Appchains: The Future of Specialized Blockchain Solutions

Introduction

As the world drifts towards mass adoption of Web3 products and services, there is an increasing need for more scalable and specialized systems in Web3. People are transitioning from the traditional web onto the blockchain, and applications built on public blockchains are failing to handle the level of customized experience sought for. As a result, there is an urgent need for specialized blockchain solutions, giving rise to Appchains.

Appchains promises to enable a seamless transition from Web2 to Web3. The current blockchain system is slow and unscalable; thus there is no incentive for regular internet users to want to move to Web3. With the emergence of application-specific blockchains that offer tailored and specialized experience, developers will be able to build improved applications that are superior to the Web2 platforms.

What are Appchains?

Also known as application-specific blockchains, appchains are specialized blockchains designed for specific applications. In other words, an appchain is a dedicated blockchain that only serves a particular application. This is a remarkable difference from public blockchains that accommodate many applications. Appchains allow the developers to control the core infrastructure of the system including governance structure, consensus mechanism, and security features. The main purpose of appchains is the flexibility and freedom that developers have, giving them the chance to build sustainable, efficient, and scalable systems.

The Need for Appchains

Source: Learnnear.club — The scope of appchains compared to general-purpose blockchains

As the blockchain industry matures, there is a quick realization that a one-size-fits-all approach could not cater to the specific needs of diverse applications. The industry wanted specialization and scalability from the current systems, but blockchain applications were built on public blockchains, each using just a single mempool. That means there was a massive competition among applications for speed, storage space, and throughput. Developers needed their own chain where they could build scalable applications without having to compete with other applications for resources. It became clear that for Web3 to be enticing enough for mass adoption, there was a need for application-specific blockchain solutions.

Appchains emerged as a solution to the existing problems in the blockchain space. It enhances the performance of Web3 applications and improves their functionalities. Because they don’t compete with other applications for storage and computational resources, appchains give improved performance, increased ownership, and better customizability.

Advantages of Using Appchains

In more detail, the following are the benefits of using appchains:

1) Scalability: Appchains can allow blockchain applications to achieve the scalability that was previously unimaginable. Because applications built on appchains don’t have to compete for block space, they result in improved performance and better throughput. More users can seamlessly use the application because there is reduced congestion, unlike the case of applications hosted on public blockchains.

2) Interoperability: Appchains allow developers to develop applications that can communicate and exchange value within the broader blockchain ecosystem. Because of the customizability that appchains offer, applications can choose which ecosystem player to interact with, enhancing usability and security.

3) Customization: Appchains give developers the creativity and freedom to tailor-make their applications. They do not have to rely on the resources of public blockchains before building their own, enhancing flexibility and innovation. With appchains, developers can choose their preferred governance structure, consensus mechanism, and economic models without relying on any third-party systems.

4) Innovation: It is easier to innovate on appchains than any other blockchain type because of the freedom they provide. Since they do not rely on the main blockchain to function, developers can try new things, leading to better innovations.

5) Efficiency: Because they are focused on one application, appchains attain high efficiencies that are almost impossible on general-purpose blockchains. This leads to improved user experience and faster transaction speeds and throughput.

6) Security: Appchains can be developed with security features that specifically suit the use case of the application, enhancing the overall security of the platform. That allows for the creation of an application that can handle the unique threats and vulnerabilities peculiar to its circumstance.

7) Sovereignty: Appchains can be independent and self-sufficient, reducing the risk of cascading failures from other systems. This allows the application to have a high success rate because everything happening in the ecosystem is easily controllable.

Disadvantages of Using Appchains

Despite the numerous benefits of using Appchains, some limitations must be taken into consideration. The main downside is the complexity involved in building appchains, compared to traditional blockchains. In addition, appchains are expensive and time-consuming, with accompanying security and composability risks.

1) Resource Intensive: The development of appchains is resource-intensive, requiring a considerable investment of expertise, financial cost, and team time. Launching an appchain requires a very long list of additional infrastructure which must be coordinated with validators. Unlike public blockchains that already have these infrastructures ready-made, appchain developers need a larger team and increased cost which may not be affordable for startups, especially in their early stages.

2) Security Concerns: Appchain development involves building a lot of resources from scratch, including security features. The security of appchains largely depends on users’ adoption of the application, validators’ effectiveness, and the price of its native token. If developers compromise on any security requirements to cut costs, the system will be susceptible to security vulnerabilities.

3) Smaller Ecosystem: Because they are new and more tailor-made, the community following of appchains is very low compared to established blockchain platforms. This limits the available support and resources on the systems, and can also negatively affect the platform’s security.

4) Complexity: Although the specialized nature of appchains is a great feature, the platform becomes highly complex, making it challenging to develop and maintain the application over time.

5) Lack of Composability: On public blockchains, applications have atomic composability, with each app seamlessly interacting with multiple protocols. This atomic composability is a unique feature of Web3 apps that enables them to solve diverse problems. However, appchains lack atomic composability because they are built in isolation from other blockchains. Achieving composability in appchains requires complex processes, like cross-chain bridging, which cannot be achieved atomically.

6) Bridging Risks: Another limitation of appchains is the risk of bridging assets. Bridging risks is a peculiar problem for DeFi applications because their functionality depends on bridging several assets like ETH, stablecoins, and BTC. Bridging usually degrades the user experience and increases exposure to security threats. This risk is even higher with appchains because they may not attract reputable bridges, leaving them to settle for centralized bridges or custom-made ones.

How Does an Appchain Work?

Source: @OneBlockplus/how-does-appchains-become-the-potential-chain-of-web3-2f44ae20eab3"">Medium.com/@OneBlockplus — Image showing appchains as specialized blockchain solutions

Appchains utilize the core principles of blockchain technology with unique attributes that align with the application. This specialization differentiates them from traditional blockchains and results in distinct qualities. They function by utilizing their customized blockchain environments that are tailored to the specific protocol or application, ensuring that smart contracts and transactions are processed independently within the appchain.

Since developers of appchain apps can customize parameters like choosing the token standards, consensus mechanisms, governance models, and more, there is better flexibility and efficiency compared to traditional dApps.

Using three criteria, the following highlights how appchains work:

1) Customized Consensus Mechanisms: Rather than relying on the one-size-fits-all solution available on public blockchains, appchains can implement customized consensus mechanisms most suitable for their specific purpose. This flexibility allows for more streamlined use cases depending on the intended use case of the application. For example, an application used for gaming may need a different consensus mechanism than another application used in supply chain management.

2) Dedicated Network: Another unique attribute that allows appchains to work seamlessly is their ownership of a dedicated blockchain network. This ensures that resources are not shared across various applications, resulting in faster transaction speeds and a more stable environment. This also ensures that an appchain has a dedicated mempool and doesn’t have to share this with other projects.

3) Tailored Smart Contracts: Appchains can have dedicated smart contracts that allow for improved efficiency and functionality. This gives developers the flexibility to create more complex and nuanced contract logic that is tailored to the application’s specific needs.

Comparing Appchains to Other Blockchains

Source: CoinMarketCap Academy

Compared to traditional blockchain solutions, appchains typically focus on one application. To gain a better perspective on appchains, it is essential to know the peculiarities of appchains and how they compare to other blockchain types. This knowledge will help to understand the standpoint of appchain within an array of blockchain solutions.

Appchains Vs. Layer 1 Blockchains

Also called monolithic chains, L1 chains are all-in-one solutions where several applications are executed on the base layer. Common examples of projects built on Layer 1 (L1) chains are Bitcoin and Ethereum 1.0. These chains offer simplicity because they don’t rely on external protocols and have a high degree of decentralization and immutability. They are also very secure as all nodes follow the same rule and possess smaller attack surfaces.

Despite their numerous benefits, L1 chains face significant scalability and flexibility issues. This is because numerous applications run on the chains, leaving them to compete for limited resources and bandwidth, thus leading to high transaction fees and network congestion. Because all applications have to follow the chain’s consensus mechanism and other protocols, there is a limit to innovation and customization which might be a challenge.

Let’s explore how Appchains compare to these L1 chains:

• Development and Deployment: Developing an application on an appchain is a more tailored process because it is focused on the specific application while L1 development is more complex because of the need to cater to a wider array of applications.
• Performance: Appchains can outperform L1 chains in niche areas because of their specialized and tailor-made nature.
• Generalization Vs. Specialization: Appchains offer a targeted solution and specialized deployment processes while L1 are generalistic, hosting a wider range of applications.
• Community and Ecosystem: L1s generally have a larger community following because of the wider range of resources and tools they possess. However, appchains have smaller ecosystems and communities because of their specialized nature.

Appchains Vs. Layer 2 Blockchains

Layer 2 Blockchains operate on top of L1 chains and they serve as scaling solutions, handling some execution or settlement functions for the L1. They essentially improve the speed and finality of the network because they offload traffic off the base chain. However, there is limited autonomy and sovereignty on L2 chains because they rely on L1 for data availability and consensus. Arbitrum and Optimism are examples of Layer 2 blockchains. They compare to appchains in the following ways:

• Purpose: Appchains are developed to cater to specific applications while L2 chains primarily function to enhance the performance and scalability of L1 chains.
• Complexity: Because they require an entirely new blockchain tailored to a specific application, Appchains are more complex to build. However, since L2 chains are built on top of an existing blockchain, they are generally easier to implement.
• Independence: L2 chains are built on existing blockchains and are dependent on the existing infrastructure while appchains are independent blockchains specifically made for an application.
• Security: Appchains have their own customized security protocol that are tailored to the specific needs of an application while L2 chains usually inherit the security features of the existing blockchain.

Appchains Vs. Sidechains

Sidechains are blockchains that are compatible with other blockchains, primarily L1 chains but do not have their security features. Sidechains do not post transactions on the main blockchain and they operate their security protocol. Sidechains are configured in such a way that they are connected to the main blockchain through a two-way bridge. Polygon is a common example of Sidechains. They compare to Appchain in the following ways:

• Integration with L1: Sidechains are parallel to L1 chains, facilitating the offloading of transactions to reduce congestion. On the other hand, Appchains are independent blockchains built to service an application specifically.
• Customization: Appchains allow a higher degree of customization when compared to Sidechains because they are tailor-made for specific applications, allowing for innovation and flexibility.
• Use cases: Sidechains are generally used to enhance the functionality and scalability of the main chain, while Appchains provide a more specialized blockchain solution.

Appchains Vs. Modular Chains

The core functions of modular chains are split into separate layers, including the execution, consensus, settlement, and data availability layers. This makes the system scalable because the modular chains help process more transactions and store more data using specialization and parallelization techniques. Because they can outsource certain tasks to other layers or chains, modular chains can optimize their bandwidth and resources.

Despite the numerous benefits of modular chains, they are faced with constraints in terms of security and complexity. Because they often rely on external parties, modular chains have security and network complexity issues. Examples of modular chains are Solana and Ethereum 2.0. Let’s compare modular chains to appchains:

• Purpose: Modular chains can run multiple applications while appchains are dedicated to a specific application.
• Dependence: Modular chains depend on L1 or L2 chains while appchains work independently.

Popular Appchain Platforms

Source: Medium.com/1kxnetwork —

The image shows Appchain products, platforms, and the industries they operate in

Although the concept of appchains is relatively new, it is progressively adopted by various blockchain platforms hoping to tap into the world of specialized blockchain solutions. As more blockchain projects are emerging with a desire for specialized features and customization, there is a growing need for blockchain platforms that can host Appchains. There are currently different blockchain platforms suitable for Appchains, each with unique features that fulfill specific app needs. Here are some notable blockchain platforms pioneering the use of appchains:

Polkadot Parachains

On Polkadot, parachains are used to operate specific applications or projects and they are all connected to a central blockchain called Relay Chain. Using a Proof-of-Stake (PoS) model, validators stake $DOT, the native token of Polkadot. These validators are responsible for a specific parachain, and they serve the essential purpose of maintaining the network.

Polkadot can only occupy 100 parachains at a time, and developers obtain parachains through an auctioning process where network participants bid for projects they deem deserving of an appchain. The winning project then gets a leased appchain for two years. These parachains have all the attributes already described about appchains, including governance and economic structures. Developers can also make app-specific native tokens on their parachains.

The obvious downside of using the Polkadot network is that it only supports 100 parachains, which limits the scalability of the network. To solve this, Polkadot is already working on Parathreads, an infrastructure that can accommodate over 10,000 parathreads. Another downside of Polkadot is its non-compatibility with smart contracts which places a significant limitation on the network’s performance.

Appchain projects that use Polkadot are Litentry and Acala.

Cosmos Zones

On Cosmos Zones, Appchains are called zones. These zones operate on the Cosmos network and are all connected to the Cosmos Hub, which is the center of the Cosmos network. Because the zones are interconnected, they can send tokens and data to one another seamlessly. Although each zone can have its own token, all zones on Cosmos Hub can use the native token, $ATOM, for rewards, staking, and transaction fees.

Cosmos Zones give developers several advantages in addition to the usual features of appchains. Cosmos uses a network infrastructure called Tendermint Core, which greatly improves the Appchain’s transaction speeds and finality. The major difference between Cosmos and Polkadot is the governance structures of their respective appchains.

dYdX and Osmosis are examples of appchains using the Cosmos Hub network.

Avalanche Subnets

Appchains on the Avalanche chain are called Avalanche Subnet. Avalanche is an aggregation of blockchain ecosystems that contains the validators and subnets. Using Avalanche Subnets, developers can develop appchains by staking $AVAX, which is a native token for Avalanche. The platform’s consensus protocol uses the Snowball Algorithm that supports a quick, scalable, and efficient system.

Avalanche is superior to Cosmos and Polkadot in terms of scalability, speed, and finality. There is no limit to the number of appchains that can be created on Avalanche Subnets. In addition, the system processes transactions fast, within 1-2 seconds, and has a high throughput of more than 4500 transactions per second (tps).

Crabada’s Swimmer and Crystalvale are examples of projects using Avalanche subnets.

Polygon Supernets

Appchains on Polygon are called supernets. Polygon’s blockchain-building platform, Polygon Edge, provides developers the tools to build their own Ethereum Virtual Machine (EVM) compatible blockchain. Developers also receive tools and digital services required to develop their Appchains using supernets. This gives them the flexibility to customize their apps and use any scaling infrastructure they wish.

Examples of appchain projects built by Polygon Supernets include Boomland and Vorz.

How to Choose the Best Appchain

For the application to be successful and fulfill its intended purpose, developers must choose the best appchain for their project. There are several appchains in the market currently, each with its peculiarities. The process of selecting the best Appchain for a project is very crucial and will significantly influence success.

Here are the things to look out for:

1) Project Goals: The chosen appchain must align specifically with the goals and objectives of the project. The appchain must also possess the required features and functionalities that cater to the application’s needs.

2) Scalability: The platform must be able to scale with the growth of the application. Without compromising on speed and security, the appchain must be able to handle a growing number of transactions on the application.

3) Interoperability: Because applications need to connect seamlessly within the decentralized world of blockchains, interoperability is a key feature. The chosen appchain must be able to interact with other blockchains, facilitating a robust ecosystem where applications can leverage the strength of others.

4) Community Support: Consider using an appchain that has vibrant community support where tools, resources, and expertise are readily available. Platforms with strong community backing are usually very secure and highly recommended.

5) Security and Ease of Use: It is crucial to assess the security infrastructure of the Appchain, exploring the consensus mechanism and cryptographic techniques used to secure data. Always go for an appchain with robust security features that safeguard against potential threats. Furthermore, the Appchain must be user-friendly with a smooth development process.

The Future of Appchains

Source: Medium.com/1kxnetwork — The history of Appchains, underscoring their promising future

As Appchains continue to gain traction, there will be a surge in demand for Appchain solutions in all walks of life. Many industries will need these specialized blockchain solutions to solve their unique problems. This can pave the way for the new era of blockchain technology that offers specialized and tailor-made solutions.

Industries like health, gaming, supply chain, and healthcare are already leveraging Appchains to address their specific needs. This has greatly enhanced the efficiency in these industries, underscoring the incredible promise that appchains bring to the world. As more creators explore the use of appchains for their projects, we can expect to see a proliferation in the predominance of specialized blockchains, each contributing to the success of their ecosystems.

Conclusion

Appchains represent a remarkable milestone for the blockchain ecosystem because they proved that attaining customizability, security, interoperability, and efficiency is a possibility within a single blockchain project. Instead of a one-size-fits-all approach, appchains are improving the user experience in Web3. As we advance into this new phase of blockchain innovation, appchains are well-suited to drive the prosperity of the digital age.