What is an Appchain? A 5-Minute Explainer

Ethereum is championing decentralized apps and smart contracts. But it’s a one-size-fits-all framework for web3.

Its strict global consensus, i.e. all peers must agree on each transaction, acts as a major hindrance for more specific use cases or applications. This also slows down the network’s upgrades and their implementation.

Imagine EA Sports decided to launch their next flagship game on a blockchain or Amazon aiming to build their supply chain’s track-and-trace system on a public blockchain?

Is there any network including Ethereum that’s capable, resilient, and reliable enough to withstand the massive traffic and deliver a full-fledged solution?

This is where Appchains come into the picture and take blockchain performance to a new level.

Now, what exactly is an Appchain and why is it important in web3?

In this blog post, we will explain what an Appchain is, how it works, live Appchain projects, and how to build on an Appchain.

What is an Appchain?

Application-specific blockchain or Appchain is a specialized blockchain built solely for a specific application. Unlike public blockchains that support many applications, these are optimized for singular use cases — ensuring efficient performance tailored to that application's needs. Cosmos and Polkadot brought up this concept of appchain back in 2016.

Theoretically, Bitcoin can be deemed as an appchain for digital gold.

Appchains grant developers the freedom to customize the blockchain environment to match their specific needs. This narrow-er focus allows developers to eliminate common challenges faced on multi-app platforms, paving the way for innovation without compromise.

What’s the alternative?

Providing full composability in traditional blockchains can lead to systemic vulnerabilities.

Hence, appchains make sense as they provide sovereignty to protocols. This sovereignty ensures apps and protocol don’t face cascading failures of the main blockchain.

Furthermore, most protocols are more suited to sovereign operations, allowing them to operate independently without the constraints of a larger ecosystem.

Now, what are the benefits of building on an appchain?

Benefits of Appchains

Here are some of the benefits of building on an appchain:

• Sovereignty: Appchains operate independently, reducing the risk of cascading failures from other systems.
• Customization: Appchains allow for tailored designs to meet specific application needs.
• Increased efficiency: Dedicated resources mean faster transaction speeds and reduced bottlenecks.
• Cost-Effective: Without the competition for block space, appchains avoid the gas fees spikes.
• Scalability: Dedicated resources can handle more users and transactions as the application grows.

How does an Appchain work?

Appchains function by creating their customized blockchain environments, tailored for specific applications or protocols.

Each appchain operates away from the main blockchain like Ethereum. This separation ensures that transactions and smart contracts related to a particular dApp are processed independently within the appchain.

Native tokens of appchains can serve multiple purposes including being used for gas fees to pay the validators securing the network. Appchains also operate with a generalized messaging system, which facilitates interoperability between chains enhancing the utility and flexibility of dApps.

Developers can customize dApp parameters like choosing the consensus mechanism, governance model, token standards, and many more.

Having briefly gone over how an appchain works, let’s explore a few key projects that take the appchains’ approach.

What projects are live on Appchains?

Platforms

Polkadot parachain are individual blockchains that run parallel within the Polkadot ecosystem. Parachains work similar to appchains as they are designed for specific use cases and can have their own consensus mechanisms, making them highly customizable and tailored for specific needs.

They connect to Polkadot’s main Relay Chain, benefiting from its security.

Cosmos zones are independent blockchains connected to the central Cosmos Hub. They are equivalent to appchains in the Cosmos ecosystem. They enable scalability by allowing multiple blockchains to interoperate.

Each Zone can be designed for a specific application, and they interact and transfer data and tokens via the Inter-Blockchain Communication (IBC) protocol.

Avalanche subnets are sets of validators working together to achieve consensus on the state of a set of blockchains. They allow for the creation of custom, application-specific blockchains.

Each Subnet can have its own set of validators and can be customized to have its own bespoke rules, including how the blockchain should be validated or even its own virtual machine.

Projects

dYdX v4 showcases the power of appchains with its fully sovereign, open-source blockchain software, eliminating dependence on external systems. Building on the Cosmos SDK, dYdX v4 offers unparalleled customization, controlling everything from consensus to transaction types.

Also, this allows dYdX to decentralize their orderbook and the matching engine specifically which wouldn’t be possible on any other blockchain network.

Axie Infinity — a play-to-earn game where players collect, breed, and battle Axies — operates on the Ronin chain, which is an appchain-like solution for web3 games. Ronin was custom-made for Axie Infinity to address the high gas fees on Ethereum, making gameplay more affordable.

DeFi Kingdoms, a popular web3 game, lives on DFK Chain, an Avalanche subnet. The vision of DFK Chain is to become the gaming appchain that community members and projects launch their blockchain games on.

Avalanche subnets are a scaling solution that employ a changing set of validators to reach consensus on the state of all the subnets.

How to build on an Appchain?

Now, having learnt about the various projects and platforms exploring the appchain ecosystem, let us see how we can build appchain-based dApps.

Choose the right framework

Selecting the most suitable appchain framework is the key for the working of dApps. Your dApp's primary function largely determines the best framework.

For a blockchain game, a Ronin network or Arbitrum’s new Xai network would be optimal.

Similarly, for a DeFi based dApp, Cosmos SDKs and Polkadot parachain are better options.

Develop smart contracts

Smart contracts are the backbone of any dApp. They can range from simple tasks like token transfers to complex ones like liquidity pooling and liquid staking.

Rather than building them from scratch, developers can use thirdweb’s extensive library of smart contract templates to simplify the process of creating dApps. Likewise, thirdweb also offers other tools and infrastructure for developers to build and deploy web3 applications.

The future of Appchains

Appchains are changing the game in blockchain. Instead of a one-size-fits-all approach, they are bespoke blockchains — tailored just for the specific use case or application. These dedicated chains streamline operations and optimize performance.

Developers who are keen on building on appchains can make their lives easier by using thirdweb’s developer tools and SDKs to write, deploy, and manage web3 apps.

If you have any questions, join 40,000+ other builders in our Discord community or reach out to the team directly for more info on how to get started with Appchains.

And if you want to start building web3 apps on Ethereum, get started with thirdweb’s web3 tools and SDKs - they’re free!