While most struggle to gain familiarity with the increasing role of distributed ledgers in the wider economy, developers are already delving deeper into providing more advanced functionality. Right now, software engineering teams are working on technology that will become integral to global functioning in the years to come.
One critical innovation in Web3 that will facilitate wide-scale adoption is thesubnet. While it is possible to explore these concepts in-depth, it is much better to simply give a high-level overview. When the complicated terminology is removed, the core concepts are actually very relatable.
What Is The Crypto Scalability Problem?
In crypto “lingo,” blockchains are divided into Layer One (L1) and Layer Two (L2). Again, this sounds a lot more complicated than it is. L2 blockchains are those that address specific problems that an L1 blockchain cannot cope with. They are placed “on top” of earlier blockchains.
A prime example is Bitcoin. Bitcoin, the first cryptocurrency, was a wonderful innovation for its time. But it quickly ran into massive scalability problems, with high fees and network congestion. So it needed a L2 solution, which is known as the Lightning Network
. In the same way, Ethereum ran into issues as an earlier crypto ecosystem. So it needed to resort to an L2 solution in the form of Plasma.
Unfortunately, these L2 solutions are not doing what they are supposed to do. Ethereum is still the primary ecosystem on which dApps are built, and NFTs are traded (as ERC-20 tokens). Still, it has massive fees, which is why developers and market newcomers are looking towards alternatives such as Avalanche.
are not resolving the problem of scalability. High fees and slow speeds are powerful indicators that cryptocurrency cannot go mainstream. If cryptocurrency needs global adoption, it needs to be able to cope with more people on the network. L2 solutions have not yet proven up to the mark. Subnets are a much more versatile and effective technology.
Exploring Subnets Within Web3
Subnets are a game-changer for crypto scalability. A subnet is merely a sub-level network within a larger network. Each blockchain is simply a network - a network being the number of nodes/servers that communicate with each other through distinct protocols. The subnet will take attributes from the parent chain/larger network but will have a specific use case.
Subnets are closely related to the concept of sharding. They are very reliable, efficient, and better at solving scalability than L2 blockchains. The major difference between subnets and sharding is that subnets can be created at will by customers and developers.
While sharding is built into the architecture, you can launch infinite subnets to see which ones scale the best while implementing the sharding model. In other words, you can create infinite subnets that take the best attributes from the initial blockchain network. These subnets can be put to a variety of different uses.
Subnets Are Already Taking Over
Avalanche is a prominent blockchain that has recently launched subnets, allowing many newer Web3 projects to build their own ecosystems. Ayoken Labs
has launched its token on the Avalanche C-Chain. Ayoken is a digital collectibles marketplace that connects creators to global audiences. With a vision to onboard 10 million new crypto users & digital collectible owners, Ayoken Labs aims to catalyze the mainstream adoption of crypto in emerging markets. It is onboarding creatives to the metaverse. And it selected Avalanche to assist with this venture.
offers C-Chain, X-Chain, and P-Chain subnets. P-Chain is for staking, X-Chain is for sending and receiving transfers, and C-Chain is for smart contracts (broadly speaking). These subnets allow for distinct chains to be used for specific purposes. But they are all validated by the primary network, taking its benefits with them.
is another web3 company that aims to be a major player in the subnet/sidechain space. Ankr is a major Web3 infrastructure provider that launched the first Binance Smart Chain Application Sidechain (BAS) testnet, along with Celer and NodeReal.
The BAS Testnet is a framework for creating side chains dedicated to applications in the BNB Chain ecosystem. Ankr is also the main infrastructure partner for Binance, Fantom, and Polygon and has helped these major firms to scale. Ankr also launched the first game on the Binance Application Sidechain (BAS).
It is currently the leading RPC provider and offers a cost-effective mechanism to build, deploy, and scale in Web3. Its low latency and high resilience levels can be observed from many tracking tools.
As a major infrastructure provider, Ankr is also looking to launch subnets so that Web3 projects can grow from a stable, fast, and efficient foundation. This enables projects to test and grow without being “locked-in” to a previous blockchain.
Crypto Scalability Issues: A Thing Of The Past
Subnet functionality is going to become a core necessity to build the future of Web3 and resolve the crypto scalability issue.
It resolves perhaps the most pressing issue observed with previous blockchains. Development teams can tweak and test in secure environments and can create as many subnets as they wish.
These innovations will ultimately help to grow the wider ecosystem and help to quickly replace legacy systems that are already obsolete.