Ava Labs and Amazon’s partnership could “expand the pie” for blockchain

by · January 19, 2023

The Amazon Web Services (AWS)-Avalanche “collaboration,” as it was carefully described last week, should almost immediately make it easy for developers to establish nodes on the Avalanche blockchain, including via “one-click node deployment.”

Finally, it could also make it easier for everyday businesses – i.e. non-crypto-related businesses – and even individuals to establish their own subnets as smaller, private, layer-2 blockchains.

But perhaps the standout message from the January 11 announcement is that the blockchain revolution isn’t just about cryptocurrencies. It is also about such prosaic things as storing documents more securely and sensibly so that they can be retrieved quickly in an emergency. It encompasses decentralized finance (DeFi) and non-fungible tokens (NFT), but it’s also about bringing “scalable blockchain solutions to businesses and governments,” including such tough but important use cases as compliance management, Ava Labs, creator of Avalanche, so last week.

In a Jan. 12 webinar, which included both Ava Labs and Amazon Web Services representatives, Ava Labs vice president John Nahas explained: “Crypto products or crypto infrastructures have been very adapted to this point to accommodate crypto-native people. […] We need to expand the pie here. We need to expand the developers, the companies, the people who are going to use this technology in a mass market way to bring more people into this ecosystem.”

A “false partnership”?

The Avalanche community generally welcomed the Amazon Web Services news, but others took issue with some of the language and claims, such as Ava Labs CEO Emin Gün Sirer claim that “this is a big deal. It’s not your grandfather’s “AWS Partnership Announcement.”

Was this really a “partnership”, some asked, or just a hyped up “use of services” agreement? Perhaps Amazon Web Services was really more “technical aggregator” than partner? Hadn’t other tier-1 chain developers, like Casper Labs, already “collaborated” with the tech giant to allow developers to directly deploy node infrastructures or design private networks via Amazon? Developers had actually been invited to “set up your own managed Ethereum node” on the Amazon Managed Blockchain back in May 2021, right?

In a chirpingAlejandro Pastore, CEO of Pastore Capital, described the announcement as a “fake partnership between @avalancheavax and @amazon” where Ava Labs “sold us a service rental disguised as an association with Amazon.”

Be that as it may, the Jan. 12 webinar featured three Ava Labs executives, including president John Wu, who appeared alongside AWS global tech lead for Web3 Shai Perednik and Bradley Feinstein, Web3 lead at Amazon Web Services. Feinstein specifically used the word “partnership” to describe the new Ava-AWS union, and no one in attendance objected. AWS and Ava Labs will hold another joint webinar together in February and a jointly sponsored hackathon in May, they announced.

More important, perhaps, is a larger question: What, if anything, does this association mean for blockchain evolution in general?

Catalyzing innovation

“It looks like Avalanche will get the best shelf space on AWS among blockchain platforms,” ​​Matthew Sigel, head of digital asset research at VanEck, told Cointelegraph. Enterprises looking to launch blockchain-based applications from their AWS environment will get the best support and pricing if they choose Avalanche, Sigel further noted, adding:

“At a Twitter Spaces with AWS and Avalanche representatives, AWS committed to marketing, education and discounts for businesses launching Avalanche subnets within AWS.”

The collaboration could also have some positive industrial spin-offs, in Sigel’s view, catalyzing “meaningful innovation in the space.” Companies may now find it easier to launch permissionless blockchains faster and easier if Amazon Web Services becomes an active presence in this market.

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Amazon isn’t the only tech giant moving in this direction, either. “Remember that in November Google Cloud launched what looks like a similar partnership with Solana,” Sigel said. Given that so much computing has moved to the cloud, it’s “positive to see this kind of commitment from the big vendors.”

“The main news here is that we see Amazon Web Services supporting the Avalanche blockchain ecosystem,” Sarson Funds analyst Evan LaMontange told Cointelegraph, allowing Avalanche’s custom subnet to integrate into the AWS marketplace. It will allow both individuals and institutions to launch subnets that can function as self-sufficient blockchains. systems. He added:

“This has sparked a new vision of scalability, allowing entities to easily spin up their own standalone blockchain systems.”

Others, however, doubted that the new collaboration has gained importance at industry level. “It certainly means it’s easier to launch/run AVAX nodes on AWS,” Freddy Zwanzger, Ethereum ecosystem manager at Blockdaemon, told Cointelegraph, but “there are already other blockchain nodes/templates available from different cloud or hosting providers .”

Of course, any improvements in running blockchain infrastructure are positive, Zwanzger added, “but our institutional customers expect from us, as an institutional infrastructure provider, best-in-class service” that includes specialized setups.

Elsewhere, Howard Wright, vice president and global head of startups at AWS, called the company’s partnership with Ava Labs “a seminal moment,” a turning point where blockchain technology becomes “commonplace and used in our marketplace by developers.”

Some of the Twitter comments suggested that the announcement was mainly designed to pump up the price of the AVAX token. “It’s not the first time it’s happened in this market,” noted Pastore in his 15-part Twitter thread. “This market is full of manipulation,” adding:

On the other hand, almost everyone coins got a boost after the announcement and it probably had more to do with favorable interest rate news than anything specific to the crypto world. Comparing AVAX’s price movement with Bitcoin (BTC) and Ethers (ETH) over the seven-day period of 10-17 In January, Cointelegraph found that AVAX was +34%, but BTC and ETH were not far behind at +24% and +19%, respectively.

An unusual tripartite structure

The Avalanche blockchain was launched in September 2020 and has some unique elements. It actually consists of three individual blockchains: the X chain which is used exclusively for sending and receiving funds, the P chain for staking and validation activities, and the C chain for smart contracts and DeFi applications.

“Avalanche blockchains even use different consensus mechanisms based on their use cases,” notes CoinMarketCap. It’s not like BTC or ETH where all nodes validate all transactions. This division of labor undoubtedly increases transaction speed.

In fact, Avalanche claims to be the fastest smart contract platform in the industry by time to completion. It also has the most validators that ensure the activity of any proof-of-stake protocol, according to Ava Labs.

Others also recognize its strengths. “Avalanche offers near-instant finality and penny-per-transaction costs,” commented Sigel. “Ethereum settles much more slowly at a higher price.” Ease of use could also differentiate Avalanche from other chains going forward, given that AWS could make it easier to launch an Avalanche subnet, he added.

Working with authorities

Ava Labs seems more concerned with supporting public entities than some other blockchain developers. In November 2021, it announced a “strategic alliance” with Deloitte to build a blockchain-enabled “disaster recovery platform” to make it easier for state and local governments to demonstrate eligibility for federal emergency funding.

Government remains an “under the radar” area for blockchain applications, Ava Labs senior vice president Nick Mussallem said on the webinar, noting Ava Labs’ “partnership” with Deloitte to work with communities and government agencies like FEMA on blockchain applications that reduce administrative costs:

“It [the blockchain] helps accelerate recovery by organizing the documentation necessary to demonstrate eligibility [for funding]. It simplifies retention by storing and linking all related documentation securely on Avalanche.”

“Subnets acting as app chains”

The blockchain world is changing and Amazon is looking to get on board. At least that’s the signal Ava Labs sent last week.

“AWS recognizes how blockchains are evolving, with subnets acting as app chains, and wants to be one of the hosting providers for the many subnets that people are launching,” so Sirs.

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Perhaps Ava Labs went a little too far in claiming a “partnership” with Amazon – which is like the moon claiming a partnership with the sun. But Ava Labs should be applauded for looking beyond use cases aimed solely at cryptonatives while drawing on AWS’s flexibility, scale and authority to enable developers to build subnets for use by everyday businesses and government agencies, among others.

After all, if blockchain technology is ever to achieve mainstream status, it will be built subnet by subnet – including use cases as mundane as document storage and the like.