In the cryptocurrency field, you might often be confused by seemingly similar concepts, such as about chains, including different concepts like multichain, crosschain, superchain, etc. Understanding them and the basic differences between them is necessary to gain more knowledge in this area.
Before diving into the various “types” of chains, let’s revisit the three issues of blockchain. This problem is often referred to as the Blockchain Trilemma. The Blockchain Trilemma was first raised by Ethereum co-founder Vitalik Buterin and proposed a trio of main goals existing in any Layer 1 protocol. According to Vitalik and most in the industry, for a cryptocurrency network to be useful, a blockchain needs to meet the following three requirements:
- Decentralization – Instead of being managed and controlled by a single authority or organization, blockchains should distribute network control to participants.
- Security – Security is of utmost importance in blockchain, and each network must be unhackable and prevent malicious actors from taking over the network or altering transactions and history.
- Scalability – Blockchains need to support a large number of transactions and activity volume without increasing time or transaction fees.
Developers face the issue that when building a Layer-1 blockchain, one of the three things often needs to be sacrificed as a trade-off to achieve the other two.
And now, many concepts of new blockchain technologies have emerged, aimed at overcoming these drawbacks. The first is Interoperability, which promotes large-scale, seamless interaction between different blockchains. The second is Scalability, expanding while still retaining the essence of security and decentralization.
The first part talks about interoperability (Interoperability).
Contents
Multi-chain
Multi-chain is a term that means “multiple chains, multiple platforms.” It refers to a project/dApp that can run on several different chains (at least 2). For example, a project that can run simultaneously on blockchains such as Ethereum, Binance Smart Chain, Solana, Polkadot… is called Multichain.
However, Multichain also has its challenges, namely fragmented liquidity. Additionally, each blockchain has its own characteristics, structure, programming language, and support tools. Therefore, when wanting to deploy on a new blockchain, projects will need to research to deploy on new chains because each chain has its own uniqueness. This means it cannot be realized in just one or two days. Besides, the security issue of Multi-chain is still controversial as many Multi-chain projects are currently not secure, safe, or fast enough to meet the decentralized needs of the entire industry.
Read more: Multi-chain is what? Top potential Multichain projects
Cross-Chain
Cross-chain, meaning “cross-chain”, is a solution that allows users to transfer assets from one blockchain to another to optimize the combination between chains. It helps you connect and circulate assets on many different blockchain platforms.
Cross-chain mainly operates on the lock and mint mechanism. This means that when you want to convert content from chain A to chain B, users need to lock their content in a bridge and chain B will mint a “Wrapped” attribute with the same value as the product on the main product chain. When users want to transfer assets back to chain A, the “wrapped” asset on chain B will automatically be burned.
The difference between Multi-chain and Cross-chain is most evident as follows:
- Multi-chain refers to the project operating on many different chains. When project A deploys Multichain, it means that in addition to the original main chain (e.g., Ethereum), project “A” can deploy independently on other chains like BSC or Polkadot.
- But to be able to circulate assets between independent chains, you will need a Cross-chain tool. It is a tool that helps people transfer assets between the Ethereum chain and other chains on the market.
To avoid confusion between Multi-chain and Cross-chain, remember that:
- Multi-chain: like a multinational company with many headquarters located in different countries.
- Cross-chain: like a company transporting goods from one country to another.
Omni-chain
Omni in Latin means “all”. Therefore, omnichain can be understood as a place where all blockchains can communicate with each other. Omnichain is a concept introduced by Layer Zero itself. For easier understanding, it can be considered a major upgrade of cross-chain.
Specifically, as I mentioned above, for ordinary Cross-chain solutions, assets after being transferred from blockchain A to blockchain B will be in the form of wrapped tokens. Because there are so many different Cross-chain solutions, it leads to the situation where although the starting point is 1 token, when it reaches blockchain B, there are too many different wrapped tokens. In addition, each Cross-chain solution operating on the lock, mint & burn mechanism produces a different type of wrapped token, leading to severe liquidity fragmentation.
=> Omnichain is different as it allows you to transfer tokens from chain A and receive tokens from chain B. This does not generate wrapped tokens and also does not cause liquidity fragmentation. This is the breakthrough of Layer Zero and Omnichain.
The second part talks about scalability (Scalability).
App-chain
App-chain, originally “application-specific blockchain”, is a blockchain designed to serve a single application instead of becoming a public platform serving many applications at once like Ethereum, Cardano…
If we talk about its essence, then App-chain is a blockchain tailored for a specific protocol, offering more customized functions than dApps on L1. Therefore, it is a great advantage when a product or application requires unique features and mechanisms to operate optimally.
Example: dYdX, one of the most popular perp dexes today, has successfully applied the Appchain model after encountering initial scalability issues. Or Axie Infinity has also been launched on the Ronin sidechain.
In terms of development framework, both Layer 1 and Layer-2 solutions support App-chain. For example, on L1, platforms like Cosmos SDK and Avalanche Subnet can create application chains. On L2, we can also see solutions like Optimism Stack, Polygon Supernets, and Starknet.
Regarding functional requirements, L1 and L2 app-chains can meet different needs. L1 Appchains provide sovereign security, MEV resistance, flexibility, and independence, but they also carry the burden of initiating security and maintaining validators. On the other hand, L2 app-chains will inherit the security of the base layer (such as Ethereum) and benefit from lower transaction costs and scalability, but they are less flexible as they adhere to the security and consensus mechanisms of the base layer.
It’s also worth noting that deploying App-chains involves a combination of trade-offs, as they require higher maintenance than simple dApps, focusing on validators, bridges, cross-chain liquidity, interoperability, and regular upgrades. Overall, App-chain is most suitable for projects that require high-frequency transactions or high customization and control over blockchain parameters, as they provide a balance between scalability, security, and decentralization. For simpler dApps or projects with fewer transactions, appchain is not necessarily essential.
Para-chain and Relay-chain
Both are types of blockchains, and their main feature is that they attach security provided by a central chain instead of having their own consensus mechanism. These two concepts are often linked to the Polkadot and Kusama networks, where many chains run parallel.
“Para” means “beside” in Greek. In “parachains,” this concept refers to each blockchain running alongside a central relay chain, rather than independently. For example, in Polkadot, all parachains run parallel to each other and connect to the central Polkadot relay-chain.
Furthermore, the main advantage of the parachain model is that it allows many blockchains with different functions and purposes to run simultaneously and interact on a single network.
Side-chain
A sidechain is a separate blockchain that runs parallel and operates independently of the main blockchain. Sidechains use their own consensus models and block parameters to process transactions quickly and efficiently. Notably, sidechains often provide the ability to interact with the main chain through a two-way bridge.
Sidechains can offer a potential solution to scalability issues that current blockchains face. They can not only run dApps and help reduce the computational load of the main chain, but they can also have their own tokens, consensus mechanism, and security. Some notable sidechain projects currently receiving attention include Polygon, Loom Network, Gnosis, Skale, etc.
- Advantages of sidechains: include technology autonomy, reasonable customization with the vision of the product, and they can easily be compatible with the main chain (For example, most sidechains currently are EVM compatible, facilitating Ethereum mainnet DApps to easily expand operations on these sidechains.)
- Disadvantages of sidechains: sidechains are often less decentralized (fewer nodes), and the architecture of sidechains typically trades off security & decentralization for better scalability.
Super-chain
Pioneered by Optimism, superchain is a Layer2 connecting network built on the OP Stack, aiming to bring internet-scale to Ethereum, ensuring scalability without fragmenting the ecosystem. The main feature of the Super Chain is that it can seamlessly move between chains and share security, communication layer, and open-source development through a unified network, making the deployment of a new chain as easy as deploying a smart contract.
To understand more, let’s first explore the OP Stack of Optimism. Thanks to the OP Stack, any individual or organization can easily build a Layer 2 platform on Ethereum. Simply put, the OP Stack is a set of SDKs. Layer 2s using the OP Stack are called Op-chains. And combining many Op-chains, we have the Superchain.
Currently, Base is the first blockchain built on the OP Stack and joins the Optimism Superchain. Coinbase and OP Labs will collaborate to build a strong Optimism Collective, making the OP Stack the most popular SDK in the cryptocurrency market.
Hyper-chain
Hyperchain is similar to the Optimism Superchain mentioned above, the main difference being that it is built using ZK rollup, and launched by zkSync.
Like Superchain, it will operate as a new layer over the existing layer 2 protocol. Chains will be able to combine and interact with each other, allowing for near-instant liquidity transfers and fast loans between protocols in the system, something that cannot be done between L1 blockchains.
Additionally, Hyper-chains also have some of their own core features, such as:
- Lightweight orderer with low sequence latency
- Interacting applications without trusting bridge assumptions
- Self-contained private chains, connected to the ecosystem…
Hyperchain is expected to be used by projects with specific requirements for privacy, speed, and data availability. Gaming, social networks, low-latency exchanges, and banking are some of its potential users in the future.
This article summarizes the most basic knowledge about blockchain, especially information about Multichain, Crosschain, Omnchain, Appchain, Parachain, Sidechains, Superchains, Hyperchains. I hope through this article, you have learned how to differentiate these concepts, understand their differences, and their applications. If you have any questions, please leave a comment for me to answer. Thank you for reading, and I wish you become a wise investor.
