Avalanche, a new blockchain platform built around research first conducted at Cornell, raised $42 million in less than five hours during the first public sale of its digital currency token, held July 15.
Emin Gün Sirer, associate professor of computer science, is co-founder and CEO of Ava Labs, the company behind the project based on the Avalanche consensus protocol – a new mechanism for efficiently verifying and securing blockchain networks without significant energy expenditure, centralization or performance degradation.
Blockchains are decentralized systems that allow records to be stored on a network, visible to and verifiable by other users on the network, rather than owned by a central organization such as a bank or financial institution.
Experts hail blockchain’s potential to transform finance and other industries – partly through smart contracts, which run on blockchains and execute actions automatically based on the contract terms. Blockchains are intended to be more transparent, secure and corruption-proof than traditional methods, but computer scientists have found vulnerabilities in existing platforms.
“Avalanche is built on the first major breakthrough in decentralized systems since Satoshi Nakamoto released the first bitcoin white paper in 2008,” said Sirer, referring to the pseudonymous programmer who created bitcoin – a digital currency based on blockchain technology.
Since then, Sirer said, proposed new blockchain networks have either copied bitcoin’s model or relied on outdated and flawed designs.
“Avalanche avoids these pitfalls by embracing a new family of consensus protocols to empower performance only dreamed of in the last 40 years of research,” he said.
According to its founders, Avalanche is the first smart contracts platform that performs transactions in less than 1 second, supports Ethereum – the second-largest cryptocurrency after bitcoin – and enables millions of producers of blocks, or nodes.
The AVAX token – 72 million of which were offered for sale in July – is the native token of the platform and used to secure the network, pay for fees and provide a basic unit of account across the Avalanche system.
This marked the first public sale for the company, which formed after an anonymous group of researchers known as Team Rocket published a white paper outlining Avalanche in 2018. At the time, Sirer and then-doctoral students Maofan “Ted” Yin, M.S. ’19, and Kevin Sekniqi, Ph.D. ’20, were pursuing similar lines of research.
Their products are also partly based on research co-authored with Robbert van Renesse, professor of computer science.
The project was the first occupant of the Praxis Center for Venture Development and now employs nearly 40 people worldwide, around 25% of whom are Cornell alumni or current students. Maureen O’Hara, the Robert W. Purcell Professor of Finance in the Samuel Curtis Johnson Graduate School of Management, is one of the company’s advisers.
“Cornell is the academic home to blockchains and cryptocurrencies, and it’s hard to imagine Avalanche without it,” Sirer said. “In addition to the immense talent and passion for solving big challenges that is deep-rooted in the Cornell community, the university has been exceptionally supportive of our team and vision.”