Blockchain scalability remains a major challenge in crypto. Layer-1 [L1] blockchains like Ethereum need to scale to perform at a higher efficiency level. Retrospectively, the fee becomes cheap, and transactions get processed much faster while being optimized so as not to break down during intensive use phases.
Several scaling solutions, such as optimistic rollups, zero-knowledge rollups, sidechains, plasma, validiums, and mainnet upgrades, exist to essentially solve Ethereum's inherent issues.
Following the above, appchains fall into the category of attempts to optimize blockchains for efficiency.
The appchain thesis simply posits that rather than focusing on linearly scaling general-purpose blockchain networks, apps can create and operate their own networks customized to meet their needs and the needs of their end users.
So, an appchain or application-specific blockchain is a customized blockchain network created to serve an application or a specific sector.
How do appchains work?
Appchains are built on top of existing L1 networks. Thus, depending on the design of the host blockchain or primary network chain, they (appchains) operate quite distinctively.
Appchains use the underlying blockchain to validate transactions and ensure security. However, since they are built separately, they can have their own gas token and customize validator incentives.
Although there are a few differences regarding how app chains work, they possess certain similarities with regular blockchains, such as their own designated block explorer, faucet, set of nodes, wallet compatibility and integration, and establishing API and Oracle support.
The benefit of functioning as an appchain is that the application or set of applications enjoy zero competition for storage and computation, thereby allowing for the best possible performance.
Types of appchains
Appchains can be divided into two categories:
- Application-specific blockchain: For the app-specific blockchain, the entire block space of the network is reserved for a specific application.
- Hubchains: A set of applications with the same use case create their own network chain tailored to their niche and needs.
Appchain examples
A handful of L1 and L2 networks have appchains built on them.
An example is the SKALE network with appchains and hubchains such as Calypso hub and Nebula gaming hub.
Avalanche’s subnet infrastructure also allows for L1 appchains to be built on top of the Avalanche network. GameFi-specific appchains such as Crabada, Shrapnel, and Off the Grid are thriving apps with their own dedicated validation systems on the Avalanche network.
Other appchain infrastructures like Polkadot’s Substrate network, ZK stack, ANKR, and OP-stack are pioneering the appchain thesis.
