Review and sign transactions from a single secure screen with Ledger Flex™

Discover now

Up your Web3 game

Ledger Academy Quests

  • Test your knowledge
  • Earn POK NFTs
Play now See all quests

Subnet Meaning

Jan 12, 2024 | Updated Jan 12, 2024
A subnet (sub-network) is a network within a network.

What is a Subnet in Cryptocurrency?

A subnet describes a smaller network inside a much larger network. In Internet Protocol (IP) networks, for example, it is a logical partition of a bigger network into several, smaller segments. This reduces the distance that network traffic must travel to arrive at its destination, eliminating unnecessary routers. 

In the cryptocurrency context, a subnet is a discrete sovereign protocol designed to operate within a layer 1 blockchain, such as Ethereum and Avalanche. A single blockchain can have hundreds or thousands of subnetworks running in unison to complement the mainnet. 

A subnetwork comprises a group of nodes that perform a similar function or process unique transactions and data. These nodes come together to form smaller individual decentralized networks within the larger network, known as “chains of blocks”. 

Blockchain subnetworks are autonomous, with their own set of rules, consensus mechanisms, and validators to ensure the overall network security.

So why are sub-networks important to blockchains?

During periods of high activity on layer 1 blockchains, the network can become congested and overwhelmed by computational demands, resulting in high gas fees. Subnetworks create sub-chains or extra network layers that tackle subsets of the transactions and execute smart contracts. This improves the network’s speed and efficiency. Distributing the data load across several subnetworks also significantly enhances scalability and overall network performance, and lowers transaction costs.

Examples of Subnetworks

Some popular subnetworks in the blockchain space include:

  • Avalanche subnets: Avalanche has three major networks within the entire ecosystem. This includes Exchange Chain (X-Chain), Platform Chain (P-Chain), and Contract Chain (C-Chain). P-Chain coordinates validators and Avalanche’s Snowman consensus mechanism,  the C-Chain exclusively deals with smart contracts, and the X-Chain is responsible for the creation and exchange of digital assets.
  • Cosmos SDK subnetworks: Includes Secret Network sub-network and Binance Smart Chain sub-network.

Subnetworks can potentially extend the utility of blockchains by enhancing their scalability and enabling the flexibility to create user-defined functions. They also facilitate upgrading the network without jeopardizing the stability of the main chain.

Shapella Fork

The Shapella fork is the combination of two major Ethereum network upgrades (Shanghai and Capella upgrades) that occurred simultaneously. Together, these upgrades allowed users to withdraw their staked ETH on the network.

Full definition

Proof of Staked Authority (PoSA)

Proof of Staked Authority is the amalgamation of proof of stake and proof of authority consensus mechanisms.

Full definition

Attention Economy

The attention economy is an economic approach that views human attention as a finite or scarce resource that can be monetized.

Full definition

Own your crypto future

Stay informed with security tips, updates, and exclusive offers from Ledger

Your email address will only be used to send you our newsletter, as well as updates and offers. You can unsubscribe at any time. Learn more

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.