different with Polkadot opting for a larger current total and circulating supply with 1,154,591,255 tokens currently circulating at a current price of $4.91, and a total supply of 1,270,814,926 tokens. ⁴

Avalanche currently has 311,582,143 AVAX tokens circulating at a price of $12.51, and a total supply of 416,988,133 tokens. This puts the the total number of of DOT approximately 3 times that of AVAX, at the time of writing. Which means AVAX is the rarer of the two, coinciding with the current higher price. ⁵

Team

One of the key fundamental assets that people look for when investing in new projects is the team.

Polkadot’s team is very strong. Led by Ethereum co-founder and former CTO Gavin Wood (also the man who developed Solidity), it also includes the likes of Peter Czaban, who is the Technology Director of the Web3 Foundation and Robert Habermeier, who has a good background in blockchains, cryptography and programming. ⁶

Avalanche’s team consists of Emin Gün Sirer who is a Professor of Computer Science at Cornell University and is well-known for implementing the first Proof-Of-Work cryptocurrency called Karma, back in 2003. The team also includes John Wu who brings over 20 years experience as a fintech executive, currently the CEO of Sureview Capital. Maofan “Ted” Yin and Kevin Sekniqi complete the team with programming experience with big names such as Microsoft. ⁷

Transactions Per Second

Unlike Ethereum, where transactions are competing for the entirety of network resources in order to be processed, each node on these two protocols is able to process transactions independently.

Polkadot’s current transaction speed is 1,000 transactions per second (TPS).

Meanwhile the current testnet benchmarks of Avalanche have reported over 4,500 TPS per subnet, with no limit on the number of subnets that can be used.

Scalability

However, it is expected that both protocols will be able to scale further in the future with multithreading and new technologies.

For Polkadot, the current limit of Parachains is 100, though this can be increased in the future if needed. On September 26, 2022, it announced that it had a new technique called ‘asynchronous backing’, which allows parachains and the relay chain to build block concurrently. Effectively this will decrease the parachain block time from 12 to 6 seconds, and increase the amount of block space available to each block five to 10 times. This update will increase the network speed to between 100,000 and 1,000,000 TPS. ⁸

In addition to this it was announced that parathreads are scheduled to be ready within the first half of 2023. Parathreads have the exact same API and functionality as parachains, but on a “pay as you go” basis. These will be a powerful addition to Polkadot as they increase the number of applications that can operate on Polkadot by pooling them to share parachain slots. Parathreads operate much the same as Parachains but are useful for applications that have more reads than rights, and don’t need to transact on the chain often.

Figure 2 – Polkadot Network Diagram with Parachains ⁹

For Avalanche, each subnet is it’s own independent entity with its own execution thread. This ensures that they do not compete for mainnet computational resources and protects the network from overloading, collapses, and even fee spikes during periods of high transactions. This system allows for an unlimited number of subnets and ensures that transaction speed per second will be constant as the network grows.

Avalanche’s final product is aiming to support over 20,000 TPS per subnet. ¹⁰

Adoption

In total, on LinkedIn there are 138 people worldwide that are make up the Polkadot team whilst Avalanche consists of 97 employees. ¹¹,¹²

Currently, Polkadot is more widely adopted with around 550 projects ¹³ building on it, though Avalanche has been fast catching up with around 478 projects. ¹⁴

Features

The full comparison of the two protocol’s features can be seen below:

Table 1- Features Comparison

Polkadot vs. Avalanche Conclusion

Polkadot Final Score:         91/100

Avalanche Final Score:       92/100

Winner: Avalanche

The winner here is Avalanche by a small margin. However, It is too early to tell whether Polkadot or Avalanche has more potential and will be adopted over the other, both are very promising, have experienced teams and are addressing the problem of interoperability in a slightly different way. Polkadot has some very interesting upcoming developments in the works and had the first-mover advantage. On the other hand, Avalanche currently is capable of more transactions per second, and has been fast catching up to Polkadot in terms of adoption.

One thing is for sure, the competition is healthy.

Where can I trade Polkadot or Avalanche?

Register on Binance: https://accounts.binance.com/en-AU/register?ref=11170816

Register on Kucoin: https://www.kucoin.com/ucenter/signup?rcode=83utst

References

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2. Laboon, B. (2020). Polkadot Wiki. Getting Started. [ONLINE]. Retrieved 16 October, 2020, from: https://wiki.polkadot.network/docs/en/getting-started
3. Ava Labs. (2020). Avalanche 101: An Overview of the Internet of Finance. [ONLINE]. Retrieved 16 October, 2020, from: https://medium.com/avalabs/avalanche-101-an-overview-of-the-internet-of-finance-7
4. CoinMarketCap. (2023). Polkadot. [ONLINE]. Retrieved 11 January, 2023, from: https://coinmarketcap.com/currencies/polkadot-ne
5. CoinMarketCap. (2023). Avalanche. [ONLINE]. Retrieved 11 January, 2023, from: https://coinmarketcap.com/currencies/avalanche/
6. Polkadot. (2023). Founded by some of the blockchain industry’s foremost builders. [ONLINE]. Retrieved 11 January, 2023, from: https://polkadot.network/about/
7. Ava Labs. (2023). The Ava Labs Team. [ONLINE]. Retrieved 11 January, 2023, from: https://www.avalabs.org/team
8. Adejumo, O. (2023). Polkadot looks to 10x transaction speed in new updates. [ONLINE]. Retrieved 11 January, 2023, from: https://cryptoslate.com/polkadot-looks-to-10x-transaction-speed-in-new-updates/
9. Petrowski, J. (2019). Parathreads: Pay-as-you-go Parachains. [ONLINE]. Retrieved 11 January, 2023, from: https://polkadot.network/blog/parathreads-parathreads-pay-as-you-go-parachains/
10. Ava Labs. (2020). Avalanche 101: An Overview of the Internet of Finance. [ONLINE]. Retrieved 16 October, 2020, from: https://medium.com/avalabs/avalanche-101-an-overview-of-the-internet-of-finance-7
11. Polkadot. (2023). LinkedIn. [ONLINE]. Retrieved 11 January, 2023, from: https://www.linkedin.com/company/polkadot-network/
12. Avalanche. (2023). LinkedIn. [ONLINE]. Retrieved 11 January, 2023, from: https://sg.linkedin.com/company/avalancheavax
13. PolkaProject. (2023). PolkaProject. [ONLINE]. Retrieved 11 January, 2023, from: https://polkaproject.com/#/
14. avax-projects. (2023). Projects. [ONLINE]. Retrieved 11 January, 2023, from: https://www.avax-projects.com/