- Appchains are blockchains created for the purpose of fulfilling specific requirements of an application.
- Major perks of appchains include customizability, scalability, and security.
- Benefits and trade offs of appchains in the blockchain world.
Application-specific blockchains, also known as appchains, subnets, or sidechains, are single-use case blockchains that are designed to serve only one decentralized application. This evolved business working model has come under the radar of web developers, to win the constant tug of war confronted by their decentralized applications, (dApps) in terms of traffic, storage, and resources.
Basic working strategy of an appchain
The primary distinction between an appchain and a basic blockchain is that the former is exclusively app-specific. Although the working principle is quite the same for both, appchains for decentralized applications operate on top of an existing Layer 1 (L1) blockchain network (e.g., Ethereum, Solana). Based on the type of blockchain used for their development, the operation of appchains differ slightly.
Appchains have their native tokens that work as the application’s internal currency. These tokens can be used for stacking by the validators, as the signature of ownership, and also as a voting system within the app. Validators from the main blockchain system can stake the appchain’s token, which as a result ensures non-competency between appchains and other applications for transaction capacity.
Appchains bestow more freedom to the web3 developers regarding consensus mechanism, economic structure, and governance structure of their designed app while utilizing the main blockchain for security and gas fees.
Nowadays, several blockchain ecosystems, namely, Cosmos zones, Polkaot Parachains, Avalanche subnets, and Polygon supernets, have been facilitating the developers to build appchains. The most prominent and notable decentralized platforms (i.e., appchains) that had been developed with the help of the above-mentioned blockchains would be Osmosis, Litentry, dYdX, and Acala.
Benefits and trade offs of appchains
Irrespective to the type of blockchain used in the construction of application-specific blockchains, they are generally tethered to a main blockchain. Based on that reason, this solution benefits from the security of the larger network and enhances system performance and customizability.
Appchains have shown their potential in improving the scalability of projects. With the aid of appchains, the projects can support any number of users and transactions minus the task of competing for blockspace with other dApps on the same network. It lowers network congestion while simultaneously providing the ability to avoid high gas fees.
Oftentimes, popular dApp consumes a highly disproportionate amount of resources as compared to others, which causes a serious hike in transaction costs and latency for other dApp users. This issue is mitigated by the use of appchains as it allows dApps to stabilize the transaction costs along with latency, thereby enhancing user experience.
The process of developing application-specific blockchain hands over complete autonomy to its developers. In other words, the appchains can be constructed and tailored as per the requirements of the specific use cases. Moreover, the updates on the app-specific blockchains can be done independently of the main chain, which further improves its flexibility.
Despite its advantages, appchains still have major challenges that are proving to be the bottleneck in its progress. A current and major drawback of appchain solution is that its network is yet to be fully decentralized. Additionally, managing certain aspects of the infrastructure such as sequencers and validators for appchains can be more complex in contrast to the deployment of smart contracts on Ethereum. Hence, it can be concluded that although appchains are a promising concept in the blockchain world, developers should weigh their requirements in certain applications before launching them.
