Monolithic vs. Modular Blockchain
As more and more dApps switch to app-specific blockchains, monolithic blockchains could become the "Yahoo" of blockchains
As more and more dApps switch to app-specific blockchains, monolithic blockchains could become the "Yahoo" of blockchains. Are you unsure whether to bet on monolithic or app-specific blockchains? Here's everything you need to know about app-specific blockchains.
In this post we will discuss:
What are app-specific blockchains?
Features of an app-specific blockchain
Benefits of app-specific blockchains
Drawbacks of app-specific blockchains
As a builder, should you use an app-specific blockchain?
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With the introduction of smart contracts, the #Crypto market has experienced exponential growth in recent years. Blockchain is now being utilized for a wide range of activities like insurance, gaming, music, identity, art, etc.
Given the growing number of users and adoption, the demand for blockchains has significantly increased. The majority of #Web3 apps currently operate in the paradigm of public blockchains like Ethereum. Smart contracts are used to build #dApps on these blockchains.
However, none of the public blockchains have effectively overcome the blockchain trilemma to date:
Scalability
Security
Decentralization
App-specific blockchains address this issue by modifying the blockchain's underlying infrastructure.
What are app-specific blockchains?
An app-specific blockchain (app-chain) is a blockchain that is customized specifically to operate a single application. It enables dApps to have their own blockchain instead of relying on public blockchains like #Ethereum.
Features of an app-specific blockchain
The app-chain enables the dApp to have its own dedicated blockspace on the blockchain. As a result, unlike on public blockchains, the dApp does not have to compete with other dApps for blockspace.
dApps have the ability to create their own tokens within their specific app-chain.
It can be used by the dApp's validators for staking purposes
It can be used as the dApps gas token
It can be used for in-app voting purposes
Example: @avalancheavax's Subnets
However, dApps that might not need their own token can also use the base layer's token. dApps can also utilize the validators from the base layer to validate their specific App-chain. Example: $AVAX
dApps can choose to have their own security mechanism within the app-chain or they can also share the security provided by the base layer. Since it is more difficult to attack a large validator base, the shared security model is more secure than the isolated security model.
Benefits of App-chains:
Sovereignty:
A dApp cannot vote on a new feature that is required specifically for that dApp on the public blockchain. App-chains enable dApps to solve problems with their own governance without affecting any other dApps in the ecosystem.
Performance:
When a single dApp is being excessively used, it increases gas fees and latency for other dApps on the public blockchain. However, in an app-chain, a dApp does not compete with others for computation and storage. This improves the dApp's performance!
Customizability:
In an app-chain, stakeholders of the dApp have complete control to modify the chain for their specific needs. App-chains also provide more flexibility. Developers can choose the programming language they prefer. Example: @cosmos
App-chains are especially beneficial for institutions and established businesses that want to enter the Web 3 world with a permissioned blockchain. App-chains allow them to employ whitelisted validators and also to conceal all business data from the outside world.
Drawbacks of App-chains
Fragmented Liquidity
Composability is limited
Unsecure bridging mechanisms
Weak security model (isolated security)
Much harder to deploy than a smart contract
Independent developer ecosystem
As a builder, should you use an app-specific blockchain?
It will be determined by the specific NEEDS and FEATURES that are crucial for the dApp. The consensus model provided by the base layer of your app-chain is also a crucial factor to take into account.
Some base layers do not allow independent app-chains to have their own consensus model while some allow the app-chain to choose between an independent consensus model and the base layer's consensus model. Choose the appropriate model for your dApp!
Example: You would be better off adopting an app-chain if you need high customizability and an independent governance system but are willing to give up the massive L1 liquidity. Teams must always assess the trade-offs and determine whether they are acceptable for them!
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