Avalanche has recently introduced and implemented subnets on its network, which allows anyone to create their own L1 blockchain on the network. Here’s why they will be a game-changer for blockchain technology.
Covered:
- Brief History of Scaling
- How Avalanche’s Subnets Solve Scaling
- Unlocking The Potential of Avalanche’s Subnets
First, it’s important to start off with a simple definition of what subnets on Avalanche actually are. Subnets are short for ‘subnetworks,’ and they are a feature on Avalanche that allows anyone to create their own L1 blockchain on the Avalanche network and can also operate as L2s for specific cases as well.
Brief History of Scaling
Let’s start with Bitcoin, the first and most successful cryptocurrency. Bitcoin started with predictable block times and low fees, but as it gained popularity, this all came to an end because block size limits were being exceeded. Within the Bitcoin community, there was a debate on how to deal with this and how to. The Bitcoin community decided not to increase the block limit. This led to the creation of Bitcoin Cash and the Lightning network. However, before the creation of Bitcoin cash, some of the Bitcoin community stepped away to create Ethereum, which would be created to allow complex things like smart contracts, which the Bitcoin community wouldn’t allow.
The Bitcoin cash community decided to increase block size limit to 32 megabytes (instead of 1) and honestly has had mixed success and has not truly been proved to be adopted as an alternative to Bitcoin. The lightning network was where most how most of the Bitcoin community wanted to scale. The Lightning network is an L2, and it has been worked on for a while now and is still far from perfect or complete. It works decent for simple payments, but it has failed to become significantly adopted above on-chain Bitcoin payments (however, they did recently just announce a partnership with Shopify).
The Ethereum community has had their own problems with scaling. They are using more complex L2 scaling solutions, but none of these solutions have really made Ethereum fees cheap, and gas fees can still be in the hundreds. Sometimes the Ethereum network will increase their on-chain capacity, but this has proved to not work well, as the cost to nodes is large compared to users’ benefits.
How Avalanche’s Subnets Solve Scaling
With Avalanche introducing subnets, it truly does change the game for scaling, as subnets offer a new form of scaling that has not been touched by any other project to date. A single subnetwork works similarly to an L2 but is a lot more robust, feature rich, and decentralized. Subnetworks are also similar to sharding, because they create a new but separate and connected instances of the same blockchain. The big difference between sharding and subnets is that Avalanche’s subnets are algorithmically generated and utilized and can be launched by users as needed.
Subnets have multiple implications for scaling. One unique thing is that they allow multiple competing ideas to coexist for a single cryptocurrency. For example, let’s say you had to ideas on how sharding can work, but they are incompatible. You could start two different subnets with these different sharding themes to test both out.
Another unique thing about the subnets on Avalanche is they allow for unlimited chain creation for different use-cases. Once developers have set up one chain, they can launch another one. Additionally, different validators can validate different subnets while they all validate the default subnet. If necessary, subnets can also launch their own subnets, creating an interconnected set of subnets for all types of different use-cases.
That’s what’s great about subnets. You simply just don’t run out of them. They are also very secure, because the security is maintained by staking the native token in conjunction with $AVAX.
Unlocking The Potential of Avalanche’s Subnets
So, subnets might not be the answer for everything, but they have a huge upside in terms of potential. They represent the unification of all crypto scaling ideas into a large, interoperable ecosystem. The transactions per second (tps) are much higher than Ethereum (15 tps) and Bitcoin (7 tps) too, with two options available the X-Chain (4500 tps) and the C-Chain (1000 tps).
Future subnets can launch different sharding schemes to see what works best, games can have their own subnets as well, and subnets can act as the de facto mechanism for launching cross-chain blockchain ideas. Another uses case could be launching federated chains in return for some sort of legal compliance and legal protections, similar to XRP.
Another potential scaling solution could be to use a subnet in order to move transactional throughput off of the consensus layer and on a purely cryptographic layer with simple network-gossiping, which could optimize scaling in a very major way. Essentially, the Avalanche subnet ecosystem will allow scaling solutions to compete, and the best will win over time. All the ideas from developers can occur simultaneously in Avalanche’s subnet ecosystem.
Regardless of your favorite blockchain strategy, Avalanche’s subnets will enable it. Anyone can launch a subnet, and they can be used for scaling, gaming, and enterprise use-cases.
What’s nice is that this subnet framework essentially makes L2s not necessary because subnets are functionally superior to L2s. Certain niche L2s are already launching on Avalanche subnets instead, and the subnet network will only continue to grow. The first subnet release was DeFi Kingdoms chain, and everything went more than swimmingly, which shows the true potential for subnets is already there, developers just have to start using them.
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