What’s a Modular Blockchain?

A modular blockchain is a construction that distributes core blockchain features (execution, consensus, knowledge availability, and settlement) into totally different, particular layers. This modular structure permits one layer to deal with a selected activity whereas assigning the opposite two or three features to different chains.

Modular chains do that to enhance scalability and decentralization within the blockchain ecosystem with out sacrificing safety. The important thing benefits of a modular structure are that it solves the normal blockchain know-how scalability issues, reduces transaction prices, provides builders the pliability to customise parts, and deploys initiatives quicker.

However that’s not all there’s to know concerning the modular blockchain construction. This text will reply questions like: What’s a modular blockchain? And what are the variations between monolithic and modular blockchains? As well as, we’ll discover real-world examples of modular blockchains like Celestia, Optimism, and Polygon Avail. Let’s get began!

What Are Modular Blockchains?

Modular blockchains are a kind of blockchain structure that creates a extra scalable system with out compromising decentralization or safety. They do that by splitting blockchain know-how’s core duties—execution, consensus, knowledge availability, and settlement—into segments or modules as a substitute of doing all of them on a single layer.

• Execution: That is the place transactions and sensible contracts are processed.
• Consensus: The consensus layer ensures that every one community contributors agree on the order and validity of transactions.
• Knowledge Availability: That is the place all transaction knowledge is made publicly accessible in order that anybody can confirm the blockchain’s state.
• Settlement: That is the ultimate affirmation layer, guaranteeing all processed knowledge is anchored and safe.

Usually, blockchain structure wants three parts: safety, decentralization, and scalability. Nevertheless, earlier than modular chains, no community within the blockchain trade may obtain these parts efficiently as a result of monolithic chains are designed to deal with all of the above duties in a single layer. Therefore, these chains face the “Blockchain Scalability Trilemma.”

For monolithic blockchains, compromising on safety will probably be an enormous drawback, so most chains are both decentralized and safe or scalable and safe. Nevertheless, modular blockchains are constructed to carry out core duties on totally different layers, with every module optimized for a selected perform. Collectively, they type an entire and extra scalable blockchain system.

There are three strategies of implementing modular blockchains: Rollups, Validium, and Sovereign Rollups. Here’s a breakdown of how these main strategies deal with scalability points and decentralization.

• Rollups: Rollups course of transactions off-chain and bundle them into batches for submission to a base layer-1 (L1) blockchain system for settlement, consensus, and knowledge availability. There are two varieties of rollups: optimistic and ZK rollups. Optimistic Rollups assume all transactions are legitimate until confirmed false, whereas ZK rollups assume all transactions are false till confirmed in any other case.
• Validium: Validium is a variation of rollups that mixes off-chain execution with off-chain knowledge availability. It makes use of a community of Proof-of-Stake validators to retailer transaction knowledge off-chain. Batches are then submitted to the L1 together with validity proofs (e.g., zk-proofs) with out the information, which boosts scalability considerably.
• Sovereign Rollups perform as each an execution and settlement layer, with knowledge blocks printed straight onto the rollup. They deal with execution and settlement whereas outsourcing consensus and knowledge availability to a modular layer (e.g., Celestia). In contrast to rollups and Validium, sovereign rollups don’t require L1 sensible contracts for validation.

Now that we’ve highlighted the idea of modular blockchains, their construction, and implementation strategies, let’s look at how modular blockchains work.

How Does a Modular Blockchain Work?

Modular blockchains work by dividing the 4 core parts of blockchain know-how, that are execution, consensus, knowledge availability, and settlement, into distinct layers.

1. Execution

The execution layer is chargeable for processing transactions and updating the community’s state. When a transaction is submitted, it enters the execution module, which processes it towards the community’s present state. This layer maintains a queue of pending transactions, organizes them into batches, and updates the related knowledge, similar to account balances and occasion logs.

On the finish of every batch, the execution layer computes a brand new cryptographic state root, which represents the up to date state of the system after processing the batch. In a modular blockchain structure, the execution module is optimized to course of transactions. It may alter parameters like block dimension, fuel charges, and validator consensus to enhance throughput and scale back prices.

After updating the state, it should validate its work with the broader community. As an illustration, in a ZK-rollup mannequin, the execution layer generates a zero-knowledge proof—a cryptographic certificates—confirming that every one state transitions had been accurately processed. As soon as verified, this proof supplies near-instant finality.

In the meantime, in an optimistic rollup mannequin, as a substitute of producing a proof, the execution module publishes the uncooked transaction knowledge and the brand new state root. The community then enters a “problem window” the place any participant can submit a fraud proof in the event that they detect an invalid transaction. If no challenges are raised, the batch is taken into account ultimate.

2. Consensus

The consensus layer is necessary for reaching an settlement on the blockchain’s present state. It ensures that each participant within the community, together with nodes, miners, and validators, agrees on the legitimacy of every transaction, the validity of blocks, and the particular order through which transactions are recorded onto the blockchain.

This course of is prime for the community’s decentralization and safety because it eliminates the necessity for a government to confirm transactions. By consensus mechanisms similar to Proof of Work (PoW), Proof of Stake (PoS), and others, the chain ensures that every one community contributors comply with the identical guidelines and protocols, stopping double-spending, fraud, and discrepancies throughout the distributed ledger. 

3. Knowledge Availability

Knowledge availability is the method that ensures entry to requested knowledge throughout the blockchain system at any time. This layer shops the transaction knowledge after completion, enabling community contributors to confirm it towards historic data later. Because of this, block producers should publish the information from block manufacturing for community friends to obtain, retailer, and confirm later.

Utilizing Rollups, for example, proofs (for ZK rollups) or calldata (for optimistic rollups) are ineffective until somebody can entry the underlying transactions. That is the place a devoted knowledge availability (DA) layer is available in. So, as a substitute of crowding the settlement layer with gigabytes of information, the execution module posts its proofs or full calldata to a DA community similar to Celestia or Polygon Avail.

These networks are optimized for storing and serving transaction knowledge: they run mild‑consumer–pleasant erasure coding, chunk sampling, and protocols to ensure that anybody can later reconstruct the complete batch. This separation ensures that nodes validating proofs shouldn’t have to bear the lengthy‑time period burden of storing each transaction ever processed.

4. Settlement 

The ultimate step is anchoring your work to a excessive‑safety settlement layer, which may very well be a big proof‑of‑stake chain like Ethereum. The execution layer submits a transaction that features both the zero‑information proof (ZK‑rollups) or the state root plus a reference (e.g., a Merkle root) to the DA layer’s batch (optimistic rollups).

As soon as that transaction is put in a finalized block on the settlement chain, the batch inherits its financial safety, decentralization, and censorship resistance. ZK‑rollups obtain finality as soon as the proof is verified, whereas optimistic rollups wait out their problem window earlier than contemplating the batch irrevocable.

By utilizing a modular blockchain structure, networks can optimize every part independently. As an illustration, rollups can focus solely on execution whereas outsourcing consensus and knowledge availability to extra sturdy layers like Ethereum or Celestia. This separation results in extra environment friendly, scalable, and customizable blockchain ecosystems.

What Are the Execs and Cons of Modular Blockchain?

The professionals and cons of modular blockchains are listed under:

Execs of Modular Blockchains

The professionals of modular blockchains are velocity, scalability, financial sustainability, flexibility, specialization, improved upgradability, and interoperability.

• Velocity: In contrast to monolithic blockchains, which deal with all execution, consensus, knowledge availability, and settlement on a single chain, modular blockchains cut up them into totally different modules, making them quick even because the community scales.
• Scalability: Modular blockchains enhance scalability by specializing in one activity and delegating different duties to separate layers, which allows every layer to carry out independently and scale as wanted.  For instance, knowledge availability layers can develop to deal with extra and scale throughput with none modifications within the execution module.
• Financial Sustainability and Value-effectiveness: Modular designs scale back congestion and value on Layer 1 by transferring intensive duties like execution and knowledge availability off-chain. This, in flip, permits customers to profit from quicker and cheaper transactions, particularly in rollup environments.
• Specialization: Every layer may be designed and optimized for a selected perform. Execution layers can deal with excessive throughput and low latency, consensus layers on validator coordination and safety, and knowledge availability layers on reliably storing and serving knowledge from all/a number of transactions.
• Flexibility: Builders can select any digital machine, parts, or knowledge availability options of their alternative. This “construct your personal stack” modular strategy helps quicker experimentation and customization with out ranging from scratch.
• Improved Upgradability: Since every part is unbiased, upgrades and modifications may be made on one layer with out affecting the others, guaranteeing quicker and extra seamless growth cycles.

Cons of Modular Blockchains

The cons of modular blockchains are elevated growth complexities and latency points.

• Elevated Growth Complexity: As every perform is split into totally different layers, it will increase the general complexity of the system. This will scale back adoption charges by performing as a barrier for builders and customers who should perceive and work together with a number of parts.
• Latency Points: Communication between totally different layers results in latency, particularly when totally different layers are maintained by separate groups or networks. Moreover, modular designs haven’t been totally examined like monolithic chains, so till then, there should be issues about their resilience.

What Are the Completely different Kinds of Modular Blockchain Networks?

The various kinds of modular blockchain networks are consensus, knowledge availability, execution, hybrid chains, and interoperability frameworks. Beneath is a rundown of those modular blockchain networks and their totally different core features.

1. Consensus Layer Networks

These networks are chargeable for finalizing transactions and securing the complete ecosystem. By operating a big, decentralized set of validators (or miners), they assure that it turns into immutable as soon as a block is accepted.  Greater‑stage chains anchor their proof or state roots to those layers to inherit censorship resistance and financial safety.

Ethereum is an effective instance because it presents sturdy decentralization and a proof‑of‑stake mechanism. On the identical time, networks like Avalanche’s C‑Chain prioritize sub‑two‑second finality at the price of a smaller validator set.

2. Knowledge Availability Layer Networks

Quite than executing transactions, DA layers deal with reliably publishing and storing transactional knowledge in order that any community can retrieve and reconstruct state. By offloading knowledge storage, they relieve execution chains of this burden and allow light-weight purchasers.

As an illustration, Celestia led the modular blockchain area by permitting arbitrary rollups or sovereign chains to submit batches of transactions and later obtain the whole knowledge to confirm correctness. Polygon Avail follows an analogous mannequin however targets increased throughput and presents decrease posting charges.

3. Execution Layer Networks (Rollups)

Execution layers bundle, execute, and order transactions off‑chain, then submit concise proofs or problem knowledge again to a DA or settlement layer. Optimistic rollups, similar to Arbitrum and Optimism, assume transactions are legitimate and make use of fraud proofs to problem incorrect batches inside a dispute window.

ZK‑rollups like zkSync and StarkNet assume transactions are false till confirmed in any other case. They generate cryptographic proofs that attest to the validity of every batch earlier than it’s printed, which allows close to‑immediate finality and stronger safety assurances.

4. Hybrid Modular Blockchains

These networks mix execution with consensus or knowledge‑availability preparations. A very good instance is Validiums (e.g., StarkEx Validium), which execute transactions and produce ZK proofs like ZK‑rollups however retailer knowledge off‑chain beneath the custody of a specialised knowledge availability committee, lowering prices whereas introducing belief assumptions.

Right here, initiatives usually mix layers for tailor-made options. As an illustration, Manta Community makes use of Celestia for DA, Ethereum for settlement, and Polygon CDK for execution. In the meantime, EigenLayer enhances safety by permitting Ethereum validators to “restake” property throughout modular blockchains.

5. Interoperability Frameworks

Interoperability frameworks or Layer 0 networks provide a standard safety layer, governance construction, and messaging protocols to a set of linked chains. Polkadot’s Relay Chain secures its parachains and facilitates cross‑chain message passing through a shared safety mannequin.

Then again, Cosmos’ Inter‑Blockchain Communication (IBC) protocol hyperlinks autonomous “zones” to the Cosmos Hub, permitting token transfers and knowledge trade throughout in any other case unbiased parts or blockchains.

What’s the Distinction Between Monolithic Vs Modular?

The desk under reveals the variations between monolithic and modular blockchain designs:

What Are Examples of Modular Blockchain Initiatives?

The examples of the modular blockchains are Celestia, Ethereum, Polygon Avail, Dymension, Gasoline Community, and Eigen Layer. Here’s a detailed breakdown of among the finest modular blockchains.

1. Celestia

Celestia is the primary modular blockchain community. It launched in October 2023 and was constructed particularly for knowledge availability sampling and consensus. As a substitute of managing consensus for purposes, it focuses on making transaction knowledge obtainable and verifiable for different chains. Celestia offloads knowledge availability from layer-1 blockchains, permitting them to scale extra easily.

2. Ethereum

Ethereum is an information availability and consensus modular blockchain. On Ethereum, Rollups like Optimism and Arbitrum deal with execution off-chain, whereas the dad or mum chain (Ethereum) supplies consensus and knowledge availability. The community scales by means of rollup-centric execution modules whereas sustaining decentralization.

3. Polygon Avail

Polygon Avail is a modular blockchain targeted on knowledge availability, much like Celestia, however built-in throughout the Polygon ecosystem. It helps scalable app-chains and rollups. As well as, Polygon Avail is designed to serve modular blockchains with off-chain execution, particularly these within the Polygon ecosystem.

4. Dymension

Dymension is an execution layer modular chain that launched “RollApps,” that are application-specific rollups linked to a modular base layer. It allows builders to create high-performance app-chains with customizable execution environments. It additionally creates scalable app-specific chains utilizing a shared knowledge availability layer.

5. Gasoline Community

Gasoline is an execution layer optimized for efficiency and suppleness, significantly with modular knowledge availability layers like Celestia and Polygon Avail. It makes use of parallel transaction execution and an Unspent transaction output (UTXO) mannequin to maximise velocity and effectivity. The UTXO mannequin is a method the Bitcoin protocol makes use of to trace balances as they transfer between crypto wallets.

6. EigenLayer

EigenLayer allows Ethereum merchants to “restake” their ETH and supply safety to new modular chains and providers, making a decentralized community/market for shared safety. As a safety layer community, it provides a versatile safety mechanism to the modular stack.

What’s the First Modular Blockchain?

The primary modular blockchain is Celestia. Celestia’s mainnet launched in October 2023, marking it the primary in-production modular blockchain. This launch pioneered the modular chain structure by separating core features, particularly consensus and blockchain knowledge availability, from execution and settlement, which different networks deal with.

This design permits Celestia to deal with ordering and publishing transaction knowledge, whereas different layers deal with transaction execution and validation. All of the required layers be sure that blockchain initiatives constructed on them are safe, decentralized, and scalable.

Is Solana a Modular Blockchain?

No, Solana isn’t a modular blockchain. Though it has solved scalability points by growing block sizes, it lacks decentralization as the necessities for validators are too excessive.