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

They are a versatile and scalable framework for building blockchain networks. They run in parallel with the main Avalanche network.
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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.
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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.
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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.
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• 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.
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Subnets characteristics:
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• 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.
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Cosmos Appchains

They are app-scpecific blockchains that offer the following features to Web3 protocols:
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Cosmos supports the integration of many modules and protocols that help with:

• Data availability
• Governance
• NFT support
• Security
• Interchain operability
• Wallets
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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.
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How are Appchains created?
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• 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:
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a. They are programmed with the Go programming language which requires the computer to run it.
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b. The developer sets up a directory for the appchain and downloads the latest version of the Cosmos SDK to create a new repository.
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c. The appchain then can be developed using tools and resources and modules Cosmos offers (highly-technical process).
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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.
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Comparison

Under which circumstances are Polkadot Parachains superior?

• Easy integration and development.
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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).
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Under which circumstances are Avalanche Subnets superior?
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• 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.
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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.

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