A Shallow Dive Into Avalanche Subnets
There is a game-changer advance in the crypto space, brought by Ava Labs, who is best known for the creation of the Avalanche Blockchain, an alternative layer 1(L1) proof of stake(PoS) platform upon which dApps, smart contracts, and custom blockchains can be created. And that custom blockchains is what we are about to unravel in this article. Avalanche DeFi ecosystem is currently sitting on a $21 billion TVL at the time of writing, according to DeFi Llama.
In short, the subnets are the Avalanche Ecosystem scaling solution, offering the possibility of individuals, companies, DAOs, or whoever wants to create a unique blockchain equipped with its own custom parameters. Subnets are dedicated virtual blockchains and basically, scales horizontally and provide easy tools for creators to build on Avalanche. In the words of the Ava Labs Head of DeFi, Luigi D'Onorio DeMeo:
A subnet is a dynamic set of validators that reach a consensus on the state of 1 or more blockchains. A subnet can validate many customizable blockchains with different VMs (Spaces VM / EVM).
You can choose to create a subnet to meet your own demand, defining complex rule sets as you require. You also can choose any virtual machine for each blockchain such as the EVM, CosmWASM, Solana's VM. Enabling existing dApps to be easily integrated.
The subnets can allow different degrees of security and decentralization, attending to specific demands for each use-case. Feeding frogs NFTs with flies does not require the same security and decentralization levels as settling equity transactions. Subnets provide a solution for enterprises that need control over the validators and to meet strict regulatory compliance.
In a primary stage, everyone in Avalanche uses the C-Chain, it is where all EVM-based dApps are built on. All the DeFi protocols, NFTs and GameFi projects are hosted in the C-Chain. But every time a project with huge transaction flow hits the network, like a trending NFT project minting, the gas fees become expensive and the network slows down. That is basically because things are happening all on the same chain. With subnets, each project can have its events on its own blockchain, with reduced gas fees, its own rules inside the Avalanche network and it does not impact the main chain.
The gas fee functionality on a subnet will allow the creators to choose the fee tokens that users pay so they will not necessarily be using $AVAX token. There is an even more exciting functionality, if the creators decide, they could make a gasless chain, making it practically free for the users to interact. Can you imagine the possibilities?
Subnets will add billions of value to Avalanche, let's see some examples from projects pioneering this fantastic tool:
● Crabada: An idle play-to-earn game on Avalanche. The game is migrating to its own subnet "The Swimmer Network" which is showcasing insane speed & performance in testnet. The game features crab breeding, marketplace, taverns, & more.
● Dexalot: Is the first Central Limit Order Book (CLOB) DEX on Avalanche. With support from Ava Labs and the Avalanche ecosystem, they are currently building their own subnet and will soon be operating in their own blockchain network. Trades will execute insanely fast without suffering from C-Chain traffic
● DeFi Kingdoms: An NFT powered play-to-earn MMORPG, will be among the first projects to take advantage of Avalanche subnets. The leading Harmony network dApp has announced the launch of its own blockchain, the DeFi Kingdoms Blockchain, also known as the DFK Chain, which will be the home of their previously announced Crystalvale expansion.
There are also a lot of other projects signalling its intentions to go forward in the application of the subnets' power into their ecosystems, such as Pangolin, Benqi Finance, Ascenders, Shrapnel, Imperium Empires, and the list goes on. Soon, the implementation of the subnets tech in any project will be a "must-have" on the checklist.
As said by the Avalanche Foundation director, Emin Gün Sirer:
Subnets will be the next growth engine in crypto, enabling novel functionality only possible with network-level control and open experimentation on a scale we haven’t yet seen. Smart contracts underpinned the amazing innovation in blockchains over the last five years, and no technology is better positioned to help carry on this tradition than Subnets.
We can all agree that there are moments in history where a change agent comes into play, completely overhauling the way we used to do our things, how we see the world and interact with each other, and probably, the Avalanche Subnets are one of these change agents.
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Crypto researcher, investor and trader. Technical and data analyst.