Home Blockchain Are application-specific chains the future of blockchain? – The new battery

Are application-specific chains the future of blockchain? – The new battery

Are application-specific chains the future of blockchain?  – The new battery

As developers of decentralized applications (dApps) gain more experience with blockchains, some are running into limitations created by the parameters of the blockchain architecture. Ethereum, for example, allows applications to be created via smart contracts, but does not allow automatic execution of code. It also maintains fairly tight control over how consensus and networking functions are exposed to these apps. To overcome these limitations, some developers are turning to application-specific blockchains – specially designed and tailored to the specific needs of their applications, and colloquially referred to as “appchains”.

One of the most popular options for creating application chains is the Cosmos SDK, due to built-in composability, interconnected blockchains, and the ability for developers to retain sovereignty over their blockchain. We’ve covered Cosmos in the past, including a developer academy to learn how to build in the Cosmos network and adding Cross-chain securitywhich allows multiple Cosmos blockchains to align around common security protocols while preserving sovereignty.

Cosmos SDK and application modularity

In an interview with The New Stack, Sunny Aggarwalco-founder of Osmosis, said, “The Cosmos SDK makes it easy to build your custom blockchain and modify the core code. We can modify core elements of the blockchain to create new features or create new user experiences that other DEXs don’t have; for example, most blockchains require you to use a native token for fees, which always seemed like a really bad UX. So what we did with our chain, to get mass adoption, we realized that we needed to allow users to pay transaction fees with any token they wanted.

This notion of creating payment flexibility might seem as simple as allowing users to pay in both Euros and US Dollars, but it’s much more complicated with blockchain implementations like Ethereum, where blockchain has no no direct knowledge of other channels. Since the Cosmos ecosystem is designed for Cosmos blockchains to be aware of each other, it becomes easier to customize features such as payment, while maintaining awareness of other Cosmos-enabled blockchains.

One of the benefits of Cosmos for building appchains is the modular nature of the Cosmos SDK. Aggarwal said, “There is a core set of modules that all Cosmos-based blockchains reuse, although people modify them. For example, we changed the staking module, but we try to keep it in line with the upstream module. The real power of the modular approach is being able to adopt modules written by other developers to extend beyond the main SDK. “Developers write additional modules and other application chains can copy those modules and turn them into a replica,” Aggarwal said. “For example, we’ve written on-chain timer modules that allow for self-executing code and a number of chains have created this module.”

CosmWasm: the cosmos way to use WebAssembly

One of the strengths of Cosmos blockchains is the smart contract module CosmWasm, which allows developers to write cross-chain smart contracts. It is primarily tailored to your specific applications using Rust and is further customizable in combination with the Cosmos SDK. “CosmWasm is the Cosmos smart contract system which is built as a module of the SDK,” Aggarwal said. “It’s become kind of a secondary standard for how to build stuff in Cosmos. More application code development is going to move to CosmWasm and treat the Cosmos SDK almost like you would kernel code. that you only change when there is no other option.

CosmWasm is also attracting interest from parties looking to adapt it to other blockchains, due to its flexibility. Composable has already implemented CosmWasm in the Substrate and DotSama blockchains, which allows them to make cross-chain smart contracts in combination with the composable cross-chain virtual machine.

Economics of Decentralized Application Development

According to Aggarwal, a particular argument in favor of appchains is the elimination of maximum extractable value (VME). In blockchains in general, there is a strong incentive to identify the most valuable transactions and submit them before other transactions at a higher price, in part because that is how consensus solutions are compensated. “More and more app developers are going to realize that having their own app chain makes sense,” Aggarwal said. “The value of layer 1 blockchains is the MEV you can capture. App developers will start to wonder why they are leaking value to the L1, when they can instead capture that value in their own chain and distribute it as revenue to token holders.

In July, HOPR highlighted some potential risks with the upcoming Ethereum merger and how it could create new incentives to attack validator vulnerabilities (see Twitter thread below). Running your own blockchain removes this kind of problem from the underlying infrastructure that your application relies on.

Another way to look at the economics of running your own blockchain is the potential for cost reduction, similar to how traditional application models value in-house feature development instead of paying for software calls. ‘API to third parties. An application-specific blockchain also eliminates competition for resources from all other users on the chain, which means that all transactions on the chain are directly associated with the activity of users of the application. In theory, this translates into better application performance, which in turn translates into a better user experience.

In the longer term, we may see more commoditization of blockchains themselves, with more focus on applications and how those applications meet user needs. Aggarwal put it this way, “My thesis is that L1s become commoditized over time, and what’s valuable are the apps, because it’s the apps that have relationships with the users. If you look at the early days of the internet, the way to bet on the rise of the internet was not to bet on the rise of AOL and Compuserve, it was to bet on Amazon and Google, which were the first applications of “Internet Ethereum applications will slowly start to realize this.

Characteristic picture via Shutterstock.


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