AVA Labs, the first project building on the “Avalanche protocol” blockchain network, is looking to modernize financial infrastructure.
As first envisioned in a 2018 white paper by the pseudonymous “Team Rocket,” Avalanche protocol uses random network sampling to reach consensus. But it is AVA Labs’ ambition in building new infrastructure for the financial markets that now drives the firm forward.
The new platform could have special value for financial infrastructure and applications, not just in decentralized finance (DeFi) but for Wall Street firms, too, said AVA co-founder Kevin Sekniqi. That’s why the team decided to base itself in Brooklyn, N.Y., instead of the more tech-savvy Bay Area in California, where Sekniqi admits AVA Labs’ “hackers and engineers at heart” might fit in more naturally. AVA open sourced its initial codebase on March 11.
AVA is now looking to move even closer to New York’s financial gearworks. Sekniqi has tentative plans to abandon its current Brooklyn HQ in favor of offices within striking distance of the Financial District in lower Manhattan, where physical proximity to banks, brokers and firms can raise awareness of the product.
“We’re going to have a big push in the financial sector, so we’re going to need to meet with a lot of people in that area, downtown in FiDi,” Sekniqi said.
He said those meetings could go a long way to getting institutions to take blockchain solutions more seriously. Too often there’s a breakdown in messaging in which institutions do not see the value of blockchain because they do not see how it solves their business “pain points” in digitizing assets.
“Everything is lacking right now, primarily in technology,” Sekniqi said.
The open-source Avalanche
AVA is still in the process of building its first network. To that end, it released the codebase for the Avalanche protocol earlier this month, fleshing out the technical elements for an ecosystem AVA’s founders hope will challenge the supremacy of other leading consensus families.
The launch gives the developer community a look at AVA Lab’s multiyear effort to piece together a workable source code for Avalanche.
Avalanche’s random sample method presents a significant break from two popular consensus families: Nakamoto, the proof-of-work model behind Bitcoin, and “classical,” which uses majority vote. Proponents say Avalanche takes the best of both protocols while detractors scoff at what they deem a lesser derivative.
“We’ve been hearing from people that they want much more scalable, much faster consensus protocols,” Sekniqi said, comparing Avalanche’s protocol to Cosmos.
For its part, AVA’s leaders are betting Avalanche has the potential. Running on $6 million funding from a 2019 venture capital round, the 30-person team has been building out their mainnet backend, developing a system Sekniqi says could be the “seed” for a new generation of projects and dApps.
“It’s a much better foundation for building blockchain platforms,” Sekniqi said. He admits his pro-Avalanche bias.
“Our end goal here is we want to be the platform on which all assets are issued, we really want to encompass DeFi and much more broadly alternative assets,” he said. “We’re taking a very long-term approach to this.”