Custom Native Tokens
Learn how custom native tokens can be used in the Avalanche network.
In the Avalanche network, each Layer 1 (L1) blockchain has its own native token, which is used to pay for transaction fees (gas). This design isolates the gas fees on one blockchain from others in the ecosystem. For example, high transaction volume on the Avalanche C-Chain will not affect the transaction fees on a custom Avalanche L1 chain, giving developers greater flexibility in managing costs.
Custom Native Tokens: Unlocking Flexibility
Custom native tokens allow developers to design and control transaction costs and economic models within their blockchain. By managing gas fees and tokenomics, they can create a tailored system that fits the specific needs of their blockchain application.
- Isolated Fees: Custom native tokens ensure that each blockchain maintains its own fee structure, preventing external factors from impacting transaction costs.
- Tokenomics Control: Developers can design custom economic models that support their application's needs, from low-fee environments to systems that incentivize specific user behaviors.
Creating a Seamless User Experience with Native Tokens
Developers may want to provide a more streamlined, cost-free experience for users who are unfamiliar with the concept of paying for transactions. One approach to achieve this is to eliminate the burden of transaction fees for users by covering these costs through the native token itself. This can make interacting with blockchain applications feel more like traditional platforms, enhancing accessibility and ease of use.
Simplifying Blockchain Interaction
- Transaction Fee Subsidization: Developers can cover or significantly reduce transaction fees, ensuring that users can perform actions without directly incurring gas costs. This helps reduce friction for users and promotes engagement.
- Lowering Entry Barriers: By minimizing the complexity of gas payments, developers can attract a wider audience, especially users not familiar with blockchain technology.
Stabilizing Native Token Value
Some developers may want to ensure price stability for their native tokens, particularly if they need to maintain consistent transaction fees over time. Instead of issuing a token subject to market volatility, they can peg the value of the native token to an existing stable asset. This provides the dual benefits of isolated transaction fees with the predictability of stable pricing.
Maintaining Fee Consistency
- Stable Value Tokens: Tying the native token’s value to a stable asset (such as a stablecoin) ensures that transaction fees remain predictable, regardless of fluctuations in token supply or market demand.
- Predictable Costs: This model allows developers to maintain consistent, low-cost transactions, helping to avoid disruptions caused by price volatility in the broader crypto market.
Conclusion: Custom native tokens on the Avalanche network give developers the freedom to design blockchain economies that suit their project’s needs. Whether by managing gas fees for seamless user experiences or ensuring stable pricing through value-pegged tokens, custom tokens provide the flexibility required to build innovative and accessible blockchain applications.
