Introduction
Avalanche is an open-source platform for launching highly decentralized applications, new financial primitives, and new interoperable blockchains. A key feature of Avalanche is its subnet architecture, which allows for the creation of customizable blockchains within the Avalanche ecosystem.
But before getting to know subnets that help form consensus for many blockchains why we don’t look at the evolution of blockchain for a bit?
![Avalanche Subnets]()
Evolution of Blockchain Generations
In the development of blockchain technology, several distinct generations have emerged, each offering unique features and capabilities.
- First-Generation Blockchains
- Single Chain
- Single Asset
- Example: Bitcoin, which focuses solely on the transfer of its native asset, BTC.
- Second-Generation Blockchains
- Single Chain
- Multiple Asset
- Example: Ethereum, which supports not only its native asset, ETH but also various tokens and smart contracts.
Third-Generation Blockchains.
- Third-Generation Blockchains
- Multiple Chain
- Multiple Asset
- Example: Avalanche, which allows the creation of multiple customizable blockchains, each capable of handling various assets and tailored use cases.
![Evolution of Blockchain]()
These generations illustrate the progression from simple, single-purpose blockchains to complex, versatile platforms that are capable of supporting various applications and assets. This evolution has paved the way for innovative features like Avalanche's subnets.
Introduction to Subnets
Subnets (short for sub-networks) are a unique feature of Avalanche that represents the heights of the evolution in blockchain technology. They enable the building of customized and compatible blockchains within the Avalanche ecosystem. Each subnet may function independently, with its own rules and validators, providing more scalability, customization, and independence.
What is a Subnet?
A subnet is a dynamic set of validators that collaborate to reach a consensus on the state of one or more blockchains. Subnets can be private or public, with features adjusted to different use cases. This approach overcomes the constraints of previous blockchain generations by allowing numerous specialized blockchains to live and interact.
Each blockchain belongs to a single Subnet, however a Subnet can verify many blockchains. Each blockchain can create its own virtual machine (EVM, modified EVM, or completely new VM). Validators can be members of many subnets.
![Subnet]()
Source: Features and Benefits of Subnets | Avalanche Academy
Avalanche allows you to create multiple interconnected subnets, each of which may operate independently while however retaining the ability to communicate with the other subnets. Validators can participate in multiple subnets at the same time, and they are all connected to the principal network, which is a specific subnet.
Avalanche subnets overcome the limits of regular blockchains by allowing validators to comply with to particular criteria such as Know Your Customer (KYC) and Anti-Money Laundering (AML) processes, specific licenses, geographical restrictions, and specialized hardware requirements. These personalized, application-specific blockchains address these issues by moving away from the monolithic blockchain framework of the past.
Architecture of Avalanche Subnets
The Avalanche's architecture is designed to be modular and flexible, allowing for the seamless creation and management of subnets.
The primary components of this architecture include
- Primary Network: The default network that all validators participate in.
- Custom Subnets: Independent networks with their own blockchains and consensus rules.
- Validators: Nodes that validate transactions and secure the network.
Features and Benefits of Subnets
Subnets provide several advantages, making them an attractive choice for developers and businesses.
Within the Avalanche network, subnets operate independently. Their creators have complete control over the execution logic, fee structure, state management, networking, and security measures. Subnets allow the Avalanche network to scale efficiently by operating independently of other subnets and the core network. This autonomy reduces latency, increases transactions per second (TPS), and lowers transaction costs.
Some of the benefits of using a subnet system are
![Features and Benefits of Subnets]()
1. High Scalability
Subnets enable horizontal scaling by allowing multiple blockchains to operate in parallel.
Scalability is a key feature of multi-chain systems, which are achieved by running chains in numerous separate threads. The parallel processing of transactions improves scalability. Congestion or charge increases in one chain will have no effect on other chains.
2. Customizability
A subnet can be customized by its designer to match their specific demands. Subnets may be customized for unique use cases, including consensus processes, virtual machines, and governance frameworks. This can happen in a variety of ways, such as introducing a customized gas token, utilizing a different Virtual Machine (e.g., a WASM or Move VM), or restricting access to the Subnet. This is difficult to accomplish in a single-chain system since most users would have to agree.
3. Interoperability
Subnets may interact and transfer assets with one another, resulting in a diverse ecology of interconnected blockchains. This interoperability enables tokens, NFTs, and other digital assets to travel freely between subnets without the need for sophisticated bridging procedures. Interoperability improves security and dependability by sharing security resources and validator networks, while also allowing for real-world interfaces with external systems and other blockchain protocols, resulting in a flexible platform for a wide range of applications.
4. Independent from other Subnets
Separating the ecosystem into multiple chains results in independence from one another. If congestion occurs on one chain as a result of heavy network activity (for example, an NFT drop, strong fluctuation in token values, or the introduction of a new game), other chains remain unaffected. With only one chain, this congestion affects everyone, including those unrelated to the origin of the spike in activity.
This reduces an issue that many organizations have, which prevents them from using blockchain and beginning transactions for extended period due to high gas prices caused by network congestion.
Avalanche is not the only multichain blockchain solution that uses a subnet design. Some of them include Polkadot, Cosmos, and Polygon Supernets.
Use Cases and Applications
Avalanche subnets are versatile and can be used in a wide range of applications, catering to diverse industries and use case scenarios.
1. Decentralized Finance (DeFi)
Custom subnets can be created specifically for decentralized finance (DeFi) applications, offering specialized features tailored to the needs of DeFi protocols. These subnets can leverage Avalanche's high throughput and low latency to provide users with fast and cost-effective transactions, facilitating activities such as decentralized trading, lending, borrowing, and asset management.
2. Enterprise Solution
Enterprises can leverage private subnets within the Avalanche network to build secure and compliant blockchain solutions tailored to their specific requirements. Private subnets offer enhanced privacy and control over data, making them suitable for applications such as supply chain management, identity verification, and regulatory compliance. Enterprises can customize their subnets to integrate with existing systems and processes, ensuring seamless integration and interoperability.
3. Non-Fungible Tokens (NFTs) and Gaming
Subnets can be used to create dedicated networks optimized for non-fungible tokens (NFTs) and gaming applications, providing users with a seamless and immersive experience. NFT subnets can support the creation, trading, and ownership of digital assets such as art, collectibles, and virtual real estate, leveraging Avalanche's high throughput and low transaction fees to enable frictionless transactions and vibrant marketplaces. Gaming subnets can host decentralized gaming platforms, enabling developers to create and deploy decentralized games with features such as in-game asset ownership, player-driven economies, and provably fair gameplay.
Security Considerations
While subnets offer numerous benefits, it's crucial to consider security implications.
- Validator Security: Ensuring that validators are secure and well-distributed is essential to prevent attacks and ensure network integrity.
- Consensus Rules: Careful design of consensus rules and mechanisms is necessary to avoid vulnerabilities and ensure robust operation.
- Compliance: For private subnets, ensuring compliance with relevant regulations and standards is critical.
Conclusion
Avalanche's subnet architecture is a significant improvement in blockchain technology, solving previous generations' shortcomings through improved scalability, customization, and interoperability. Subnets provide a versatile and efficient foundation for a wide range of applications, including DeFi and enterprise solutions, NFTs, and gaming, by allowing the establishment of numerous, independently functioning blockchains.
This breakthrough keeps Avalanche at the forefront of blockchain development, providing a strong and adaptable environment for developers and enterprises together.
FAQs
Q. What are the main advantages of using Avalanche subnets?
Ans. Avalanche subnets offer enhanced scalability by allowing multiple blockchains to operate in parallel, customizability to meet specific use cases, and interoperability for seamless asset transfers between subnets, creating a versatile and efficient blockchain ecosystem.
Q. How do Avalanche subnets ensure compliance with regulations?
Ans. Avalanche subnets can be tailored to include regulatory measures such as KYC and AML processes. Private subnets can implement specific compliance rules, ensuring regulatory adherence without affecting the broader network, making them ideal for enterprise applications.
Q. Can validators participate in multiple subnets simultaneously?
Ans. Yes, validators can join multiple subnets, enhancing network security through shared validation, optimizing resource use, and increasing the network's flexibility and scalability by supporting diverse blockchain requirements.