Why Do We Need Modular Blockchains For Scalability?
In this article, I would be explaining :
- What is a monolithic blockchain
- What are the different layers in a blockchain
- What is a modular blockchain and how is it different from a monolithic blockchain
- What are the benefits of a modular blockchain?
This article is highly based off the talk by Mustafa Al-Bassam, Co-founder & CEO of Celestia Labs in Modular Summit 2022 and I highly recommend you to go and check that out here.
What is a monolithic blockchain?
Monolithic Blockchains are a form of blockchain architecture that aims to do everything from execution, consensus, and data availability in the blockchain (layers will be explained more in the next section).
This means that all full nodes and validators do consensus and execute on the chain.
For example, both bitcoin and Ethereum are monolithic blockchains. Except that Ethereum replaced the execution layer of bitcoin with a general-purpose smart contract environment known as the Ethereum virtual machine
The problem
The problem is that full nodes that validate the chain have to :
- Checking for consensus
- Checking if the transaction is valid
Therefore Monolithic blockchains do not scale well. Especially if full nodes have to execute the entire state and history of the network.
What is a modular blockchain?
A blockchain that fully outsources at least one of its components to an external chain.
Modularity : the use of individually distinct functional units, as in assembling a system. In the case of blockchains, it would be splitting the core functions of a blockchain to different applications can be swapped easily.
For example, imagine the typical layer 2 on Ethereum.
Layer 1 on Ethereum is used for data availability and consensus.
Layer 2 such as Polygon uses different rollup mechanisms to perform Off-chain computations before sending the data back to Layer 1.
What is NOT a modular blockchain
- a blockchain that handles all components but has a modular software design
- a network of blockchains where each blockchain handles all components (e.g subnets for Avalanche as each chain in the subnets handles all the layers)
In essence, the modular design of blockchain allows for different technologies to fulfill components of the underlying blockchain which they are most suited for.
Layers of a modular blockchain
Consensus /Settlement Layer: Taking arbitrary messages (transactions) and providing an ordering to those messages
This provides security and agreement for transactions and their ordering.
Data Availability Layer: A verifiable way to publish the ordered messages to the network.
This ensures that the transaction data behind the block header is published and available so that anyone can easily calculate the state and check the state transitions.
Execution layer: Takes the messages and then does processing on the messages to output a “state”.
This is the computation required to update the chain. Get the current state, add a bunch of new transactions, and transition to the new state.
For example in the image above, the execution layer of a blockchain takes all the transactions (messages) and processes these transactions to output the balance of users (state).
What do modular stack configurations look like?
Different components in the blockchain are split into modules allowing for the modules to be changed with any chain. The above example shows how Celestia is a modular blockchain.
Why is Modular Blockchain Important?
Scalability
Modularity allows for the separation of resources → more specialization → more efficiency.
Another important component which modular blockchain allows for technologies such as data availability fraud proofs or zk-proofs where nodes do not have to execute all transactions to check validity. This is important for scalability as it enables blockchain to increase throughput while enabling users to gain assurances about the correctness and reliability.
Basically, this allows users to be first-class citizens of the network and have almost the same level of security as a full node downloading all the transactions without needing the same resource requirements as a full node.
First-class citizen : People who run their own node for validation instead of relying on a third party
Flexibility
It allows for rapid experiment across the stack for developers which could lead to better and more specialized decentralized applications. Developers could upgrade different modules in the blockchain based on their needs and future technological advancement.
It allows developers to also borrow the credibility of layer 1 they are using and build a superior computation layer or data consensus layer on top of it e.g Ethereum layer 2 with zksysnc, Starkware, Optimism.
Escaping the L1 Cycle
Blockchains are running into transactions issues, high gas fees issues, and optimization issues, and the way to ensure blockchain scales is to improve the individual components quickly.
Since it is much easier to deploy sovereign rollup than to acquire a decentralized validator network, faster iteration cycles of specialized blockchains to fix different issues in the stack would be possible.
In conclusion, modular blockchains would be a important next step to ensure the scalability of blockchains while still maintaining its decentralised nature. Take a look at Modular Submit for more information
References:
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