Avalanche Subnets Explained

Summary: Avalanche Subnets revolutionize blockchain scalability and customization, enabling the creation of specific networks within the broader Avalanche ecosystem. With over 107 Subnets powered by more than 1,478 validators, Avalanche demonstrates vast capabilities in transaction handling, security, and decentralized application support.

These Subnets offer a flexible architecture that caters to a wide array of applications, from DeFi platforms to onchain gaming, enhancing user experience and network efficiency.

What is an Avalanche Subnet?

An Avalanche Subnet, or "subnetwork," is essentially a group of nodes (validators) dedicated to reaching consensus on transactions across one or more blockchains. It's like having a mini-network within the larger Avalanche ecosystem, empowering developers to craft bespoke blockchains tailored to specific applications. This architecture not only propels innovation but also elegantly solves scalability issues by spreading the transaction load across various subnetworks, each governed by its own set of rules and validators.

Subnets shine as a scalable solution, enabling the creation of custom networks alongside the Primary Network. This structure allows Avalanche to scale efficiently, facilitating high transaction volumes without overwhelming the main network. Every validator on a Subnet stakes a minimum of 2000 AVAX to participate in the Primary Network, reinforcing the platform's security and decentralization. In essence, Subnets are pivotal for building decentralized applications that demand high throughput and low costs, marking a significant leap in blockchain technology's evolution.

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How to Create a Subnet on Avalanche?

Setting up a Subnet on Avalanche gives you the advantage of a flexible, scalable, and customizable blockchain network. Before you start, ensure you have at least 1 AVAX token in your Avalanche wallet to cover the initial costs. Here's your roadmap to creating a Subnet on Avalanche:

1. Select Validators: Aim for a minimum of 5 validators to ensure your Subnet operates smoothly. Each validator should have a stake of at least 2000 AVAX.
2. Pick Virtual Machines (VMs): Choose from a variety of VM options such as EVM, AvalancheVM, or specialized VMs like BlobVM designed for binary storage.
3. Establish Rules and Criteria: Specify what features and capabilities your validators should possess. You can choose between different consensus mechanisms like Avalanche or Snowman.
4. Deployment: Use Avalanche's suite of development tools to bring your Subnet to life, incorporating your selected VMs, validators, and rules.

After deployment, your Subnet operates autonomously from the primary Avalanche network, offering benefits like reduced latency and higher transactions per second (TPS). For enhanced privacy, opt for a VM like EVM that supports private transactions.

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How Many Subnets are Live?

As of today, the Avalanche network boasts over 107 Subnets, a significant jump from the previously reported 84. This network is supported by a robust contingent of 1,478 validators who collectively staked an impressive 250,547,682 AVAX. Each validator plays a crucial role in the Primary Network as well, contributing to the smooth operation of the X, P, and C blockchains.

These Subnets collectively have facilitated nearly 997 million transactions, averaging a throughput of 11.62 transactions per second. The network's vibrancy is further highlighted by its 78,243 daily active addresses and the deployment of 418,759 smart contracts. This snapshot of activity and infrastructure underscores Avalanche's expansive scale, capability, and ongoing growth.

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Examples of Avalanche Subnets

A prime illustration of an Avalanche Subnet in action is the DeFi Kingdoms blockchain, also known as DFK Chain. Created through collaboration with Avalanche, this Subnet powers the DeFi Kingdoms: Crystalvale expansion and innovatively utilizes its native JEWEL token for gas payments. This strategic use of a native token simplifies transactions for users, ensuring a more streamlined and cost-efficient experience.

DFK Chain introduces a distinctive model for gas fee allocation: 25% is directed to validator wallets, encouraging network support; 50% is strategically burned to bolster JEWEL's market value; and the remaining 25% is earmarked for community rewards, fostering a sense of participation and ownership among users. With a total value locked at $3.97 million, DFK Chain stands as a testament to how Avalanche Subnets can be custom-tailored to meet specific needs, simultaneously enhancing token utility and contributing to network robustness.

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Potential Subnet Use Cases

Avalanche Subnets offer a truly flexible architecture that can enable a variety of app-specific chains or even layer 2 environments akin to Arbitrum or Optimism. Here are some potential use cases:

• Decentralized Finance and App-Specific Applications: Subnets are ideal for hosting DeFi platforms and specialized financial applications like perpetual exchanges. They offer the speed and scalability needed for platforms similar to GMX or DYDX, ensuring efficient and secure financial transactions.
• Onchain Gaming: Games like DeFi Kingdoms and Crabada can take advantage of the near-infinite scalability and flexible architecture of Subnets. This provides a better user experience through faster transaction speeds and lower latency.
• Real-World Assets: With built-in KYC functionality, Subnets can facilitate the tokenization of real-world assets such as treasuries and real estate. This enables regulated financial service providers to operate within the secure environment of a Subnet.
• Voting Systems: Subnets can be used to create secure and transparent voting mechanisms. They could be public for general elections or permissioned for corporate governance, delivering immediate, immutable results.
• Supply Chain Management: The transparency and security features of a Subnet can be harnessed for supply chain management, ensuring that each step of the production and distribution process is verifiable and tamper-proof.

Each of these use cases demonstrates how the flexibility and utility of Avalanche's Subnet technology can meet the diverse needs of various industries.

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Bottom Line

In closing, Avalanche's Subnets mark a pivotal turn in modular blockchain innovation, streamlining scalability and security with over 107 active networks. This ecosystem thrives on a robust community of validators, broadening the horizon for applications from DeFi to gaming and more. Emblematic of Avalanche's pioneering approach, Subnets cater to a spectrum of industry needs, pushing blockchain technology forward. As Avalanche grows, its Subnets are at the forefront, driving the platform towards a more flexible, efficient blockchain future.