The Differential is an integral part of the buggy setup equation. With a badly setup differential, the buggy will not perform at its best.

There are two types of differential. Gear and Ball.
Gear differentials use gears in a case of oil which can be changed to be either thicker or thinner, much akin to a shock absorber. So generally speaking, in hot and dry conditions, thicker oil is used. In cooler, wetter conditions, thinner oil is used.

With the ball differential, a circle of balls are used to spread the load from the drive train to the driven wheels. If you hear a chirp or bark from your ball diff under load, then it’s time to tighten the differential.

A Schumacher ball differential