Date analyzed: 28th June 2022

Introduction

Avalanche is a layer 1 blockchain that boasts low transaction fees and fast speeds. Unique selling points include its focus on increasing the scalability of Ethereum, decentralized application developments and ease of bridging Ethereum assets to Avalanche through the Avalanche bridge.

In this analysis, we analyze the block and transaction performance of Avalanche from a high-level, looking specifically at:

• transaction throughput (i.e. transactions per day, transactions per second)
• block formation (i.e. block times)
• transaction costs (i.e. gas fees)

Methods

For this analysis, I used the following tables:

• avalanche.core.fact_transactions
• ethereum.core.fact_transactions

To characterise Avalanche's performance, this analyses uses the following metrics (with associated definition):

• Transactions per day: calculated by summing the number of transactions grouped by day.
• Transactions per second: calculated by counting the number of transactions per second (TPS), and averaging the TPS across an hour.
• Block length: time between blocks is the time between the start of a given block and the start of the next block.
• Gas fees: the cost of gas denominated in gwei (a billionth of 1 AVAX)
• Transaction fees: the cost of a given transaction (gas used * gas price, divided by 10^9)

For the Avalanche dataset (where the Flipside Avalanche table is not yet complete), all time periods were included in this analysis. For a comparison to Avalanche within the same time frame, Ethereum's dataset was filtered to only include data from 30th May 2022 onwards.

Results

(1) Transaction throughput on Avalanche

A pain point of Ethereum Mainnet is scalability, where - due to the low transactional throughput - only limited transactions can be made per day; this in turn drives competition for block space, leading to high gas fees.

Avalanche promises to increase the scalability of Ethereum through implementation of alternative consensus mechanisms (i.e. metastable consensus protocols such as Snowflake). To see how this has played out, we first look at the number of transactions performed on Avalanche per day, and compare these values to Ethereum mainnet's. We see that, in the month of June 2022, Avalanche's transactional throughput was around >200k transactions per day, compared to Ethereum's nearly 1 million transactions per day. When calculated as a percentage, Avalanche's transactional throughput is most recently operating at around 20-25% of Ethereum's. This might represent lower economic bandwidth (i.e. fewer users are using Avalanche than Ethereum) rather than reflecting on Avalanche's technological capability.

Conclusions

• Avalanche is operating at slightly over 200k transactions per day, which is 20-25% of Ethereum's transactional throughput.
• Avalanche's tps is 4-6 per day, which is below the often-quoted speed of 4500 TPS that Avalanche is purported to support.
• Block demand is lower on Avalanche compared to Ethereum, where the average number of transactions per block is much higher on Ethereum mainnet compared to that on Avalanche
• Avalanche's average gas prices and transaction fees have surged during certain time periods (perhaps owing to Avalanche's hardcap of gas); however, Avalanche's gas prices and transaction fees are still >99% cheaper compared to those seen on Ethereum mainnet.

(3) Gas price over time on Avalanche

# (2) Block formation on Avalanche

Transactions are ordered in a sequence within a block to form the blockchain. The block time is the time it takes to produce a block, and blocks have a limited number of transactions they can contain. We next look at these block characteristics on Avalanche.

First, the minimum and maximum number of transactions per block was 1 and 203, respectively.

Furthermore, Avalanche boasts the ability to support speeds exceeding ~4500 transactions per second. How have recent TPS values compared to this limit?

We see that recent TPS on Avalanche have been far below this target TPS: ranging between 4 - 6 TPS, corresponding to over 400k transactions per day. Furthermore, there are periods when no transactions were conducted, for example between May 30th and June 5th - this may be artefactual as the Flipside table is in 'lite mode' (i.e. historical data has not yet been backfilled). Nevertheless, these data indicate that Avalanche still has some way to go in exceeding Ethereum mainnet's transactional throughput as well as reaching its promised upper TPS limit.

We next compare the average number of transactions per block in Avalanche vs. Ethereum mainnet.

While Avalanche had - on average - 5.9 transactions per block, Ethereum had over 140 transactions per block. This explains why gas fees are particularly high on Ethereum mainnet, where competition for blockspace is much higher; furthermore, these data highlight that Avalanche still has some ways to capture the same economic bandwidth (i.e. demand for block space) that Ethereum currently enjoys.

Finally, we look at block times per day on Avalanche, here defined as the time interval between the start of the first block and the start of the next block. In the plot below (note the log scale on the y-axis), we see that early on in June 2022, block times were particularly long (sometimes nearly 2000 seconds or >30 minutes long) - this again may be artefactual due to the lite version of the Flipside table. Towards the end of June 2022 and more recently, the average block time is around 2 seconds.

Thus far, we have seen that:

• Avalanche is operating at 20-25% of Ethereum's transactional throughput
• Avalanche's tps is 4-6 per day, well below its upper limit of 4500 tps
• Block demand is lower on Avalanche compared to Ethereum

Another selling point of Avalanche that is often touted is its lower transaction fees compared to Ethereum. However, gas fees have periodically surged to very high levels, and this is thought to be due to Avalanche's 10 million hard cap on gas applied every 10 seconds (which, in particularly busy times, might send gas fees sky high as limited gas is consumed by high transactional throughput).

To analyze gas fees and transaction fees over time, here we see the average gas and transaction fees over the last month. Gas price - denominated in gwei (a billionth of 1 AVAX) - has periodically surged in mid-June; this was the same for transaction fees (denominated in AVAX).

Notably, at today's current price of 1 AVAX = 0.016 ETH (as at 0322 UTC, 28th June 2022), the transaction fees on Avalanche are >99% cheaper compared to Ethereum's transaction fees.