Table of Contents

1. Intro

2. Avalanche’s Vision

3. Subnets: The Key to Achieving Avalanche’s Vision

3-1. Subnets Isolate Network Failures and Monopolize Resources

3-2. Unleashing Infinite Scalability with Avalanche’s Dynamic Subnet Creation

3-3. High Flexibility That Satisfies Various Subnet Operators’ Needs

3-4. Native Communication Protocol: Connecting Disconnected Ecosystem

4. Time to Scale the Subnet Ecosystem

 

 

1. Intro

"Our goal is to digitize all the world's assets on blockchain. To that end, we design the entire system to have the scale and the structure necessary for digitizing all things." - Emin Gün Sirer, founder of Avalanche

Avalanche is a platform with the ambitious goal of digitizing all of the world's assets on blockchain. To achieve this, Avalanche has introduced the Snowman consensus algorithm, which offers fast finality and horizontally scalable subnets. In this article, we will delve into the technical characteristics of the subnet and assess the feasibility of realizing Avalanche's vision. Additionally, in the next installment, we will examine the current state of the subnet ecosystem, with a focus on on-chain data.

 

2. Avalanche’s Vision

Avalanche has a bold vision of digitizing (tokenizing) all assets using blockchain technology. The platform aims to bridge the investment opportunity gap by providing public access to assets that were previously limited to a small number of market participants. This will enable individuals to discover new investment opportunities while adding liquidity to the market, providing asset owners with the opportunity for proper price discovery, and giving asset markets a more efficient structure.

To achieve this ambitious goal, Avalanche requires a structure capable of accommodating a wide range of assets and processing a large number of transactions. To address this challenge, Avalanche introduces the concept of subnets. These subnets are infinitely scalable and able to distribute transactions, enabling the platform to handle the high throughput required to tokenize all assets. We will explore the specific characteristics of subnets that make this possible later in the article.

 

3. Subnets: The Key to Achieving Avalanche’s Vision

Contrary to popular belief, a subnet on Avalanche is not an app-specific blockchain. Instead, it is a group of validators working together to achieve consensus on the state of the blockchain. Every Avalanche validator is a member of the primary network, which is a higher-level concept of subnet. The Primary Network is responsible for validating and securing the Platform Chain (P-Chain), Exchange Chain (X-Chain), and Contract Chain (C-Chain) that comprise the Avalanche platform. In addition to this, validators can form subnets to validate one or more blockchains designed for specific applications, hence the term subnet=appchain.

3-1. Subnets Isolate Network Failures and Monopolize Resources

A subnet is an independent network that operates separately from other subnets including the primary network. It does not share networking, execution, or storage resources, which means subnets can monopolize 100% of network resources, providing a seamless user experience. This is in contrast to the L1 (C-chain) where many dApps compete for limited resources.

For instance, the P2E game Crabada generated a significant number of transactions in the first half of 2022, causing fees to skyrocket on the C Chain. This resulted in non-Crabada users having to pay high transaction fees. However, subnets operate as their own network and are immune to spikes in fees and slowdowns in transaction speeds caused by transactions on the C-chain or other subnets.

Moreover, subnets can isolate network failures. If a network failure occurs in Subnet A, it will have no impact on Subnet B or Subnet C, and even if the primary network fails, subnets will remain unaffected.

This ability to isolate network failures is crucial to the realization of Avalanche's vision. To trade and utilize various assets on Avalanche, it is essential that they are not affected or constrained by the state of other assets.

3-2. Unleashing Infinite Scalability with Avalanche’s Dynamic Subnet Creation

To accommodate a large number of assets on Avalanche, an infinitely scalable structure is required. Avalanche's Subnets can theoretically be created infinitely, and chains within subnets can also be created infinitely. The foundation of this infinite scalability is the Snowman consensus algorithm that all subnets adopt.

• The Snowman consensus algorithm achieves consensus through repeated sub-sampled voting. It randomly selects k (1 < k < n) nodes from a total of n nodes and asks for their opinions. If the same opinion is repeatedly obtained from α (1 < α < k) nodes more than β times (β ≥ 1), the opinion is adopted as their own opinion. The values of k, α, and β can be set arbitrarily, and consensus is achieved by repeating the process. For better understanding, check out a demo of the algorithm at the following link.

The Snowman consensus algorithm achieves fast consensus by only communicating with a subset of k nodes during the consensus process, rather than all nodes. This makes it possible for the consensus algorithm to scale as the number of nodes increases. Additionally, there is no limit to the number of subnets that can be created, since a subnet is a network formed by specific validator(s) rather than all Avalanche validators, and only communicates with those selected validators. Chains within a subnet are also unlimited since the consensus algorithm is separated per chain.

In comparison, Polkadot Parachains, which have similar features to Avalanche Subnets, are limited to 100 slots. When selected as a para-validator to validate a parachain, the computational load increases exponentially with the number of parachains because validators need to validate all parachains and exchange messages with all other validators in the consensus process. As a result, projects need to participate in auctions for limited slots at a high cost. Moreover, since slots are rented for a certain period of time, there are limitations to sustain the ecosystem.