How does the C-Chain differ from the X-Chain in terms of functionality?

• A. The C-Chain runs smart contracts via the Ethereum-compatible EVM; the X-Chain is used for asset transfers.
• B. The X-Chain runs smart contracts via the Ethereum-compatible EVM; the C-Chain is used for asset transfers.
• C. The C-Chain is used for asset transfers and token issuance.
• D. The P-Chain handles asset transfers.

Answer: (A)

On Avalanche, different chains have different jobs, and that distinction is what the question is testing. The C-Chain is the contract chain: it runs smart contracts using an Ethereum-compatible EVM, so you can deploy Solidity contracts, use Ethereum tools, and build DeFi apps just as you would on Ethereum. The X-Chain, by contrast, is designed for asset transfers and issuance—it's optimized for moving tokens and creating assets, not for executing complex smart contracts. The P-Chain handles coordination of validators and subnets, not asset transfers.

So the best answer maps directly to this division: the C-Chain handles smart contracts with the Ethereum-compatible environment, while the X-Chain handles asset transfers. The other statements mix up which chain does smart contracts or asset transfers, or misidentify the role of the P-Chain.