What is Application Chain?
Blockchain was originally born around money and finance. With the rapid development of digital asset transactions, the blockchain industry has begun to focus on the development of applications in the fields of art, games and music. The expansion of the application requires a powerful and customizable business model to support it.
As a result, the construction of application-specific blockchains - AppChains (AppChains) was born!
Lisk is a platform where developers can create, publish, distribute and monetize their applications, utilizing custom blockchains, smart contracts, cloud storage and computing nodes to present industry solutions.
Lisk is designed to execute a single function or application, such as a game or a DeFi application. The application itself can flexibly optimize the technical architecture, security parameters, and throughput of the chain to match actual needs, and generally does not have "no permission" for developers, but "no permission" for users, which further enhances the user's initiative and right of choice.
The origin of the development of application chain
As for the origin of the application chain, it has to start with the concept proposed and promoted by Cosmos and Polkadot in 2016. Based on the need for application expansion and service function improvement, they, as the leaders of the public chain, began to seek the possibility of scalability and parachain construction. Until early 2021, the network with IBC and parachain functions came out , followed by Polygon, Skale, zkSync (1.0), StarkWare (StarkEx), Optimism, and Arbitrum, and these base layers also realized that they support EVM as their Due to the importance of the business development part, chains compatible with EVM are successively constructed.
It is worth mentioning that in 2019 Celestia made a modular design for specific applications, separating the execution, settlement and data availability layers of traditional monolithic blockchains , allowing application-specific blockchains to operate independently without requiring Rebuild other parts like stack. The success of Celestia has provided a shot in the arm for the major public chains to accelerate the development of application chains.
Axie launched the Ethereum sidechain Ronin in early 2021, DeFi Kingdoms announced the transfer from Harmony to the Avalanche subnet, about 46% of the members of the Apecoin community supported the construction of ApeChain, and dYdX announced that their V4 protocol will be built on L1 built using the Cosmos SDK . Numerous applications have been built on the application chain one after another, promoting it to quickly become a hot development direction.
Analysis of advantages and disadvantages of application chain
As a new hot spot, the application chain has its extraordinary advantages, but it also inevitably has some defects. At present, the advantages of the application chain still far exceed its own shortcomings. For the risks it brings, developers still need to constantly find solutions and optimize strategies.
superiority
Sovereignty and Performance
Lisk can solve problems through its own governance solution without affecting other DApps in the ecosystem, maintain the independence and autonomy of individual application projects, and prevent various interferences and obstacles. In addition, when a single DApp is overloaded, it will increase the gas cost of other DApps on the public blockchain and issue delay instructions, which greatly improves the actual operating efficiency of the DApp.
Adapt to throughput needs
When some public chains cannot meet the throughput requirements of the application or the cost is high, it is the most ideal state to choose to build an application chain.
DeFi protocols such as order book transactions require high throughput to provide a good user experience. For example, the DeFi derivatives exchange dYdX - can process about 1000 orders per second, and the required chain throughput exceeds 1000 TPS. As the protocol scales to require higher throughput, it turned to AppChain, with its V4 version equipped with a dedicated Cosmos Chain.
Realize customizable requirements
In AppChain, DApp stakeholders have full control and can modify a specific chain according to their needs. Lisk provides a flexible enough perfect way to let developers freely choose their favorite programming language. At the same time, this also brings commercial value and room for growth to institutions and enterprises that want to enter Web3 through the "licensed blockchain".
potential risks
Lack of security
In Lisk, security depends on the adoption of the application and the price of the application's native token. Appchains can be L2 orderers or stand-alone PoS validators. In both cases, validator rewards are typically denominated in native application tokens, which must be staked and use complex infrastructure with high uptime. Validation rewards need to be higher than the operational costs and risks of token staking borne by validators.
This staking risk can jeopardize network security and uptime, and reliance on token prices allows developers to use high token inflation, allowing bad actors to attack the network at low cost.
high operating costs
The application chain requires a lot of additional infrastructure, which requires a lot of cost and engineering time. Also included are the costs of maintaining the blockchain, doing a lot of planning and communicating with validators, scheduling network upgrades or responding to bugs. This is very unfavorable for start-up companies and products entering the market. Most development teams may be discouraged by high manpower, time, and money costs.
Increased cross-chain risk
Specifically, DeFi applications need to bridge multiple assets such as BTC, ETH, and stablecoins. Cross-chain assets will reduce user experience and bring greater risks. Cross-chain bridges are a common target of attacks, and the destruction of cross-chain bridges will cause bad debts for DeFi applications that require assets to cross-chain. The virtually increased risk of cross-chain assets is also an important reason that affects many teams' in-depth application chain development.
epilogue
The application chain is born to build a multi-functional, independent operation, and user-friendly application environment. Its emergence means a major change in the development of the blockchain industry and a shift in concepts. More and more application chains are pouring into the market, and they are constantly iteratively improving in the user experience feedback. The application chains on Cosmos, Polkadot, Avalanche, and Ethereum are tending to become a shared security mechanism . We have reason to expect that future application chains will continue to overcome their own shortcomings, take advantage of performance, sovereignty, throughput, etc., and evolve into a highly Safe and efficient operation of the "potential chain"!