What is AVAX?
- AVAX is the token underlying the Avalanche network. It is used, amongst others, to pay for transactions on the network.
- It is also newly minted for AVAX holders who lock-up their tokens in the protocol for a specific time period to enhance network security in a mechanism called “staking”.
- If the demand for the Avalanche network increases, demand for AVAX will also increase, which might work out positively on the AVAX price
- The total amount of AVAX that can be minted has a hard cap of 720 million
- Fees paid to use the network are “burned,” meaning they are removed from circulation. This creates a natural, deflationary curb on supply growth, while also propagating a more equitable system where validators do not exponentially grow their holdings.
Throughout this page we will mostly use the term Avalanche to refer to AVAX, as this is most commonly used by most investors. I.e., when we say investing in Avalanche we refer to investing in AVAX.
Source: Ava Labs.