To encourage its validators, Avalanche, the fourth-generation proof-of-stake (PoS) blockchain, incurs considerable expenditures.

According to Token Terminal data as of December 7, the smart contract platform paid over $275 million in AVAX to compensate its validators in the previous year, despite only collecting $11.5 million in user fees.

Avalanche is paying a premium to reward validators.

Although Avalanche appears to be paying a premium for validators, this is crucial for network security and ensuring all transactions are validated. Overall, and as a proof-of-stake network depending on node operators for security and decentralization,

Avalanche’s decision to pay validators a premium is to maintain a healthy network of nodes, as its users require.

The network has a market cap of more than $9.8 billion, according to CoinMarketCap data. It is presently in the top ten in terms of liquidity, overtaking competing low-fee alternatives Polygon and Polkadot.

As it stands, Avalanche ensures that there is a strong pool of nodes accessible to support the network’s functionality by motivating validators with high incentives.

While AVAX incentivization may attract additional validators, Avalanche documentation also indicates that the network does not necessitate complex hardware to run a node.

At the same time, unlike Ethereum, the blockchain stipulates that staked AVAX is not at risk of being sliced or fined by the network if all network conditions are followed. This feature may account for the constant increase in validator count over the last three years.

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Avalanche is up 200% and trading at a high of 2023.

While Avalanche’s validator count grows, AVAX prices have been slowly rising, reflecting the wider market. AVAX is currently trading at $26, up more than 200% in the last three months.

Looking at the price activity on the daily chart, AVAX is trading at fresh 2023 highs and in a bullish breakout shape.

Given the current state of AVAX, bulls may be able to breach above $30. If the subsequent spike is accompanied by increased trading volume, it might serve as the foundation for another leg up that could take the coin to $90 or higher in the coming sessions. AVAX reached a high of $145 in 2021 when it reached its apex.

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