What are Appchains?

What are Appchains?

An appchain, or application-specific blockchain, is a blockchain infrastructure meticulously designed to meet the unique requirements of a single application. Unlike general-purpose blockchains, which are built to accommodate a wide variety of uses (like Ethereum), appchains are optimized for specialized tasks, offering enhancements in performance, scalability, and tailored functionalities.

Appchains typically function on top of foundational Layer 1 or Layer 2 networks like Avalanche, Optimism, or Cosmos, and are sometimes referred to as Layer 3s. For instance, Cosmos allows developers to create a dedicated Cosmos Zone for their distinct applications. This targeted customization enables faster transaction speeds and efficient interoperability between different blockchains, significantly boosting the overall efficiency and performance of the project.

This specialized approach provides developers the ability to fine-tune the blockchain's features to the exact needs of their application, ensuring optimal outcomes in terms of both technical performance and user experience.

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What Is an Example of an Appchain?

The dYdX Chain, which was designed for decentralized perpetual trading, is the most popular example of an appchain. This standalone blockchain was made to meet the specific needs of the dYdX DEX. It is based on the Cosmos SDK and uses Tendermint's Proof-of-Stake consensus.

dYdX has a decentralized orderbook and matching engine that is not connected to the blockchain and can handle trading volumes that are higher than what traditional blockchains can handle.

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What Networks Support Appchains?

Several blockchain networks facilitate the creation and deployment of appchains, each offering distinct advantages to developers based on their specific needs:

• Starknet Layer 3 Appchains: A highly scalable Layer 2 on Ethereum, enabling flexible appchains with advanced throughput and privacy options. Starknet's decentralized stack supports complex, high-performance applications.
• Polkadot Parachains: Specialized blockchains connected to Polkadot's Relay Chain, offering flexible governance and native tokens. Limited to 100 parachains with no smart contract functionality on the Relay Chain.
• Cosmos Zones: Appchains linked to the Cosmos Hub for seamless data and token transfers. Utilizes Tendermint Core for fast transactions and Cosmos SDK for development.
• Avalanche Subnets: Layer 1 or Layer 2 appchains with AVAX staking. Supports unlimited subnet creation with efficient consensus via the Snowball Algorithm.
• Polygon Supernets: EVM-compatible blockchains built on Polygon Edge with Ethereum security. Provides dedicated validators and flexible consensus models for customized networks.

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Difference Between Appchains and Blockchains

Appchains and blockchains both utilize decentralized, onchain technology but differ in their focus, architecture, and operational capabilities:

• Purpose: Appchains are designed to optimize performance for specific applications, ensuring they meet targeted use cases effectively. In contrast, general-purpose blockchains are designed to handle a wide variety of applications and transactions.
• Customization: Developers can extensively customize Appchains to meet precise project needs, taking advantage of their modular design to optimize specific functionalities. On the other hand, traditional blockchains follow standardized protocols, which inherently limit their ability to be customized.
• Performance and Scalability: By being optimally designed for particular domains, Appchains excel in managing performance and scalability for their intended use. General-purpose blockchains, however, can struggle with scalability when trying to support multiple different applications simultaneously.
• Interoperability: Appchains are naturally designed to be able to work with other systems without getting in the way. For other blockchains to reach the same level of integration, they often need extra tools like cross-chain bridges.

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Are Arbitrum Orbit Chains The Same as Appchains?

Arbitrum Orbit chains can function as appchains, but they are not limited to this role. Orbit chains offer flexible, EVM-compatible environments that allow developers to isolate compute resources and tailor their infrastructure according to specific needs.

While they can be used to host application-specific smart contracts (making them similar to appchains), Orbit chains are versatile enough to support a range of purposes—from hosting multiple apps to operating private, centralized services or even complex ecosystems.

Essentially, Orbit chains provide a flexible, permissionless framework for launching dedicated Layer 2 or Layer 3 chains, configurable in various aspects to meet unique business or technical requirements.

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Bottom Line

In conclusion, appchains are a focused improvement on blockchain technology. They let developers make highly customized, application-specific blockchains that improve performance, scalability, and the ability to work with other blockchains. Appchains offer a unique solution that general-purpose blockchains can't match because they can customize the blockchain environment to fit the needs of each project.

Similar to the now-hyped modular blockchains that separate consensus, execution, and data availability for enhanced flexibility, appchains are also tailored for optimization but differ by focusing exclusively on a single application rather than decoupling functional layers.

This specialization allows appchains to deliver peak performance and customization for specific use cases, rather than the broad adaptability of modular chains.