Monolithic Blockchains vs Modular Blockchains
In this article we will cover the basic architecture of monolithic blockchains and modular blockchains, as well as cover scaling through modular rollups.
Context: Infra Blockchains have always dealt with the issue of scaling & decentralization, vastly due to their monolithic design. Modular blockchain designs decouple a blockchains executions from its consensus and data layers, allowing for flexibility in customizing individual aspects of the chain.
Intro:
Over the last couple of years, the rise of competing alt L1 chains lead the market narrative, claiming to solve issues that the last Layer 1 lacks. Due to this, the market has seen a dilution with many Infra Blockchains that provide minor improvements to the last. These new chains also compete to adopt new users, leading to fragmented liquidity for protocols transacting on the L1 native token.
Recently we’ve seen a narrative shift towards scaling solutions as well as the concept of modular blockchains. But what exactly is a modular blockchain, and how does it differ from the monolithic design?
First let’s start with a monolithic blockchain model.
Monolithic Blockchains:
In a monolithic blockchain design, all components are integrated into a single, large software system, making it a centralized and rigid structure. This design approach is characterized by a single, unified codebase, with all components tightly coupled to one another, making it difficult to modify or replace individual components without affecting the entire system.
Ethereum is a classic example of a monolithic blockchain architecture (excluding its optimistic/ zk rollups).
Let’s break down the key components in a blockchain architecture:
Consensus: The consensus mechanism is responsible for ensuring that all nodes in the network agree on the state of the blockchain and that new blocks are added to the chain in a secure and consistent manner.
Data availability: The data availability component is responsible for ensuring that the data stored on the blockchain is accessible and available to all nodes in the network.
Settlement layer: The settlement layer is responsible for settling transactions on the blockchain. This involves updating the state of the blockchain to reflect the transactions that have been processed and ensuring that the updated state is consistent across all nodes in the network.
Execution layer: The execution layer is responsible for executing the code of smart contracts and decentralized applications on the blockchain. This includes processing transactions, executing code, and managing the state of the blockchain.
Modular Blockchains:
A modular blockchain is composed of a set of modular components that can be easily swapped or replaced. This allows for greater flexibility and customization of the blockchain, as different modules can be chosen to suit the specific needs of a particular application or use case.
Modular Components include:
Consensus algorithms
Data availability
Settlement layer
Execution layer
By using a modular approach, developers can select the specific components that are most appropriate for their particular application and easily replace or update them as needed. This makes it easier to optimize the performance and security of the blockchain, and also provides a level of sovereignty over the predetermined constraints of an existing monolithic design. This approach makes it easier for developers to create and deploy their own blockchain solutions, without having to build everything from scratch.
Similar to the Layer 0 model (Cosmos & Polkadot), the modular approach is designed under the idea that the future of blockchain will be multichain. However, the modular blockchain design differs from the modular software design of a layer 0 chain such as Cosmos. For example, the modular software of the Cosmos SDK and Tendermint combine the execution layer and consensus/ data availability layer as its own monolithic chain.
Modular Software:
A modular blockchain and a modular software design both provide the opportunity for greater customization of the blockchain, however, there are some key differences between the two concepts.
Level of abstraction
Level of interoperability
Abstraction Level:
A modular blockchain is focused on the underlying infrastructure and protocols of the blockchain, such as the consensus algorithm and data availability. A modular software design, on the other hand, is focused on the functionalities and features of the software application.
Interoperability Level:
Because a modular blockchain is focused on the underlying infrastructure and protocols, different components can be swapped out or replaced as needed, allowing for greater flexibility and customization. A modular software design, on the other hand, is focused on the functionalities and features of the software application, limiting the level of interchangeability.
Rollups:
Rollups are a scaling solution for blockchains that allows for off-chain computation and on-chain validation. The main two designs are optimistic and zk-rollups. They work by aggregating multiple transactions into a single "rollup" transaction, which is then recorded on the blockchain. This reduces the amount of data that needs to be stored and processed on the blockchain itself, allowing for faster and cheaper transactions.
So how do rollups execute on a modular architecture?
In a modular blockchain architecture, the core blockchain protocol is separated into different modules, each with a specific function. Rollups operate within the context of this architecture by being implemented as an additional layer on top of the core blockchain protocol. In a modular model this is referred to as sovereign rollups.
Sovereign Rollups:
Sovereign rollups are a type of rollup solution that allows for greater control and autonomy over the off-chain computation and on-chain validation process.
Because sovereign rollups are not bound to the same settlement layer as the underlying blockchain, they are not dependent on how they execute their off-chain computations.
On the other hand, in a monolithic blockchain architecture, the rollup functionality is integrated directly into the core blockchain protocol. The off-chain computation and on-chain validation are handled by the same system, making it less flexible and scalable.
Settlement Layer & Rollups:
The settlement layer in a modular stack works by validating the proof of validity generated by the rollup layer, and then recording the rollup transactions on the blockchain.
In the context of rollups, the settlement layer is particularly significant because it ensures that the rollup transactions are recorded in a secure, reliable, and trustless manner.
The settlement layer provides rollups with multipurpose execution:
Validity proofs
Bridging rollups
Liquidity source
Data Availability:
But how do rollups validate transactions and record them to the blockchain? And how does the modular stack improve this?
Through the use of light nodes (light clients).
Light nodes in a rollup architecture are clients that have a limited view of the blockchain and do not store a full copy of the blockchain data. Instead, they rely on a full node, also known as an archive node, to provide them with the necessary information.
The use of light nodes enables rollups to scale efficiently, as light nodes can operate with minimal computational and storage resources, allowing for a much larger number of nodes to participate in the network.
However, light nodes in a rollup can run into data availability issues if they are unable to communicate with the full node. In these scenarios, the light node may not be able to retrieve the latest state of the blockchain or confirm the validity of transactions. Light nodes are also vulnerable to malicious full nodes that may provide them with false information or censor certain transactions.
This leads us to Data Availability Sampling (DAS).
Data Availability Sampling:
Data availability sampling is a method used by light nodes in a rollup to verify the information provided by the full node. It involves the light node randomly sampling a small subset of the data stored by the full node, and checking this against its own records to ensure the information is accurate.
This method allows the light node to confirm the validity of the information provided by the full node without having to retrieve and store the entire blockchain data. By randomly sampling the data, the light node can ensure that it is receiving an accurate representation of the state of the blockchain.
The Celestia team highlights this:
“As a light node completes more rounds of sampling for block data, it increases its confidence that data is available. Once the light node successfully reaches a predetermined confidence level (e.g. 99%) it will consider the block data as available.”
https://celestia.org/glossary/data-availability-sampling/
Celestia
Celestia is the first modular blockchain network designed on these fundamentals we covered. The consensus, data layers, and execution layers are decoupled, allowing for greater flexibility and customization of the key blockchain components.
The use of Celestia as a consensus and data availability layer are not limited to only EVM, but available to all blockchains and rollups. Eclipse is working on bringing customizable rollups built on the Solana Virtual Machine to Celestia.
Concluding Thoughts:
Future of blockchain: modular stack, rollups, cross chain interoperability
The future of blockchain is multichain, and modularity expounds on the execution of this concept. The key advantages of modular blockchains are their ability to provide interchangeable components of the blockchain, allowing for increased efficiency and unique customization not bound to the structure of a monolithic design. This customization provides priority to the components that best meets the needs of the blockchain/ rollup.
We are already witnessing the adoption of the modular model, even in existing monolithic chains such as Ethereum through the use of optimistic and zk rollups. And assuming how fast things move in the crypto space, I expect a future in blockchain with modularity.