Crypto Education

Avalanche Subnets (L1s) Explained: How They Work in 2026

Avalanche Subnets (L1s) Explained: How They Work in 2026

Avalanche subnets are independent blockchains built with Avalanche’s technology. Each one has its own validators, token economics and rules. Since the Avalanche9000 (Etna) upgrade went live on mainnet on 16 December 2024, Ava Labs calls them Avalanche L1s. The upgrade removed the requirement for subnet validators to stake 2,000 AVAX and validate the main network. L1 validators now pay a small continuous fee in AVAX. L1s talk to each other through Avalanche Interchain Messaging (ICM), and staking on one usually means staking that chain’s own token under its own rules.

  • “Subnet” and “Avalanche L1” describe the same idea. L1 is the current term for chains that converted under the Etna rules.
  • L1 validators no longer need 2,000 AVAX. They keep a prepaid AVAX balance on the P-Chain that is drawn down by a fee of roughly 1.3 AVAX per validator per month at launch levels.
  • You cannot delegate AVAX to an L1. AVAX staking secures the Primary Network, and each L1 chooses its own staking design.
  • ICM and Interchain Token Transfer (ICTT) move messages and tokens between L1s, secured by the source chain’s validators, so a small validator set means weaker security.
  • L1s can shut down. DeFi Kingdoms’ DFK Chain, one of the first subnets, was sunset in August 2026.

Avalanche subnet explained: from subnets to Avalanche L1s

Avalanche launched in 2020 with a three-chain Primary Network. The X-Chain handles asset transfers, the P-Chain coordinates validators and staking, and the C-Chain is the EVM chain where most DeFi lives. A subnet was a set of validators that agreed to run one or more extra blockchains with custom rules. Those rules could cover a different gas token, permissioned access, or a non-EVM virtual machine. Our Avalanche profile covers the three chains and the consensus protocol.

The original model had a cost problem. Every subnet validator also had to validate the Primary Network and stake at least 2,000 AVAX. A game studio wanting 10 validators had to lock up tens of thousands of AVAX and run full Primary Network nodes. That made sense for shared security, but it priced out many projects.

What Avalanche9000 changed for Avalanche L1s

Avalanche9000 was the marketing name for the Etna network upgrade. Its core change, ACP-77, introduced a new kind of validator:

  • No AVAX stake requirement. L1 validators register on the P-Chain without bonding 2,000 AVAX.
  • Pay-as-you-go fee. Each validator funds a balance on the P-Chain, and a dynamic continuous fee is deducted from it. Avalanche’s docs put the initial rate at roughly 1.3 AVAX per month. It rises if many validators register and falls back when demand eases. If the balance runs out, the validator is deactivated until topped up. Leftover balance is returned when the validator exits.
  • Sovereign validator sets. L1 validators sync and validate only their own chain, not the Primary Network. The L1 manages who validates through a validator manager contract. That can be a proof-of-authority list run by a company, or proof-of-stake using the L1’s own token.
  • Cheaper C-Chain gas. The same upgrade cut the C-Chain’s minimum base fee sharply, which matters for users moving funds between the C-Chain and L1s.

Older subnets that have not converted still work under the legacy rules: Primary Network validation plus 2,000 AVAX per validator. When people say “Avalanche L1” today, they usually mean either a converted subnet or a chain launched after Etna.

Primary Network vs Avalanche L1s

Primary Network (X, P, C chains) Avalanche L1 (post-Etna)
Validator requirement Stake at least 2,000 AVAX Prepaid AVAX balance for the continuous fee, plus whatever the L1 itself requires
Who can validate Permissionless Set by the L1: permissioned (PoA) or open staking in its own token
Gas token AVAX Any token the L1 chooses (BEAM, NXPC, GUN and others)
Retail staking Delegate AVAX to a validator (25 AVAX minimum when delegating natively) Only if the L1 offers delegation or staking for its token
Security Large, distributed AVAX-staked validator set Only as strong as the L1’s own validator set

Notable Avalanche L1s in 2026

Avalanche’s ecosystem trackers count dozens of live L1s, and VanEck has cited about 81 live chains. Most are app-specific: games, exchanges, enterprise and tokenization projects. The table below lists well-documented examples and their status as of November 2026. We picked them for visibility and range of use cases. It is not a ranking or a recommendation.

L1 Purpose Token Status Can retail stake?
Beam Gaming network (Beam Foundation, formerly Merit Circle) BEAM Live; upgraded to an independent L1 Yes: validator and delegation programs use BEAM and node tokens. Check Beam’s docs for current minimums.
Henesys MapleStory Universe (Nexon) item NFTs and gas NXPC Live since April 2025 NXPC can be staked for governance participation per the project. This is not chain validation.
GUNZ Economy of the shooter game Off the Grid (Gunzilla) GUN Mainnet since 31 March 2025 No public retail validator staking documented
Dexalot Fully on-chain order-book exchange ALOT Live; DefiLlama lists TVL of about $8.6 million (Oct 2026) No retail chain validation; check Dexalot for any token programs
FIFA Blockchain Home for the FIFA Collect NFT platform No public token confirmed Announced May 2025, built with Modex No
Progmat Japanese security-token platform None (enterprise) Migrating tokenized assets to a dedicated L1 No
DFK Chain DeFi Kingdoms game JEWEL Sunset 28 August 2026; assets moved to the C-Chain Not applicable

If you mainly want DeFi on Avalanche, most of it still runs on the C-Chain. Our list of the best Avalanche DeFi projects covers it.

Best Avalanche subnets to stake on: how L1 staking really works

There is no universal “best avalanche subnet to stake on”. Each L1 writes its own staking rules, and many offer no retail staking at all. Before staking on any Avalanche L1 validator or delegation program, work through these questions:

  1. Is the validator set open? On a proof-of-authority L1, the company picks the validators, so there is nothing for you to delegate to.
  2. What token do you lock, and where do rewards come from? Rewards paid from new token issuance dilute holders. Rewards from real transaction fees are more durable.
  3. What are the exit terms? Lock periods, unbonding and penalties are set by the L1’s staking contract, not by Avalanche. Read them before depositing.
  4. Who controls the contracts? Validator manager contracts can often be upgraded by the team. Check whether a multisig can change staking rules.
  5. How liquid is the token? Rewards on a thinly traded game token can be wiped out by a single price drop.
  6. Is the chain sustainable? DFK Chain’s 2026 shutdown shows that an L1 is only as durable as the team or community paying for it.

If you want rewards on AVAX itself, delegate to a Primary Network validator or use liquid staking. Our guide on how to stake Avalanche covers durations and minimums. For staking across other networks, see the crypto staking hub.

Avalanche interchain messaging (ICM) and ICTT

Avalanche L1s are separate chains, so they need a way to pass data and value. ICM, formerly known as Avalanche Warp Messaging plus Teleporter, is Avalanche’s native answer:

  • Warp messaging (the base layer): validators of the source L1 sign an outgoing message with BLS signatures. A relayer gathers enough signatures, by stake weight, and submits them to the destination chain. The destination checks them against the source L1’s validator set as registered on the P-Chain.
  • ICM contracts (formerly Teleporter): a standard smart-contract interface on EVM L1s for sending and receiving those messages, handling fees, delivery receipts and retries.
  • Interchain Token Transfer (ICTT): contracts built on ICM for moving tokens. A token has one “home” chain, where it is locked as collateral, and one or more “remote” chains, where a representation is minted. Sending it back burns the remote copy and unlocks the original.

The key security point: an ICM message is only as trustworthy as the validators of the chain that sent it. No outside bridge committee is involved, which removes one layer of risk. But a token arriving from an L1 run by five company-operated validators carries those five validators’ trust. This is similar to how Cosmos IBC relies on each chain’s validator set.

Tips for bridging to Avalanche subnets

We cover the step-by-step route onto the C-Chain in how to bridge to Avalanche. Moving onward to an L1 is usually done inside the L1’s own app or portal, which uses ICTT or a partner bridge under the hood. A few checks apply to any L1:

  • Get gas in the L1’s token. Beam uses BEAM, GUNZ uses GUN and Henesys uses NXPC. Many portals let you swap for a small gas amount during the transfer. Otherwise you may arrive with funds you cannot move.
  • Confirm which version of the token you hold. USDC moved over ICTT is a remote representation, not Circle-issued native USDC, unless the project says otherwise. Exchanges may not accept it as a deposit.
  • Use the L1’s official portal. Find it from the project’s verified site, not a search ad or a direct message.
  • Send a small test first. Relayers can lag on quiet chains, and a test transfer shows how long delivery really takes.
  • Know the exit path. If the L1 sunsets, as DFK Chain did, you need to bridge back before the deadline. Follow the project’s announcements.

Are Avalanche L1s the same as Ethereum layer 2s?

No. An Ethereum layer 2 posts its data to Ethereum and inherits Ethereum’s security through fraud or validity proofs. An Avalanche L1 has its own consensus and validators. It does not inherit the Primary Network’s security, which is why the term “L1” replaced “subnet”. The trade-off is more control and predictable costs for the operator, but security depends on how strong its validator set is.

FAQ

What are Avalanche L1s?

Avalanche L1s are independent blockchains built with Avalanche’s software that register their validators on the P-Chain. They used to be called subnets. Since the Etna upgrade in December 2024, they can run their own validator sets without staking 2,000 AVAX per validator. They pay a continuous AVAX fee instead and choose their own gas token, rules and virtual machine.

Do Avalanche L1 validators need to stake AVAX?

Not for chains that converted under ACP-77. They fund a P-Chain balance that pays a dynamic fee, initially about 1.3 AVAX per month per validator. The L1 can still require its own stake in its native token. Legacy subnets that never converted keep the old rule: 2,000 AVAX and Primary Network validation.

What is ICM on Avalanche?

ICM (Avalanche Interchain Messaging) is the native protocol for L1s to exchange messages. Source-chain validators BLS-sign a message, a relayer delivers it, and the destination verifies the signatures against the P-Chain validator registry. ICTT, built on top of ICM, handles token transfers using a lock-on-home, mint-on-remote design.

Can I earn AVAX by staking on a subnet?

Not directly. AVAX staking rewards come from securing the Primary Network, so you delegate AVAX to a Primary Network validator or use a liquid staking token. Staking on an L1 typically earns that L1’s token under its own rules, if it offers staking at all. Rewards and lock-ups vary, so read the L1’s documentation first.

Crypto is volatile and risky; this is education, not financial advice. Do your own research.

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