Avalanche Subnets Explained

Summary: Avalanche Subnets are customizable mini-networks within the Avalanche ecosystem, offering a unique blend of scalability, security, and decentralization. With Subnets, you can tailor your blockchain network to fit specific needs, from DeFi and gaming to supply chain management. With 84 Subnets already active, Avalanche is becoming a key player in the future of modular blockchain scaling.

What is an Avalanche Subnet?

An Avalanche Subnet is essentially a smaller, self-governing network within the larger Avalanche ecosystem. It consists of a group of validators that work together to reach consensus on transactions for one or more blockchains. This setup allows each Subnet to have its own rules, including membership criteria, fee structures, and even its native tokens.

The beauty of Subnets lies in their flexibility and independence. They can be customized to meet specific application requirements or comply with certain regulations. For instance, a Subnet can be designed to only allow validators from a particular country or those who meet certain hardware performance benchmarks. This degree of customization makes Subnets a powerful tool for solving the blockchain trilemma, achieving a balance of scalability, security, and decentralization.

‍

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.

‍

How Many Subnets are there?

As of the latest data, the Avalanche network comprises 84 Subnets. These are validated by a total of 1,478 validators who have staked an impressive 250,547,682 AVAX. All of these validators are also part of Avalanche's Primary Network, which includes the X, P, and C blockchains.

In terms of performance metrics, these Subnets have processed a total of 997,066,171 transactions, with a rate of 11.62 transactions per second. The network also has 78,243 daily active addresses and a total of 418,759 smart contracts have been deployed. This information can offer a snapshot of the Avalanche network's size, capability, and activity.

‍

Examples of Avalanche Subnets

The DeFi Kingdoms blockchain, or DFK Chain, is a standout example of an Avalanche Subnet. Built in partnership with Avalanche, it powers the DeFi Kingdoms: Crystalvale expansion and uses its native JEWEL token for gas fees. This offers users a simplified and cost-effective transaction experience.

DFK Chain also employs a unique gas fee distribution model: 25% goes to validator wallets, 50% is burned to increase JEWEL's value, and 25% is set aside for community rewards. With a total value locked of $3.97 million, DFK Chain exemplifies how Avalanche Subnets can be tailored for specific use-cases while enhancing token utility and network stability.

‍

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.

‍

Bottom Line

In summary, Avalanche Subnets are a game-changer in the blockchain landscape, offering unparalleled customization, scalability, and security. From hosting specialized financial applications to enabling transparent supply chain management, the technology's flexible architecture can be tailored to meet industry-specific needs. 

Whether you're looking to launch a DeFi platform or seeking faster transaction speeds for on-chain gaming, setting up a Subnet could be your pathway to achieving these goals effectively. With 84 active Subnets and growing the Avalanche network is poised to be a cornerstone in the future of modular scaling.