What Are Appchains (Application-Specific Blockchains)?

Key Takeaways

• Appchains are specialized blockchains designed to serve the needs of individual applications.

• Appchains can enhance scalability through application-specific resource allocation and offer more flexibility via modular architecture.

• Some examples of appchains include Polkadot parachains, Avalanche subnets, and Cosmos zones.

Introduction

Appchains emerged as blockchains designed to meet the demands of individual applications. In this article, we will explore what appchains are, go through some of their benefits, compare them with layer 1 blockchains, and take a look at a few examples of appchains.

What Are Appchains?

Appchains are specialized blockchains designed for a specific function. Unlike general-purpose blockchains that offer a variety of applications, appchains are focused on individual applications. This approach allows for transaction processing, fees, smart contract functionalities, and many other factors tailored to the needs of particular applications.

How Do Appchains Work?

Appchains operate based on the main principles of blockchain technology, but with changes that make them tailored to the needs of individual applications. Each appchain dedicates its resources to a specific task, ensuring that they are not spent on unrelated applications. 

Appchains can implement various consensus mechanisms, such as Proof of Work (PoW) or Proof of Stake (PoS), that are most suitable for individual applications. For instance, an appchain for a financial application might choose to use a different consensus mechanism than one designed for supply chain management. 

In addition, smart contracts on appchains can be specifically designed to meet the demands of individual applications. This allows for more complex contract logic that can enhance the functionality and efficiency of individual applications.

Typically, the architecture of full-fledged appchains is composed of five layers:

1. Network layer. This layer manages the peer-to-peer network functionalities. It enables nodes within the blockchain to communicate, exchange data, and participate in transaction validation processes.

2. Application layer. This layer hosts applications that run on the blockchain. It offers interfaces that developers can utilize to build, deploy, and oversee the operations of decentralized applications (DApps).

3. Data layer. The data layer is responsible for organizing and storing blockchain information. This includes maintaining the blockchain's state, recording transaction details, and handling smart contract data.

4. Consensus layer. This layer implements the consensus algorithm of the appchain. It can incorporate various consensus algorithms, such as Proof of Work (PoW) or Proof of Stake (PoS).

5. Smart contract layer. This layer facilitates the automation, verification, and enforcement of smart contracts.

Benefits of Appchains

Scalability

Appchains allocate resources to focus on a specific task or function. This specialization can result in higher transaction throughput and reduced latency for individual applications. This helps address the scalability challenges of general-purpose blockchains.

Modularity

Appchains are characterized by their modular architecture, distinguishing them from general-purpose blockchains that typically feature a monolithic design. The modular structure provides developers with the flexibility to customize the blockchain's functionalities according to the specific needs of individual DApps.

Interoperability

Appchains are designed to support interoperability, facilitating communication between different DApps. This enables users of one application to easily access the advantages of another.

Appchains vs. Layer 1 Blockchains

Architecture

The architecture of appchains is adaptable and can be aligned with different blockchain layers, allowing them to either be built on top of existing networks or operate independently. In contrast, layer 1 blockchains feature a uniform structure with a set of defined rules that network participants must follow, limiting their ability to adjust to the specific needs of individual DApps.

Consensus algorithm

Appchains can implement consensus mechanisms that are most suitable for their particular use case, which can vary depending on the underlying layer they are built upon or if they operate autonomously. Conversely, layer 1 blockchains are typically bound to their inherent consensus models, such as PoW or PoS, which may not be as adaptable to specific applications but provide a stable and uniform method of reaching consensus.

Scalability

Appchains are designed to prioritize scalability within the context of individual applications, which can result in high transaction throughput and low latency. In contrast, layer 1 blockchains often face scalability issues as they accommodate a wide variety of applications.

Appchains vs. Sidechains

Although both appchains and sidechains communicate with the main chain, sidechains are designed to perform a variety of tasks. So, unlike appchains, sidechains serve multiple purposes and are not tailored to a specific application.

Examples of Appchains

Polkadot parachains

Polkadot's parachains are individual blockchains that run in parallel within the Polkadot ecosystem. They are connected to Polkadot's Relay Chain, benefitting from its security. Parachains are identical to appchains as they can have their own tokenomics, governance models, and functionality, making them tailored to the specific needs of individual applications.

Avalanche subnets

Avalanche subnets represent separate blockchains created within the Avalanche network. They enable the development of application-specific blockchains, with each subnet supported by its unique set of validators that agree on the state of a set of blockchains.

Cosmos zones

Cosmos zones function as independent blockchains linked to the Cosmos Hub, serving as the equivalent of appchains in the Cosmos ecosystem. They use the Inter-Blockchain Communication (IBC) protocol to transfer data across the network.

Closing Thoughts

Appchains are blockchains designed to serve the specific needs of particular applications, providing greater scalability and flexibility compared to general-purpose blockchains. They are customizable, allowing developers to pick the specific parameters that fit their applications. As such, appchains can help enhance the performance and efficiency of individual applications while reducing the load on general-purpose chains.