Why Developers are Building on Avalanche.
Too Much Informationā¦
I like to take bathsā¦ I know itās weird but Iāve often found that sometimes my most timely and intuitive thoughts come in these moments of pure peace, relaxation, and quiet. Today was one of those days. Given my role at Ava Labs, I speak with hundreds, if not thousands of VCs, builders, community members, bystanders, ect about Avalanche and āwhat sets it apartā, āwhy is it differentā and many other very valid questions. I am getting better at answering these questions but usually, it ends up coming down to something likeā¦ āI donāt think you can afford not to build on Avalanche.ā My hope is this piece can scale some of those thoughtsā¦
Subnets, innit?Ā
Avalanche is a network that can be comprised of many subnetworks, or āsubnetsā. A subnet is any variety (in number or mix) of validators who are already validating the Primary Network (C, P & X Chains) that come together to validate a new network of chain(s). (FWIW, a subnet can comprise of many chains).
For the purpose of this piece, we will refer to the example subnet as Pikachu Subnet (pika pika!) The Pikachu Subnet is a game where you train your Pikachu NFT and it grows, levels up, and ultimately allows you to battle other players live (ala Warcraft Frozen Throne). The more you play and win, the more reward tokens you earn, either in the form of stables, AVAX, BTC, native token, ect. Now, letās presume that Pikachu subnet gets 10% of Pokemonā users (TAM that shit) or approximately 10 million people to play this game. For reasons that I hope I do not need to go through, this game would not be ideal to deploy on Ethereum, Polygon, Avalanche C-Chain, or whatever linear chain your heart desires (you too Solana). To do so would be a bad idea because the Pikachu players donāt want to be interrupted with higher fees or slower confirmation times because Taylor Swift is dropping her new NFTs (All too Well, innit). Therefore, the Pikachu Subnet is created for isolated performance.Ā
Economics & Token Opportunities
The developers behind Pikachu Subnet ultimately have many options in the subnet playground. They can choose to have USDC gas token with PIKA staking token or PIKA gas and staking tokenā¦ can get nuts and have the USDC fees buy PIKA and distribute that to PIKA stakers. The point is that you have many economic choices with subnets. If Pikachu Subnet were an āElastic Subnetā, you would be able to have as many validators as you would like who buy the staking token and stake it to earn rewards in the form of fees and inflation, similar to AVAX or ETH validators todayā¦ basically, you have your own blockchain where value accrues to you and your tokens.Ā
One Network, interconnected - WARP
Avalanche Warp Messaging (AWM) is the way subnets talk to each other, the way tokens get sent amongst subnets, ect (think IBC but some major differences). Why does Pikachu Subnet care about AWM? Wellā¦ to put it simply, there were many integrations, DeFi dApps, etc available for example on the Avalanche C-Chain that Pikachu Subnet users might want to take advantage of.Ā
A fewā¦
Perhaps they want to leverage Chainlink feeds on their subnet without working on getting a full integration - they can do it.Ā
Maybe they donāt want to deploy their own version of Liquidity Book, Uniswap V3, or {insert any DEX} on their subnet and would rather let their 10 million users take advantage of the liquidity already present in those other chains - they can do it.
They may want to have on and off-ramps to centralized exchanges that are available on the C Chain that would be very costly to obtain on their own subnet - they can do it.
Pikachu Subnet may want to collaborate with Goku Subnet (Yes..) and do a promotional battle whereby both try to grow their userbases and offer the ability to move their NFTs across each otherās networks to learn and try each otherās game, they can do it.
XBOX may want to airdrop Pikachu players new rewards to come try its new āHalo Subnetā and can easily offer incentives to cross-pollinate those ecosystems, they can do it.
And so onā¦ my kids are starting to yell at me so have to wrap this up shortlyā¦
The Avalanche Opportunity is Unique.
If you are a DeFi developer and you are focused on the same 17 users (of which I am 5 of them) you are very much missing the forest for the trees. DeFi will ultimately become the top-of-the-funnel for all other crypto/web3 use cases. If you have the best DEX and it is not capturing the volume of Pikachu Subnet, Goku Subnet, Halo Subnet, KYC Institutional DeFi Subnet, Boknet, United MileagePlus Subnet, New York Jets Subnet, and so on, you are ngmi. This ultimately leads to the whole point of this rambling threadā¦ Avalanche Warp Messaging connects subnets to each other and to the liquidity hub without introducing new trust assumptions - if you didnāt develop, build relationships & BD on Avalancheā¦ you are not getting this flow.
DeFi builders, NFT artists, marketplaces, ect - if you want your products, art, and applications exposed to where all the users will be, you too will build on Avalanche.
Disclaimer: All subnets mentioned here that would otherwise lead to anybody speculating on future deals are completely hypothetical to simply make a point. All of these are my personal views and not the views of my employer.