There are many technical jargons in the Crypto world. Today, we will be focusing on two common technical terms; Mainnet and Testnet, and the meaning of a mainnet swap. Let’s get started!
What is a Testnet?
As the name suggests, testnet is an alternative test network for developers to simulate the actual project. They use it for conducting experiments such as different features, and other functionalities. As it is a testing platform, any transaction that occur would not affect the main application and this prevents disruption. There are zero cryptocurrency costs involved which also facilitate upgrades of the blockchain. Therefore, testnets are suitable for testing smart contracts and decentralized applications (“DApps”).
What is a Mainnet?
It is the short form of main network, is the opposite of the testnet. It is the main public blockchain of a cryptocurrency network. This is where live transactions occur on a distributed ledger with actual fees being incurred for any transaction. The coins have real value for people to invest and trade. Thus, the mainnet is important because it:
- Serves as a verifiable proof of development that a project is live and actual transactions are happening on a blockchain
- Increases credibility of a project and the team’s commitment which also helps potential investors in evaluation
- Rewards miners for validating transactions and preventing network spamming
Mainnet is also a factor that affects cryptocurrency prices as a successful launch might lead to increases in value. For instance, the mainnet release of EOS last year saw its the price surge, possibly reflecting confidence in future adoption and technical potential by the community. However, other factors such as market trends and real-world application are also important considerations.
Here are the Key Differences
A common practice for Initial Coin Offering (ICO) projects is to issue their tokens on an existing blockchain (like Ethereum) and raise funds. Typically, the funds collected are used to grow their community and also develop a native blockchain which is tested during testnet phase. Subsequently, the project would then move towards a mainnet launch, where the blockchain is fully deployed. A migration of existing issued tokens (eg. ERC-20) to the project’s new blockchain network is then required. This process is known as “mainnet swap” or “token swap”.
In this phase, current tokens are replaced gradually by newly issued coins on a one-to-one ratio and all blockchain activity is moved to the new chain. Some projects might also move to new protocols which suit their needs instead of having developed a native blockchain.
In summary, every blockchain has mainly two different networks; testnet and mainnet. Testnets help developers to refine and test their project where Mainnets are the end finished products.
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