This Crypto has just partnered with Amazon. Time to buy?

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Don’t look now, but Avalanche (AVAX 2.69%) – a once high-flying crypto that crashed over 90% in 2022 – is making a comeback this year. In mid-January, Avalanche announced a major partnership with Amazon (AMZN -2.11%) that will essentially make it the default blockchain of choice for any Amazon Web Services (AWS) customer. Avalanche is now the first blockchain to partner with Amazon’s cloud. computing platform.

To say it’s a big deal is an understatement. In the first 24 hours after the deal was announced, Avalanche’s price jumped more than 13%. More gains could be on the way in the long term if Avalanche fully realizes the plan to bring blockchain solutions to businesses and governments around the world.

Why Avalanche?

One of the coolest things about the partnership is that Amazon chose to partner with Avalanche and not Ethereum, which would have been the obvious choice. When launched in September 2020, Avalanche was touted as an “Ethereum killer”, due to its superior speed and scalability. But last year wasn’t kind to this blockchain upstart, so this announcement from Amazon was truly surprising.

While the top speed of the Avalanche blockchain undoubtedly played a part in Amazon’s decision, a key factor surely has to do with the underlying structure of the Avalanche network, which actually comprises three different blockchains: the exchange chain, the chain platform and the contract chain. The Platform Chain (“P-Chain”) allows developers to create their own customizable blockchain networks, called subnets.

Avalanche describes these subnets as “sovereign networks” with their own rules and tokenomics. As a result, each subnet on Avalanche is scalable and customizable to customer needs. Until now, subnets were primarily used by blockchain games, but now it looks like large corporations and government entities will use them as well.

Image source: Getty Images.

So imagine thousands of businesses running thousands of customizable subnets, all on the Avalanche Network. This vision of the future seems like a great way to attract new business customers for Amazon who are looking for custom blockchain solutions. And, indeed, as part of the deal, it looks like Avalanche will become part of the AWS Partner Network and also get a prime spot within the AWS Marketplace. This makes Avalanche the natural partner of choice for anyone interested in working with Amazon on blockchain projects. .

A win-win?

The deal appears to be a win-win for Amazon and Avalanche. On Twitter, Emin Gn Sirer, one of Avalanche’s co-founders, put it succinctly, “This is a big deal. This isn’t your grandfather’s AWS partnership announcement.” Avalanche will gain access to AWS assets and features, while Amazon will gain the opportunity to offer blockchain-as-a-service to all of its partners around the world. If you thought Amazon was cloud dominant, wait until it got involved in blockchain.

That being said, there are certainly criticisms of the partnership. Judging from the remarks and comments on social media, some blockchain developers are rightly concerned that a decentralized blockchain will suddenly partner with a centralized tech company like Amazon. The fear is that Amazon may one day wield too much power and control over Avalanche. It’s a story we’ve seen time and time again in the tech industry: a very promising tech start-up promising to change the world is assimilated by a large, well-established tech company focused on profitability, and things change. .

An avalanche of future growth

The new partnership is designed to inspire more companies, governments and enterprises to use blockchain and the cloud. If Avalanche becomes the go-to blockchain for businesses and governments, that would be huge for Avalanche’s future growth prospects. One caveat, however, is that it’s unclear if there’s any exclusivity to the partnership. If not, other blockchains could partner with Amazon as well. Avalanche would still have the first mover advantage, but that would make things much more competitive.

That being said, I’m bullish on Avalanche in the long run. After being beaten over 90% in 2022, Avalanche could be heading for a huge crushing recovery in 2023.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. Dominic Basulto holds positions at Amazon.com and Ethereum. The Motley Fool holds positions and recommends Amazon.com, Avalanche, and Ethereum. The Motley Fool has a disclosure policy.

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