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Trading Term
Avalanche is a blockchain platform designed for fast settlement, high throughput, and customizable networks. AVAX, the native token, is issued through Proof-of-Stake, with uses that include paying transaction fees, participating in staking, as well as helping to secure the network. Users may deploy custom blockchains, called ‘subnets’, or interact with decentralized applications. Compared to Ethereum, Avalanche emphasizes rapid finality and flexible network design. Some investors find Avalanche attractive for its scalability and institutional-oriented features, with settlement typically completing in one to two seconds.
For example: A company wants to create a platform where investors can buy and trade tokenized shares of commercial real estate. On Avalanche, the company 1) creates and launches its own custom subnet (a custom blockchain); 2) sets specific rules (e.g., only KYC-verified investors can participate), and 3) can choose its own validator requirements and fee structure.
The company then deploys smart contracts (because Avalanche is EVM-compatible, the team can reuse Ethereum-style smart contracts).
Investors can then interact with the platform just like they would with other DeFi apps. For instance, an investor makes a $50,000 purchase worth of tokenized property and pays transaction fees in AVAX. The transaction reaches finality in about 1–2 seconds. Once confirmed, the ownership transfer is effectively irreversible.
Validators also stake AVAX to secure the network, where misbehavior risks losing staking rewards.
The result of this process typically yields fast confirmation, customizable compliance rules, and isolated infrastructure (Avalanche’s subnets don’t compete with other apps for block space).
IBKR FAQ: Cryptocurrency products offered
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Digital assets, including Avalanche (AVAX), involve significant risk and may experience substantial volatility. You may lose all or a portion of your investment. Network performance, regulatory changes, and technological factors may impact value and usability. This information is for general purposes only and does not constitute financial, investment, or legal advice.
Trading in digital assets, including cryptocurrencies, is especially risky and is only for individuals with a high risk tolerance and the financial ability to sustain losses. For more information about the risks surrounding the trading of Digital Assets please see the “Disclosure of Risks of Trading Digital Assets“.
IB is not party to any transactions in digital assets and does not custody digital assets on your behalf. All digital asset transactions occur on the Paxos Trust Company (“Paxos”) or Zero Hash LLC (“Zero Hash”) exchanges. Any positions in digital assets are custodied solely with Paxos or Zero Hash and held in an account in your name outside of IB.
Digital assets held with Paxos or Zero Hash are not protected by SIPC.
For more information about eligibility to trade digital assets with Paxos or Zero Hash, please see the FAQ.
Zero Hash LLC and Zero Hash Liquidity Services LLC are licensed to engage in Virtual Currency Business Activity by the New York State Department of Financial Services.
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