Parachains (Polkadot) vs Subnets (Avalanche) vs Appchains (Cosmos)

Polkadot’s Parachains

They’re app-specific blockchains that operate in parallel to Polkadot’s Relay Chain.

• The Relay Chain is responsible for the network’s security, consensus, and interoperability. All validators on Polkadot are staked on the Relay Chain

• The Relay Chain’s functionality is limited:

• Smart contracts are not supported.

•  The main function is to coordinate the whole system and support transactions (which include: governance, parachain auctions, and participating in NPoS).

How they’re created

• To create a parachain, the interested party must obtain a slot in the Relay Chain through Auctions.

a. Auctions are Polkadot’s mechanism to raise the bar for blockchain projects, incentivizing them to demonstrate their technology and gain community support prior to launch.

•  In auctions, users must bid by using DOT.

•  Once the auction is completed, DOT must be locked for the duration of the lease.

a. Slots can be used for up to 96 weeks at a time, with option to renew. The duration is set in increments of 12 weeks.
b. After the lease, the bonded DOT is unlocked.

• Once operational, parachains must only run a few collator nodes to keep the main chain’s validators updated about the parachain’s state transitions.

• Polkadot introduces Crowdloans for projects that need community support.

• Through crowdloans, parachain teams can ask the community to fund their slot lease bid.

•  Potential rewards are completely up to the team’s decision.

• The Polkadot community can support parachain projects. Here’s a tutorial.

Parachain Characteristics

• Performance: They inherit the security of the Relay Chain, meaning they don't need to establish their own security mechanism. However, they retain autonomy regarding their governance, economics, and technological choices.

•  Scalability: They can run without causing more workload in the main chain as their transactions are performed independently.

•  Interoperability: parachains can communicate with each other and transfer data.

•  Flexibility: as they’re fully customizable, they can be used for DeFi, smart contracts, GameFi, etc.

•  Governance: they participate in Polkadot’s governance, but can also have their own governance.

•  Seems like each parachain supports up to 1,500 tps per parachain.

Avalanche Subnets

They are a versatile and scalable framework for building blockchain networks. They run in parallel with the main Avalanche network.

Avalanche Consensus

Avalanche is composed of dynamic sets of validators agreeing on the state of the blockchain. Each subnet is assigned a specific set of validators to run it.

Avalanche has subsampled voting which instead of requiring all nodes to agree on the network’s state, a small and randomly-selected group of nodes to make decisions. Information about the state of the blockchain is spreaded like gossip.

Avalanche Nodes

Any node that stakes the native token (AVAX) can become a validator, contributing to the network's security by participating in consensus. Avalanche organizes its network into multiple subnets, each responsible for achieving consensus on one or more blockchains.

• Validators can choose which subnets they wish to join, based on their interests, expertise, or economic incentives, making each subnet's set of validators dynamic and adaptable.

• Validators can also choose to leave the subnet over time, depending on economic or workload factors.

Avalanche can grow horizontally thanks to subnets as instead of increasing throughput on a single chain, they can distribute transactions through subnets, increasing the overall network’s capacity.

Subnets characteristics:

• Supported 4,500 tps per subnet

• They state higher tps can be achieved as the number of validators per subnet can be increased.

• Subnets can be public or private and support the creation of both permissionless and permissioned blockchains.

• They can have their own validators, governance rules, and token economics.

Cosmos Appchains

They are app-scpecific blockchains that offer the following features to Web3 protocols:

Cosmos supports the integration of many modules and protocols that help with:

• Data availability

• Governance

• NFT support

•  Security

• Interchain operability

•  Wallets

IBC

Cosmos’ Inter-Blockchain Communication (IBC) protocol was designed to handle authentication and transport of data between blockchains. IBC allows chains to trustlessly communicate with each other to exchange data, messages, and tokens.

• It is one of the main advantages of building an appchain on Cosmos, as the dApp would be natively interoperable with other blockchains.

How are Appchains created?

• They are built using the Cosmos SDK.

• The SDK is open source and simplifies the development of custom blockchains.

• It provides all needed tools and resources like modules, directories, libraries, source code, and documentation.

• The general creation process goes as follows:

a. They are programmed with the Go programming language which requires the computer to run it. 

b. The developer sets up a directory for the appchain and downloads the latest version of the Cosmos SDK to create a new repository.

c. The appchain then can be developed using tools and resources and modules Cosmos offers (highly-technical process).

d. Once ready, appchains can be tested using the Ignite CLI to ensure it’s functional. The same Ignite CLI helps with launching the appchain.

Comparison

Under which circumstances are Polkadot Parachains superior?

• Easy integration and development.

Disadvantages:

• Projects must hold big amounts of capital in the auction to get a slot, if they get outbid, they would lose the spot.

• Limited cross-chain compatibility.

• A key difference from Avalanche subnets is that Polkadot uses a NPoS consensus mechanism while Avalanche uses a DAG (Directed Acyclic Graph).

Under which circumstances are Avalanche Subnets superior?

• Seem to be a middle ground between parachains and appchains, acting as a separate blockchain where the project can choose to connect to either the X-Chain, C-Chain, and connect them to other subnets as well as the main chain.

• Advantage over Polkadot: subnets can use their own consensus and governance models while Polkadot parachains are “stuck” with Polkadot’s consensus and governance models. And projects don’t need to compete for a “spot”.

• Seems to have the best performance from the bunch, supporting up to 4,500 tps per subnet.

Under which circumstances are Cosmos L1s superior?

• Seems like it is best suited for cross-chain interoperability.

• The downside is, it requires the highest degree of development from all options in the report.