Understanding Appchains with Covalent
Appchains are a relatively new concept in web3 designed to enhance blockchain applications' scalability, interoperability, and modularity. This article addresses the following questions:
What are appchains?
How do appchains work?
What benefits do appchains offer developers?
What are appchains?
Appchains, short for application-specific blockchains, are tailored to the specific requirements of an application, use case or industry. This customization can increase efficiency, scalability, and security compared to general-purpose blockchains like Ethereum, which serve a wide range of applications.
Appchains typically have their own consensus mechanism, rules for data storage and verification, and native tokens or cryptocurrencies that are used within the application. They can operate independently or be connected to other blockchain networks.
How do appchains differ from L1s and L2s?
Layer 1 blockchains are main blockchains like Ethereum or Avalanche, on which multiple web3 applications operate. Appchains operate on top of existing Layer 1 blockchains to take advantage of their security and gas fees but improve on the existing Layer 1 blockchain structure to give developers more freedom.
Layer 2 blockchains (L2s) are scaling solutions for Layer 1 blockchains like Ethereum, where a separate blockchain completes some tasks of the main blockchain. L2s can simultaneously operate for many different apps and are a generalized scaling solution for the L1 blockchain on which they operate, whereas appchains are app-specific.
In summary, while L1 and L2 blockchains are designed to operate multiple applications, appchains are exclusively designed to operate one specific application. Appchains provide developers with customizability, performance advantages, and increased ownership while leveraging the security of the main blockchain. They are a solution for developers who need more freedom over their app's economic structure, governance structure, and consensus algorithm than is possible on a public Layer 1 blockchain or a generalized Layer 2 solution.
On the other hand, a sidechain is a separate blockchain attached to the main blockchain (like Bitcoin) through a two-way peg. This allows assets to be moved between the two blockchains, with the sidechain providing additional functionality or scalability that the main blockchain may not have.
So while both appchains and sidechains allow for greater scalability and flexibility in blockchain applications, appchains are built on top of an existing blockchain. In contrast, sidechains are separate blockchains attached to the main blockchain.
Analogy 🏡
Imagine a large house (representing the main blockchain network) with multiple floors. The ground floor is the primary layer (L1) where all transactions occur. However, as more people start using the house, the ground floor becomes congested, and some people start moving to other floors.
The first floor represents sidechains. It is still part of the main house but has its own rules and functions. Some people prefer to stay on this floor because it allows them to perform specific tasks without interfering with the ground floor's operations.
The second floor represents appchains. These are like small apartments within the house where a group of people with similar interests and needs can perform their own tasks and transactions without disturbing others on the ground or first floors.
Finally, the top floor represents Layer 2 solutions. It is like an extension of the house, built on top of the existing structure, but with its own set of rules and functions. This floor provides additional scalability and functionality to the house's existing infrastructure without impacting the lower floors' operations.
In summary, the house represents the main blockchain network, the ground floor represents the primary layer (L1), the first floor represents sidechains, the second floor represents appchains, and the top floor represents Layer 2 solutions. Each floor has its own set of rules and functions, and people can move between floors based on their needs and preferences while still being part of the same overall network.
How do appchains work?
In general, appchains work by using the L1 blockchain as the anchor or security layer and building a separate chain on top of it that can process transactions more efficiently and with lower fees. It can be designed to offer features such as faster confirmation times, lower transaction fees, or specialized smart contract functionality.
Appchains typically use various techniques to ensure that they remain secure, despite being built on top of an L1 blockchain. For example, they may use sidechains, plasma chains, or similar technologies to enable fast, secure, and low-cost transactions. They may also use various consensus mechanisms, such as Proof of Stake or Byzantine Fault Tolerance, to ensure that transactions are validated and recorded correctly.
Overall, appchains offer a powerful way to scale blockchain technology and enable new use cases and applications while maintaining the security and decentralization of the underlying L1 blockchain.
Why are appchains important for developers?
Appchains provide several benefits for developers, including:
⚖️ Scalability: By deploying dApps on their own appchains, developers can avoid network congestion and high gas fees on the main chain, allowing for greater scalability and better user experience.
🌎 Interoperability: Appchains can communicate with each other through common protocols and standards, allowing for the creation of decentralized networks that span multiple chains.
🧰 Modularity: Appchains can be tailored to specific use cases and updated independently of the main chain, allowing for greater flexibility and innovation.
🚔 Security: By anchoring their state to the main chain, appchains can benefit from the larger network's security while maintaining their own independent security mechanisms.
Popular appchain ecosystems
Polkadot: Polkadot is a multi-chain platform that enables interoperability between different blockchain networks. Its unique architecture allows multiple specialized blockchains, or parachains, to operate in parallel and exchange information.
Cosmos: Cosmos is a decentralized network of independent blockchains that can communicate and exchange data with each other. Cosmos uses a hub-and-spoke model where each Cosmos ‘Zone’ is connected to the Cosmos Hub, which is the center of the network.
Avalanche: Avalanche subnets are independent blockchains created within the Avalanche network. These subnets can be customized to meet the specific needs of different decentralized applications (dApps) and can interact with each other seamlessly using the Avalanche consensus mechanism.
SKALE: SKALE is a decentralized network that provides a platform for creating and running high-performance, customizable appchains. It is designed to be scalable, secure, and easy to use, making it a popular choice for developers who want to build decentralized applications quickly and efficiently. One of the unique features of SKALE is its use of "elastic sidechains," which can be dynamically resized to meet changing demand. This allows developers to scale their applications without worrying about performance issues or high transaction fees.
Polygon: Polygon Supernets is an ecosystem of appchains built on top of the Polygon network, which uses Ethereum as its underlying blockchain. Developers can use Polygon Edge, a blockchain-building platform, to create their own EVM-compatible appchains with customizable features. These appchains can be staked with MATIC tokens and operate under a Proof-of-Stake or Proof-of-Authority model. Each Supernet is serviced by a set of validator nodes, which ensures security and stability.
Why use the Covalent API for appchain Data?
As mentioned, appchains are designed to be modular and flexible, meaning each appchain can have its unique data structure and format. This can make it challenging for developers to access and analyze data across different appchains. That's where the Covalent API comes in.
Covalent is a leading appchain indexer that provides a unified blockchain API, making it easy for developers to access appchain data in a standardized format. The Covalent API supports many appchains, including Boba, Swimmer Network, DeFi Kingdoms, and more. This means that developers can access data from multiple appchains using a single API, reducing the complexity of their code and saving development time.
Using the Covalent API also provides several other benefits, such as:
🕹️ Simplified Data Querying: The Covalent API provides a simple and intuitive query language that allows developers to retrieve data efficiently. The API can also be used to aggregate and filter data from multiple appchains, making it easy to get a comprehensive view of the data.
🤔 Standardized Data Response: The Covalent API provides a standardized data response across all supported blockchains, including appchains, so developers don't need to worry about data structure or format differences.
💸 Cost-Effective: Using Covalent eliminates the need to run and maintain their own node infrastructure for each appchain they want to access. Instead, developers can rely on the Covalent API to handle the heavy lifting of indexing and storing appchain data.
⏳ Time-Saving: Covalent maintains a low latency of 2 blocks behind the main network, so developers don't need to manually update their data sources or wait for delayed updates from different appchains. This can save developers time and ensure their applications always work with the latest data.
Conclusion
In conclusion, appchains are a promising new concept in the blockchain world that offer numerous advantages to developers. They are designed to serve the specific needs of a particular application or use case, providing greater customizability, scalability, interoperability, and modularity compared to general-purpose blockchains. Appchains are built on top of existing blockchain platforms. They have their own consensus mechanism, governance structure, and smart contract language, allowing developers to choose the best fit for their use case. Appchains offer several benefits: scalability, interoperability, modularity, and security. The Covalent API can make accessing and analyzing data across different appchains easier for developers. Overall, appchains are a solution for developers who need more freedom over their app's economic structure, governance structure, and consensus algorithm than is possible on a public Layer 1 blockchain or a generalized Layer 2 solution.