A custom blockchain, often referred to as an application-specific blockchain or “appchain,” is a network specifically designed to serve a single application. Unlike general-purpose blockchains like Ethereum that host thousands of competing dApps, an appchain is dedicated to the unique performance, governance, and economic needs of its specific use case. 

The opportunity for custom blockchains is expanding rapidly across industries. The global blockchain technology market is projected to surge from approximately $33 billion in 2025 to over $393 billion by 2030, with some forecasts predicting a market size of over $1.2 trillion. This growth is driven by startups and enterprises in sectors like finance, supply chain, AI, healthcare, and seeking efficiency, security, and transparency that custom blockchain development provides.  

The Background: The Need for Custom Blockchains

The move toward appchains is a direct response to the limitations of general-purpose networks. Custom blockchains offer sovereignty over critical network features:

1. Blocktime and TPS: General-purpose chains have shared, limited throughput (e.g., 15-30 Transactions Per Second on Ethereum 5 years back to 120 TPS), leading to network congestion and unpredictable performance. An appchain provides dedicated blockspace, enabling developers to configure block times and guarantee high, stable TPS for their application.  

2. Any VM: Most public blockchains are tied to the Ethereum Virtual Machine (EVM). Custom chains offer the freedom to use any virtual machine, such as the high-performance WebAssembly (WASM) or the Solana Virtual Machine (SVM), allowing developers to use powerful languages like Rust and C++ and optimize the execution environment.  
3. Free/Cheap Transactions: Gas fees on shared networks are volatile and can become prohibitively expensive. Appchains can design their own fee models, enabling free, cheap, or subsidized transactions. This is crucial for user adoption in sectors like gaming and social media.  
4. Curated Validators: Public networks have open, permissionless validator sets. For enterprises requiring regulatory compliance (KYC/AML) and data privacy, a custom chain can be configured with a permissioned set of known, vetted validators.  
5. Governance Rules: Applications on a shared L1 are subject to that network’s governance. A sovereign appchain empowers its own community with on-chain governance to control protocol upgrades and manage its future independently.
6. Node Sales: A novel business model exclusive to custom chains involves selling node licenses, often as NFTs. This strategy allows projects to raise capital directly from their community while bootstrapping a decentralized network of operators from day one.  
7. MEV and Toxic Flow Blocked: General-purpose chains are vulnerable to Maximal Extractable Value (MEV) strategies like “sandwich attacks,” where bots exploit users’ trades for profit. A custom blockchain can build MEV mitigation directly into its base layer, using techniques like encrypted mempools or fair-ordering sequencers to protect users from such toxic flow.  

How Custom Blockchains are Built: Widely Used Stacks

Mature frameworks have made building custom blockchains more accessible than ever. These toolkits provide pre-built components for consensus, networking, and application logic.

For Custom L1s:

• Cosmos SDK: A modular framework for building sovereign, interoperable Layer 1 blockchains. It uses the high-performance CometBFT consensus engine and allows developers to assemble pre-built modules (e.g., for staking, governance, and token transfers). Its key feature is the Inter-Blockchain Communication (IBC) protocol, which enables seamless communication and asset transfers between independent chains in the Cosmos ecosystem.  
• Avalanche L1s: L1s are custom blockchains within the Avalanche ecosystem that have their own rules, virtual machine, and validator set. As custom L1 validators no longer have to validate Avalanche’s Primary Network mandatorily, the team has full flexibility over how they want to bootstrap the validator set.

For Custom L2s:

• Arbitrum Orbit: A framework for launching custom Layer 2 or Layer 3 chains using Arbitrum’s battle-tested optimistic rollup technology. Orbit chains are highly customizable, allowing developers to choose their own gas token, data availability solution (including the ultra-low-cost AnyTrust mode), and gain EVM+ compatibility with the Stylus upgrade, which supports languages like Rust and C++.  
• ZKsync Elastic Chains: A modular, open-source framework for building ZK-rollups called “Elastic Chains”. These chains use cryptographic validity proofs (ZK-SNARKs) to inherit Ethereum’s full security while offering near-instant transaction finality, eliminating the long withdrawal periods associated with optimistic rollups. The ZK Stack enables an “Elastic Network” of interoperable chains with native, trustless communication.  

Applications Demanding Custom Blockchains

The most demanding applications are already leveraging custom architectures to achieve capabilities impossible on general-purpose networks.

• Perp DEX: Perpetual exchanges require sub-second latency and massive throughput.
  • Hyperliquid runs on its own custom L1 blockchain with a proprietary HyperBFT consensus, enabling it to process 200,000 orders per second with sub-second finality.  
  • Lighter.xyz is a purpose-built zk-rollup that settles on Ethereum, using custom zero-knowledge circuits to verify all trading logic on-chain, combining centralized exchange performance with Ethereum’s security.  

• Automobile: Toyota is building its Mobility Orchestration Network (MON) on a custom Avalanche Subnet. This creates a trust layer for the mobility ecosystem, allowing for the secure and transparent sharing of vehicle data (e.g., ownership, maintenance records) between automakers, insurers, and regulators.  

• Crypto x AI: The convergence of AI and crypto requires infrastructure for a high-volume, machine-to-machine economy.
  • Fetch.ai uses its custom blockchain to power a decentralized network of autonomous AI agents. The chain serves as a public ledger for agent activity and facilitates the micro-transactions needed for agents to buy and sell data and services. 

• Tokenized Asset Platforms: Bringing real-world assets (RWAs) on-chain requires compliance and specialized features.
  • Ondo Finance is developing Ondo Chain, a public L1 designed for institutional-grade RWAs, with features like permissioned validators to prevent front-running and the ability to pay gas fees in tokenized assets.  
  • Provenance is a public L1 built with the Cosmos SDK, purpose-built for the financial services industry to support complex workflows like loan origination and asset exchange at scale.  

• BFSI Chains: Even foundational financial primitives benefit from dedicated chains.
  • Noble is a minimalist appchain in the Cosmos ecosystem created for a single function: to be the native issuer of USDC. This solves asset fragmentation by providing a canonical, trusted source of USDC that can be seamlessly transferred across dozens of other Cosmos chains via IBC.  

Let’s Wrap:

The blockchain industry is undergoing a fundamental architectural shift. The monolithic, one-size-fits-all model is giving way to a more mature and scalable “network of networks” built on sovereign, application-specific blockchains. The need for predictable performance, customizability, and sovereign value capture makes this transition inevitable. With powerful frameworks democratizing their creation, appchains are no longer a niche concept but the established frontier of Web3 development. The future is not a single “world computer,” but a vibrant, interconnected ecosystem of purpose-built chains.

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