How to Use the Avalanche Wallet?

TL;DR

Avalanche Wallet is a cryptocurrency web wallet on the Avalanche blockchain. It enables users to tap into the Avalanche ecosystem of decentralized applications (DApps).

An Avalanche Wallet has three types of addresses: X-Chain, C-Chain, and P-Chain. You can store cryptocurrencies on any of the three chains to serve different purposes. In short, the X-Chain is mainly used for storing assets, the C-Chain allows you to interact with smart contracts, and the P-Chain is used for staking. You can also move your tokens across the three chains within the Avalanche Wallet.

When moving your assets out of your Avalanche Wallet, make sure to use a chain that is compatible with your destination wallet. For example, only the C-Chain wallet is compatible with MetaMask and Binance wallets. You can move your Avalanche tokens to the C-Chain wallet using the cross-chain function.

Introduction

Avalanche is an open-source platform for Decentralized Applications (DApps) that aims to enhance scalability, interoperability, and usability within its three chains. If you want to explore and interact with the Avalanche ecosystem and DApps, you’ll need an Avalanche Wallet.

What is an Avalanche Wallet and how does it work?

Avalanche Wallet is a non-custodial cryptocurrency browser wallet for interacting with the Avalanche ecosystem. You can store, transfer, and stake hundreds of different cryptocurrencies, and even create your own NFTs (non-fungible tokens). You can also swap DeFi tokens from BNB Smart Chain (BSC), Ethereum, Polygon, and other chains to Avalanche using bridge services.

As mentioned, the Avalanche network features three types of blockchains: the Exchange Chain (X-Chain), the Contract Chain (C-Chain), and the Platform Chain (P-Chain). The X-Chain is a decentralized platform for creating and trading the Avalanche native token AVAX and other cryptocurrencies. The C-Chain allows users to create smart contracts and interact with DApps and DeFi services. The P-Chain coordinates network validators and can be used for staking on the Avalanche Wallet. You can read more on how the three chains work in What Is Avalanche (AVAX)?.

You can store cryptocurrencies on any of the three chains to serve different purposes. Take AVAX as an example: it can be stored and traded on the X-Chain, used on the C-Chain to pay for transaction fees and interact with smart contracts, or staked on the P-Chain to earn rewards. This might sound complicated at first, but you can easily move tokens from one chain to another using the cross-chain function of the Avalanche Wallet.

Note that each chain has its own wallet address and format. The X-Chain wallet addresses all start with “X”, while the P-Chain addresses begin with “P”. The C-Chain addresses start with a “0”, similar to Ethereum or BNB Smart Chain (BSC) addresses.

To transfer tokens to and from your Avalanche Wallet, you should select the corresponding chain address. For example, Binance and MetaMask wallets are only compatible with the C-Chain. Be careful and make sure to double-check the addresses before making transactions. You may lose your funds if you send tokens to an incompatible network.

How to create an Avalanche Wallet?

1. Go to the official Avalanche Wallet website and click [Create New Wallet]. Beware of fake websites created by scammers. Make sure you’re on the official URL before you start.

2. Click [Generate Key Phrase] to reveal the key phrase.

3. You’ll see 24 words on the screen. This is your wallet’s key phrase (or seed phrase). If you lose the key phrase, you won’t be able to access your wallet. There is no way to recover a lost key phrase.

Write the 24 words down in the exact order and check the box. You should always keep your key phrase in a few secure offline locations and never share it with anyone. Click [Access Wallet] to continue.

4. The system will ask you to repeat certain words from the key phrase to ensure that you’ve backed it up correctly. Enter the missing words from your seed phrase and click [Verify].

5. Your Avalanche Wallet is now ready. Click [Access Wallet] to go to your wallet.

How to send AVAX from Binance to Avalanche?

Before you can start interacting with DeFi DApps on Avalanche, you’ll need AVAX tokens in your Avalanche Wallet to pay for transaction fees. You can acquire AVAX from exchanges like Binance and send them to your Avalanche Wallet.

Let’s see how to transfer AVAX from Binance to Avalanche. 

Note that only the C-Chain is compatible with the Binance exchange. You can only use the C-Chain to transfer AVAX from Binance to your Avalanche Wallet. Be careful! If you select the wrong chain, you might lose your tokens.

1. Log in to your Binance account and go to [Wallet Overview] - [Withdraw].

2. Select [AVAX] from the token list.

3. Go to your Avalanche Wallet and click [C] to find your C-Chain wallet address and copy it.

4. Go back to Binance and paste the address under [Address]. Then click [Network] to select the Avalanche C-Chain network [AVAXC].

5. Enter the amount to transfer and click [Withdraw].

6. Read the risk warning carefully before clicking [Confirm].

7. Check your withdrawal details.

8. Now verify your withdrawal 2FA and click [Submit]. Your AVAX will be sent to your Avalanche C-Chain wallet.

How to transfer tokens between the Avalanche X-Chain, C-Chain, and P-Chain?

To move your funds from one chain to another, you’ll need to use the cross-chain transfer function. For example, to send AVAX to your MetaMask wallet, you need to move the tokens to your C-Chain wallet first, as only the C-Chain is compatible with MetaMask. If you select the wrong chain, you might lose your tokens and they cannot be recovered. 

In this example, we’ll use the cross-chain function to move AVAX from the X-Chain to the C-Chain.

1. Log in to your Avalanche Wallet and check your wallet balance on the top. In this case, our AVAX tokens are in the X-Chain wallet.

2. Click [Cross Chain] on the left menu bar.

3. Select [C Chain] as the destination chain and enter the amount you want to transfer. Click [Confirm] to proceed. Note that you’ll need to pay a small transaction fee every time you move assets between the chains.

4. Your AVAX tokens are now in your C-Chain wallet. You are ready to transfer them to MetaMask or another compatible wallet.

How does staking AVAX work (validator vs. delegator)?

You can also stake AVAX with your Avalanche Wallet to earn more AVAX tokens. There are two ways to earn AVAX rewards: you can become either a validator or a delegator. 

Validators are active nodes that validate transactions and secure the blockchain. The more AVAX tokens you stake, the higher the chance you’ll be selected to participate as a block validator. 

Delegators don’t process transactions but support validators’ work. When validators receive their rewards, delegators can get a share in proportion to the AVAX they staked.

As of January 2022, these are the staking requirements:

Being a validator requires more technical expertise and requires you to run an Avalanche node with specific software on your computer. We won’t be covering the technical details in this tutorial, so please refer to the official Avalanche documentation for more information.

How to stake AVAX as a delegator with the Avalanche Wallet? 

Before you begin, you need to transfer the required staking amount of AVAX tokens to the P-Chain wallet first.

1. Log in to your Avalanche Wallet and click [Earn] from the left menu bar.

2. Click [Add Delegator].

3. You’ll see a list of the active validators. Choose the one you want to delegate your AVAX tokens by clicking [Select].

4. Select the staking duration and enter the amount of AVAX tokens to stake. Note that you cannot set your delegation duration past the end date the validator set.

Check your reward address. It should display your P-Chain wallet address. Click [Confirm].

5. You’ll then see the delegating details and will start earning AVAX rewards.

Closing thoughts

The Avalanche Wallet lets you tap into the ever-growing collection of DeFi DApps on the Avalanche ecosystem. Within the same wallet interface, you can access the three Avalanche chains, each serving different use cases and purposes. To read more about the Avalanche blockchain, please check out What Is Avalanche (AVAX)?.