A subnetwork (or subnet for short) is a network within a larger network. A subnet is a logical division of a network into multiple smaller network segments. Its purpose is to make the primary network more efficient or create your own blockchain. Subnets allow data to reach its final destination over a shorter distance, which helps with scaling in the cryptocurrency world.
Organizations use subnets to divide large networks into smaller ones. Dividing a large network into smaller interconnected networks minimizes traffic and speeds up the network. You can also create your own sovereign subnet with its own rules.
As an example, let’s examine the operation of subnets on the Avalanche blockchain.
Subnets are a scaling solution for the Avalanche blockchain. Subnets on Avalanche allow projects to deposit AVAX to create their own L1 or L2 blockchains with their own rules for tokenomics, membership, etc. Subnets on Avalanche consist of a dynamic subset of validators who secure them and work together to build consensus. Each created blockchain is validated by a single subnet, but a single subnet can have multiple blockchains.
Subnets are independent: they specify their own execution logic, determine their own fee regime, maintain their own state, facilitate their own networking, and provide their own security. They do not share execution thread, storage, or networking with other subnets including the Primary Network, effectively allowing the network to scale up easily while enabling lower latency, higher transactions per second (TPS), and lower transaction costs provided by the Avalanche Consensus.
Avalanche also supports private blockchains, which can be created through a subnet. You can create a subnet that only certain predefined validators may join and create a private subnet where the contents of the blockchains will only be visible to those validators. This is an ideal solution for organizations interested in keeping their information private.
- Subnets improve overall network security
- They help reduce the primary network load
- Subnets can be customized according to the preferences of particular subnet developers, regardless of whether this concerns tokenomics, economics, or the subnet validators properties
- They increase the overall network speed by allowing data to reach its final destination over a shorter distance
- They are a scaling solution
- An option to create a private subnet for predefined validators only
- Possibility of hacker attack
Tips from an analyst
What are subnets used for?
- Improving network security - creating subnets makes it more difficult for attackers to move around the network, thus increasing the security of the network as a whole
- Reducing the network load - if a lot of traffic is shared and located on a single network, it will very likely affect the speed of the overall traffic
- Creating private subnets - content will only be visible to selected individuals
- Network redistribution