In the decentralized infrastructure space, there is an ongoing struggle to manage a ‘Goldilocks’ type balance sheet: secure but flexible, adaptable but fast and cheap… essentially controlling all the exciting elements, while someone else handles the boring (but critical ) can handle documents . What we discovered is that when creating a dApp environment, many of these elements are interrelated, and when we pull one lever it can affect another in ways we don’t want. In the original dApps, the infrastructure was not well suited for an application that needed to be fast, communicate important information, or share liquidity with other applications in the chain.
The structures that allow us to make full use of dApps have evolved over time, with strong innovations taking the spotlight as they champion the best dApp ecosystem. The strongest contenders for this structure are Layer2, which can host a number of dApps with high efficiency and can be rolled up into a Layer1 chain; or an Appchain, which acts as a dedicated chain for one or more dApps that have similar needs, tailored to optimize performance. Each has advantages, but due to the correlated levers mentioned above, there are also disadvantages.
Although Layer2 has some advantages overall, the Appchain seems to be the better choice as an ecosystem for dApps. However, blockchain infrastructure company Upstairs has developed yet another option that claims to outperform the AppChain while minimizing its limitations. These constructs, called “Supra Containers”, are located in a Layer1 and are designed to create an adaptable environment while still connecting the necessary elements of the L1 infrastructure. Which structure is better for dApps? Let’s dive in and find out.
AppChains: purpose-built blockchains
An AppChain, or application-specific blockchain, is a complete blockchain, but tailored to the specific needs of the dApp or dApp ecosystem that carries it. This allows it to maintain the efficiency needed for key infrastructure requirements such as performance, security and even governance. Since it is essentially a custom blockchain, it obviously has a sky-is-the-limit approach to what you can customize to meet your needs. The main selling points of building an AppChain are customization and independence.
Due to the flexibility of the options, AppChains can take many different forms. Some chains are designed for a single, comprehensive dApp, while others are built for a series of dApps that work together as an ecosystem, each taking advantage of the chain’s specific design tweaks in terms of speed, cost, and type of tokenization and management that has been established. Other AppChains are not designed as decentralized, public-facing organizations, but rather as corporate structures used by companies for efficient and secure information sharing platforms. The blockchain attributes are used for immutability, proof of transfer, and to put data on-chain for others to see. This is a very different structure within the AppChain compared to a public AppChain built for a dApp ecosystem, but the basic building blocks of the AppChain are the same. This speaks of its extreme flexibility.
The downside is that flexibility is not free. In fact, it’s far from cheap. Building a custom blockchain is as involved and complex as it sounds, and involves a significant amount of development. You can choose all the options, yes, but you also have to build them. For those with the resources to do this and the need for strict standards, this is perfect, but it can be burdensome for development teams with limited resources and limited skills. Poor development of security measures, smart contracts and tokenomics can create dangerous vulnerabilities in the chain, so additional resources should be spent at the very least on comprehensive audits, and more likely on bringing in specialists where the team has knowledge gaps.
Supra Containers: A level 1 mini-verse
The Supra Container is an interesting evolution that seems to have taken aspects of the Layer2 rollups, the AppChain, and put them together in a way that protects against the biggest complaints of each. In Layer2 solutions, significant benefits can be achieved through the use of Layer1 security, tokenization, consensus, etc. This could potentially allow a development team to focus their efforts on the value-added pieces they want to build. However, the problem is composability and fragmented liquidity, where the Layer2 solution loses the ability to reach the main chain for liquidity, but must provide its own liquidity. This can mean the death of a growing ecosystem and is difficult even for much larger platforms. Although the AppChain handles some of this, the costs for maintenance and infrastructure development are quite high.
Here is the Supra Container, in an interesting spot between the two. The container itself is an isolated construction on the Supra Layer1. This allows it to share liquidity across the larger mainnet and also reach other chains via VMs. However, because it is isolated, it does not need to be connected to the Layer1 infrastructure; it can adapt its computing space and governance and develop its own tokenomics. At the same time, the container doesn’t have to build the rest of the infrastructure from scratch because it has access to the Layer1 oracle, bridge, security, verifiable randomness, and other cross-chain operations. dApps can build within a container, but can also create entire dApp ecosystems within a single container, building a specialized area of the larger Web3 industry.
Conclusion: who wins?
So based on that, who’s the winner here? At first glance, the Supra Containers have a lot going for them, and that’s by design. They have the advantage of learning from AppChains and Layer2s, developing the best of both where possible. This will meet the needs of many development teams, especially those that are small to medium sized or want to focus solely on building their core value-added features. That said, AddChains are not completely obsolete. In those cases where you need complete customization for your solution – and have the resources to realize this – you can perfectly tailor the solution with an AppChain. Either way, dApp scaling is becoming increasingly feasible for development teams of all sizes and skill levels as new solutions evolve, expanding Web3 to a broader audience.
