Avalanche was one of the breakout platforms of the last bull run. However, despite the current state of the market, Avalanche is still a project with huge potential. Avalanche is an open-source platform for enterprise blockchain deployments and building decentralized apps in a single, highly scalable, and interoperable ecosystem.
Blockchains like Avalanche uses a unique approach to consensus to achieve speed, security, and high-throughput. It gets all this done without sacrificing decentralization. So, the existence of three distinct chains, the c-chain, the x-chain, and the p-chain, was a source of headache for new users.
For example, when withdrawing AVAX on Binance, users can choose “Avalanche” or “AVAX C-Chain.” However, some do not know what these terms mean or which one should be chosen. And understanding the difference between the three chains is super important. Why? because sending funds to the wrong chain could lead to losses. Now, let’s look at them and know their differences.
What is C-Chain (Contract Chain) ?
The C-Chain works if you want to use any DeFi dApp (decentralized application) on Avalanche. The C stands for contract. This chain is called the contract chain because that’s the one that is used for smart contracts. The core difference between this and other chains is that it can be added to MetaMask and uses an address in the Ethereum format with a 0x at the beginning. So, it’s best you add the c-chain to MetaMask if you plan to use them.
You can see this spectacular growth of #Avalanche C- Chain Addresses in this 📈
📅Thursday, May 26,2022
🔥Total active Address: 2,917,322
🚀With daily Increase 4.8k pic.twitter.com/hPnSUs2JJs
— Kuen Sh∀hi 🔺 (@KuenShahi) May 27, 2022
What is X-Chain (Exchange Chain)?
The main distinction between the x-chain and the c-chain is that the x-chain is incompatible with DeFi and cannot be used with MetaMask or other similar wallets. You access the x-chain address from the Avalanche wallet. And you receive a new address after making a deposit. However, your old address remains valid. The format for the x-chain differs from that of the Ethereum-styled 0x address.
4-What is X-Chain?
Let’s start with X-chain. X stands for exchange. This Chain manages assets and it is responsible for Selling and Buying.
It uses Avalanche Consensus.
What is Avalanche Consensus? pic.twitter.com/H1UZoTTHp3
— Ruesandora (@ruesinfo) April 2, 2022
The x-chain is basically used to receive and send funds. The benefit of this strategy is that the x-chain can be customized specifically for transfers rather than attempting to serve everyone’s needs. Naturally, sending money on the more flexible c-chain is also an option. But on the c-chain, gas costs can increase by several dollars when the network is busy. However, the x-chain is different. The transaction fee is set at 0.001 AVAX. The x-chain is also faster since it is more simplified.
What is P-Chain (Platform Chain)?
The p-chain is the last chain that Avalanche provides. The p here stands for platform. This chain is concerned with staking AVAX. Validators and those delegating will receive their AVAX incentives on this chain. So, those who are not interested in staking do not have to concern themselves with this chain. Interestingly, this chain can also receive transfers from the other two Avalanche chains.
3/ So, what is Avalanche? Avalanche architecture comprised three chains which customized for a specific purpose
— TK Ventures (@tkdotventures) August 31, 2021
So, let’s end the longtime confusion. The c-chain is for DeFi, the x-chain is for transfers, and the p-chain is for staking. Now, let’s talk about subnets.
What are Subnets?
Avalanche is mostly known as an EVM-compatible blockchain that’s high in demand. However, this network has more to offer, including many more blockchains. One of Avalanche’s key features is the capacity to build Subnets, which are highly scalable and customizable blockchains.
Here’s the thing: fees have increased on the C-Chain due to a shortage of blockspace and escalating demand. While upgrades can be made, expanding to meet demand necessitates either more blockspace or more effective use of already available blockspace. This means off-chain computation via Layer. So, Avalanche’s answer to this issue is subnets.
Subnets enable developers to build their own blockchains, generating more blockspace and processing power to satisfy demand instead of requiring all transactions to occur on a single, shared state.
“Avalanche Subnets enable us to create an ideal environment for institutions to migrate on-chain and experience the power of DeFi protocols first-hand as users rather than just as investors.” – @StaniKulechov 👻 https://t.co/5hJCEA4UuU
— Aave (@AaveAave) March 8, 2022
Why are Subnets Important?
Subnets, or subnetworks, refer to a flexible subset of Avalanche validators that achieve consensus on their own blockchains. We can also say that subnets are ‘Blockchain-as-a-Service’ secured by some Avalanche validators.
We can also say that a subnet is a network that has its own set of rules for membership and token economy. One subnet alone can validate any number of blockchains, one blockchain at a time. Therefore, a validator can belong to numerous subnets. All subnet validators must, by definition, also verify the Avalanche Primary Network.
Also, subnets do not share the execution thread, storage1, or networking with other subnets, including the primary network. This allows the network to scale and enables higher transactions per second (TPS), lower latency, and lower transaction fees.
In conclusion, with subnets, all transactions do not have to take place in a single shared state. This way, Avalanche operates faster. subnets also bring more scaling solutions and trigger competition. Most importantly, subnets will bring more developers to Avalanche.
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