The Rise of App-chains:Driving Scalability, Security, and Performance

1. The Rise of Appchains Driving Scalability, Security, and Performance with Application-Specific Blockchains

2. The Idea of Application-Specific Blockchains • Application-specific blockchains are blockchains customized to operate a single application. • Instead of building a decentralized application on top of an underlying blockchain like Ethereum, developers build their own blockchain from the ground up. • Instead of having the application part of the blockchain be a Virtual-machine and decentralised applications built on top of it, appchains facilitates the development of decentralised application as the application of the blockchain itself. • Now let’s understand why, in many cases, it makes more sense to develop a decentralised application as an application-specific blockchain rather than on top of a Virtual-machine blockchain.

3. The Benefits of Appchains Scalability, customization, and security SECURITY SCALABILITY The attack surface of a Virtual-machine blockchain is large. Most of it comes from the complexity of the Virtual-machine itself. The security analysis is simpler in application-specific blockchains because you only have to consider how the different parts of your application interact with each other. Applications do not have to compete for block space in an appchain system. This improves the performance and throughput of the applications, as well as reduces the congestion and fees on the main network. CUSTOMIZATION In an appchain system, developers are free to choose a consensus mechanism, governance structures, and economic models. This gives developers more freedom and creativity to design their applications.

4. How Do Appchains Differ From L1s, L2s & Sidechains? Chain Type Layer 1 Blockchain Layer 2 Blockchain Sidechain Appchain An extension of an L1 blockchain that provides increased scalability and faster transactions A separate blockchain is linked to the main blockchain, enabling asset transfer between them. A customized blockchain built for a specific application or purpose The fundamental, base-level chain in a network that operates independently. Description Inherent to its consensus mechanism and separate operation. Relies on the security of the parent blockchain or may have its own security mechanism. Inherent to its consensus mechanism and independent operation. Relies on the security of the underlying Layer 1 blockchain. Security Offers improved scalability by processing transactions off-chain and settling on the main chain. Provides scalability by reducing the on-chain load and conducting transactions independently. Not always scalable due to limited transaction processing capacity. It can be scalable depending on its design and use case. Scalability May have reduced gas fees due to off-chain transaction processing. Typically has its own unique fee structure, separate from the main chain. It may have its own fee mechanism depending on its implementation. Usually incurs, gas fees for every on-chain transaction. Gas Fees Connects with L1 N/A Yes Yes Yes Interoperable with the main chain and other Layer 2 solutions. Interoperable with the main chain, enabling smooth asset transfers. Limited interoperability with other chains. It can be interoperable if explicitly designed for it. Interoperability Cosmos Zones, Substrate Parachain, Avalanche Subnet, Polygon Supernet, BNB Sidechains Ethereum, Solana, Avalanche, Shardeum Polygon zkEVM, Arbitrum, Optimism Examples Polygon PoS Chain

5. How An Application-Specific Blockchain Be Created? Three common approaches for creating such blockchains. Forking an existing blockchain: Using Frameworks (Cosmos SDK, Substrate): Leveraging existing app-chain solutions on L1s: Copying codebase, inherits security, faster development Modular tools, customization, interoperability Utilize parent chain's security with added scalability

6. Forking For Creating A New Blockchain Forking an existing blockchain involves creating a new blockchain by copying the codebase of an established one. It can be attractive option under specific circumstances. But changing an existing stack to meet your specific user requirements is significantly harder than starting from a solid base layer framework. Apart from this, there could be a few challenges of Forking: Security Challenges Getting Traction You are solely responsible for finding and convincing validators to participate in the new blockchain. A lack of sufficient unknown validators can lead to centralization and potential compromises in security. An entire new blockchain means gaining the community's trust in Zero. Convincing validators to accept rewards in the native token of the new blockchain can also be challenging, especially when they are accustomed to rewards in established cryptocurrencies.

7. • Substrate and Cosmos are popular frameworks for developing blockchain applications. • These frameworks provide fundamental components required to build a blockchain from scratch, and you just need to blend or modify them to match the purpose of your project. Using Frameworks Cosmos SDK, Substrate • They are better compared to forking a blockchain because of their high customization and flexibility. They also have active and supportive communities to help you test your MVP or get a Validator. • Each framework has its strengths and weaknesses. The best project choice will depend on each developer’s requirements and goals. • For example, Cosmos is focused on enabling interoperability between different blockchain systems, while Substrate is focused on providing a flexible and modular platform for building custom blockchain applications.

8. Cosmos SDK: An Overview • Cosmos works as the “internet of blockchains” with the Cosmos SDK and the Tendermint consensus mechanism at its core. Appchains are called “zones” and connect to the Cosmos main chain, creating an interconnected web of chains. • The Cosmos SDK is a development kit for building the application layer of a Tendermint-based blockchain, composed of a number of generic modules used for a blockchain’s most common functions, such as creating accounts, staking, and token management. • This open-source framework can be used for building multi-asset public Proof-of-Stake (PoS) blockchains, like the Cosmos Hub, and permissioned Proof-of-Authority (PoA) blockchains. • Anyone can create a module for the Cosmos SDK, and integrating already-built modules is as simple as importing them into your blockchain application. • The Cosmos SDK is a capabilities-based system that allows developers to better reason about the security of interactions between modules.

9. Examples of Cosmos-based Appchains Some examples of Appchains built on Cosmos are: dYdX : A large decentralized exchange   dYdX is a standalone Cosmos-based blockchain featuring a fully decentralized, off-chain order book and matching engine. Osmosis: Cosmos’ Liquidity Backbone Sei: A Hybrid Layer1 Sei is a Layer-1 blockchain designed exclusively for DeFi. But unlike dYdX or Osmosis, which build a blockchain for just one application, Sei is a blockchain for multiple applications that are all contained within a sector The largest DEX on Cosmos allows people to swap, earn, and build. As a PoS network, token holders participate in securing the blockchain through staking the protocol’s native token, OSMO $DYDX is the native token of the app chain, which needs to be staked by validators and used as the gas fee payment.

10. Option I Substrate: An Overview Fully modular and flexible framework Substrate is a fully modular and flexible framework that lets you compose a chain by selecting and customizing the infrastructure components best sited to your project Composing a runtime Each pallet defines specific types, storage items, and functions to implement a specific set of features or functionality for a runtime Building with custom pallets Customize your own substrate runtime with FRAME's modular pallets. Combine open source and custom pallets for specific app features and dunctionality Simplicity with the freedom to innovate Substrate offers creative control to build applications using open-source modules and custom. Rust macros. Innovate with low-level primitives. Building with templates and modules FRAME simplifies Substrate development by offering customizable pallets for common use cases. Choose from a library of modules to build your own runtime.

11. Option II Substrate: An Overview Simplicity with the freedom to innovate Substrate offers creative control to build applications using open-source modules and custom. Rust macros. Innovate with low-level primitives. Composing a runtime Each pallet defines specific types, storage items, and functions to implement a specific set of features or functionality for a runtime Fully modular and flexible framework Substrate is a fully modular and flexible framework that lets you compose a chain by selecting and customizing the infrastructure components best sited to your project Building with custom pallets Customize your own substrate runtime with FRAME's modular pallets. Combine open source and custom pallets for specific app features and dunctionality Building with templates and modules FRAME simplifies Substrate development by offering customizable pallets for common use cases. Choose from a library of modules to build your own runtime.

12. Examples of Substrate-based Appchains Acala: A DeFi hub for the Polkadot network Litentry: A cross-chain Identity Aggregator Moonbeam is also a substrate-based blockchain with a native token, GLMR. Acala is a decentralized finance hub that offers a multi-collateralized stablecoin, a trustless staking derivative, and a decentralized exchange platform. It is an appchain built on Polkadot using Substrate and parachains. It has its own native token (ACA) and governance model and leverages the security and interoperability of the Relay Chain. Litentry is a decentralized identity aggregator enabling users to link their identities across blockchains and platforms. It is an appchain built on Polkadot using Substrate and parachains. Litentry has its own native token (LIT) and governance model, and it leverages the security and interoperability of the Relay Chain.

13. Appchain Solutions Powered By L1s Subnet, Supernet & BNB sidechain • This might be the best solution if you want to leverage the benefits of app chains and love the security of L1 public blockchains. • These kinds of Appchains operate on top of existing Layer 1 (L1) blockchains and take advantage of their underlying security. • Such solutions typically have their own token. It is used for staking, as the application’s internal currency, and for voting. • Validators from the main network can help these appchains (if they agree to allocate resources to a particular application). Also, they can have their own validators with specific compliance requirements. • As of now, there are 3 major players in this segment. Polygon Supernet, Avalanche Subnet, and BNB Side chains.

14. Avalanche Subnet A Subnet is a sovereign network that defines its own rules regarding its membership and token economics. • It comprises a dynamic subset of Avalanche validators working together to achieve consensus on the state of one or more blockchains. • Each blockchain is validated by exactly one Subnet, while a Subnet can validate many blockchains. • Avalanche's advantages over other blockchains include scalability, finality, and speed. • – Avalanche has no limit on the number of subnets that can be created – The Snowball Algorithm processes transactions within 1-2 seconds – Avalanche has a high throughput with more than 4500 tps

15. Examples of Subnet-based Appchains DeFi Kingdoms Crystalvale: A play-to-earn, cross-chain, DeFi game Crabada’s Swimmer: A game that uses a unique fee-cover model DeFi Kingdom, a popular GameFi DApp on Harmony, launched its DeFi Kingdoms Blockchain (DFK Chain) on Avalanche as a subnet. The example of Defi Kingdom can also illustrate the extent of how customizable and flexible subnets can be on Avalanche. Crabada is a play-to-earn game operating on Swimmer Network’s subnet. Swimmer network built its own custom blockchain on Avalanche specifically for gaming, taking advantage of subnets' unique, flexible infrastructure.

16. Polygon Supernet • Supernets operate on the Polygon's Edge consensus client with PolyBFT consensus. • They leverage a native bridge to connect with an associated rootchain, enabling them to inherit its security and capabilities. • Supernets extend the block space available on the rootchain, providing scalability and interoperability for decentralized applications. • The Supernets ecosystem includes the most extensive suite of premium service providers, who offer various node and deployment infrastructure, indexers, explorers, oracles, and many other world-class tools necessary for building and deploying Supernets and their associated applications. (Zeeve is one of them) • Supernets employ a multi-faceted approach that leverages a combination of complementary scaling solutions to achieve maximum scalability. These solutions include layer-2 scaling techniques, parallelization, and, eventually, ZK technology.

17. Examples of Subnet-based Appchains Gnosis Pay/ Gnosis Card: a self-custodial Visa debit card   Gnosis Pay is a decentralized payment network, and Gnosis Card is a self-custodial debit card. They are utilizing a Zk-powered Supernet. It guarantees fast, secure, and scalable transactions on the Ethereum blockchain. OuterLife Utilizing a Zk-Powered Polygon Supernet:   PlayWay, the global gaming giant, has partnered with GameSwift to introduce and launch OuterLife as their entry into the web3 gaming world on Polygon Supernet. OuterLife is a web3 gaming accelerator and incubator, and it will allow PlayWay to integrate blockchain, NFTs into its famous simulator titles such as Animal Shelter, Farming Life, cafe owner simulator, and more.

18. BNB Application Sidechains (BAS) • BNB Sidechain is a modular framework for creating BNB Smart Chain-compatible sidechains. • Your BNB Application Sidechain is secured by a set of BNB Smart Chain mainnet validators. • You can either stake and run your own validator node(s) to secure your sidechain or onboard a third-party validator. • BNB Sidechains offers Full EVM support out of the box. You can also customize your EVM. • BNB Sidechain specifies the primary structure and configuration of the blockchain using special templates. • Developers automatically get access to products like a ready-made staking system, block explorer, SDK, API gateways, interfaces for governance, etc.

19. Examples of Binance Application Sidechains Antimatter B2:   Antimatter B2 is a low-gas BNB Sidechain that facilitates Antimatter dApps. Antimatter is a hub for decentralized on-chain financial products like DeFi derivatives and Financial NFTs. Meta Apes Game:   It is the first game launched on BAS. This allows them to have their own chain dedicated to Meta Apes only.

20. Starknet Announced Their Upcoming Appchain Ethereum Layer 2 Starknet has recently announced the launch of “appchains,” a framework facilitating the creation of multiple application-specific blockchains within its ecosystem. Developers can create appchains using Starknet Stack, the ecosystem’s native developer tooling. These chains will utilize STARK proofs for enhanced security. Paradex, a new crypto-derivatives exchange, is launching on Starknet’s first Appchain.

21. Launch Your Own Blockchain With Zeeve Instantly • Zeeve takes away the pain of building and launching your own Blockchain. From the choice of protocol (Polygon Supernets, Avalanche Subnets, BNB Sidechains, Cosmos or Substrate Parachains) to the preferred cloud(s) and the dev tools, Zeeve handles all for you so that you can focus on developing your dApp and go-to-market activities. • The AppChain infrastructure is not just a set of nodes. You need a comprehensive set of dev tools and plugins to launch your AppChain seamlessly. Data Indexing Protocol powered by Subgraphs RPC APIs and Staking Infrastructure White-labeled Explorer and Faucet RPC APIs and Staking Infrastructure White-labeled Explorer and Faucet Unmatched Security and Support Cross-chain bridges and plugins Cross-chain bridges and plugins Migration assistance Migration assistance