A deep dive into appchains.
An exciting breakthrough in blockchain tech thatโs propelling the space forward.
But what exactly are they, why are they useful, and who should be considering them?
Letโs unpack this ๐งต๐๐ป
An exciting breakthrough in blockchain tech thatโs propelling the space forward.
But what exactly are they, why are they useful, and who should be considering them?
Letโs unpack this ๐งต๐๐ป
In essence, an appchain is a blockchain specifically tailored to a particular application or protocol.
It offers more customization than dApps on sovereign L1s.
This is a huge advantage when a product requires unique features and mechanisms to function optimally.
It offers more customization than dApps on sovereign L1s.
This is a huge advantage when a product requires unique features and mechanisms to function optimally.
For instance, @dYdX , one of the most popular perp dexes, after initial scalability issues, successfully adopted the appchain model.
This demonstrates how certain products demand higher customization than what's typically available on the standard smart contract dApp platforms.
This demonstrates how certain products demand higher customization than what's typically available on the standard smart contract dApp platforms.
In terms of development frameworks, both Layer 1 and Layer 2 solutions support appchains.
On L1, platforms like Cosmos SDK and Avalanche Subnet enable creation of appchains
On L2s, we have solutions like Optimism Stack, Polygon (Sidechain) Supernets & Starknet.
On L1, platforms like Cosmos SDK and Avalanche Subnet enable creation of appchains
On L2s, we have solutions like Optimism Stack, Polygon (Sidechain) Supernets & Starknet.
To be more precise, L2 appchains are app-specific rollup chains and mainly come in two main categories:
๐ถ Optimistic rollups (Optimism, Arbitrum)
๐ถ ZK rollups (StarkNet, zkSync)
๐ถ Optimistic rollups (Optimism, Arbitrum)
๐ถ ZK rollups (StarkNet, zkSync)
Examples of L1 appchains based on Cosmos SDK are:
๐ถ @SeiNetwork : Fast & Hybrid L1
๐ถ @dYdX : Perpetual exchange
๐ถ @Neutron_org : Smart contracts
๐ถ @Stride_zone : Liquid Staking appchain
๐ถ @SeiNetwork : Fast & Hybrid L1
๐ถ @dYdX : Perpetual exchange
๐ถ @Neutron_org : Smart contracts
๐ถ @Stride_zone : Liquid Staking appchain
On the other hand, @aevoxyz (On-chain Option trading), opBNB by Binance & Base by Coinbase are examples of L2 appchains.
These utilize the Optimism Stack, driving down transaction costs and enhancing scalability while maintaining the security of the Ethereum network.
These utilize the Optimism Stack, driving down transaction costs and enhancing scalability while maintaining the security of the Ethereum network.
L1 and L2 appchains cater to different needs.
L1 appchains offer sovereign security, are MEV resistant, more flexible, and independent.
But they have the burden of bootstrapping security and maintaining validators.
L1 appchains offer sovereign security, are MEV resistant, more flexible, and independent.
But they have the burden of bootstrapping security and maintaining validators.
L2 appchains instead, inherit the security of their base layer (like Ethereum), benefit from lower transaction costs and scalability.
But they are less flexible as they conform to the security and consensus mechanisms of their base layer.
But they are less flexible as they conform to the security and consensus mechanisms of their base layer.
It's important to note that deploying appchains involves tradeoffs.
They require a higher degree of maintenance than simple dApps, including concern about validators, bridges, cross-chain liquidity, composability, and regular upgrades.
They require a higher degree of maintenance than simple dApps, including concern about validators, bridges, cross-chain liquidity, composability, and regular upgrades.
Appchains are best suited for projects that demand high-frequency transactions or need a high level of customization and control over their blockchain parameters.
They provide a balance between scalability, security, and decentralization.
They provide a balance between scalability, security, and decentralization.
But they aren't always necessary.
Simple dApps or projects with fewer transactions might not need to face the overhead of maintaining an appchain and might prefer operating on existing chains or L2 solutions.
Simple dApps or projects with fewer transactions might not need to face the overhead of maintaining an appchain and might prefer operating on existing chains or L2 solutions.
Looking ahead, appchains can open a realm of possibilities.
As we've seen with DeFi-specific appchains or potentially sector-specific appchains, they can cater to specific niches, offering optimized solutions for various sectors.
As we've seen with DeFi-specific appchains or potentially sector-specific appchains, they can cater to specific niches, offering optimized solutions for various sectors.
As the blockchain space evolves, expect to see more sector-specific appchains.
We are in the early innings of appchains adoption, and their potential impact is massive, from fully on-chain games to decentralized social networks, perps and the metaverse.
We are in the early innings of appchains adoption, and their potential impact is massive, from fully on-chain games to decentralized social networks, perps and the metaverse.
Appchains usually get traction during a bull market, when network usage and gas fees are high, and competition for block space gets to its peak.
Expect more appchain announcements in 24/25.
Expect more appchain announcements in 24/25.
What does the future of DeFi look like?
Will every popular dapp launch its own appchain?
If so, how will they be interconnected? IBC? LayerZero?
---
Cosmosd SDK, Avalanche Subnets , Polygon Supernets , or Optimism Superchain?
Which one are you more bullish on? ๐๐ป
Will every popular dapp launch its own appchain?
If so, how will they be interconnected? IBC? LayerZero?
---
Cosmosd SDK, Avalanche Subnets , Polygon Supernets , or Optimism Superchain?
Which one are you more bullish on? ๐๐ป
That's all for today.
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Tagging some threadoors:
@rektdiomedes
@crypto_linn
@0xSalazar
@alpha_pls
@Dynamo_Patrick
@DeFi_Made_Here
@crypthoem
@CryptoGirlNova
@DefiIgnas
@francescoweb3
@rektdiomedes
@crypto_linn
@0xSalazar
@alpha_pls
@Dynamo_Patrick
@DeFi_Made_Here
@crypthoem
@CryptoGirlNova
@DefiIgnas
@francescoweb3
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