The blockchains on the current ecosystem all play similar roles when it comes to ensuring the consensus and security of data, as well as performing transactions. Many older generation blockchain projects still have the operating mechanism of Monolithic blockchain, when operating the system based on only 1 layer.
Recently, the popularity of Modular blockchains is increasing and is being received very well. These blockchains are often focused on performing specific tasks and passing the rest on to other layers. This gradually innovates the way we understand chain .
But for whatever reason many believe, Modular blockchain is likely to become a “key” direction for blockchains in the future.
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What is monolithic blockchain?
Most blockchains perform all of these functions on the same layer (also known as the Monolithic blockchain), typically Bitcoin . Performing many operations using only a single layer can be the cause of frequent bottlenecks on the system.
A monolithic blockchain will optimize its consensus, block space, and execution according to the goals it meets. All these layers of operations are performed on a single layer.
Good examples of projects that are Monolithic blockchain are Solana , Aptos , Cosmos , Sui ... and most recently Sei .
Specifically, the Monolithic blockchain is responsible for 4 different operations: Execution, Data availability, Settlement and Consensus .
Execution
This is how nodes process transactions by allowing users to perform common operations such as Stake, swap, trade, etc.
Data availability
This is where it ensures that transaction data is published and available so that anyone can easily calculate state and check state transitions.
Consensus
Consensus determines how transactions are arranged and how new blocks are added to the chain. And with PoS (Proof of Stake), it plays an important role in supporting the modularity of the blockchain since users need to use the asset to ensure the consensus and development of the network. This makes participating in network consensus easier and facilitates greater diversification and centralization in transaction verification.
Settlement
The main function of Settlement is to resolve transaction validation chain requirements and handle disputes.
What is modular blockchain?
Modular blockchains help to break the work into 4 parts instead of doing them all at once on L1. This approach contributes to the optimization of the system by reducing the burden on the transaction validation process, and thereby increasing the performance of the chain exponentially.
If the 4 classes of Execution, Settlement, Consensus and Data Availability are embraced by one "person" who is Monolithic, then Modular divides this work among 4 other "people" to take on its own processing role.
A Monolithic blockchain will face the “impossible triangle” in the Blockchain, referring to the trio of characteristics that a Blockchain is trying to achieve, but can only achieve two of them. Those three characteristics are: Scalability, decentralization, and security, which means that these chain need to choose to sacrifice scalability to maintain decentralization and security.
Whereas with Modular blockchain, projects will perform separate tasks to ensure separate roles. Thanks to that, projects can simultaneously ensure all 3 factors.
Specifically:
- Scalability can be guaranteed since transactions are processed outside of the Ethereum Off-Chain (Optimism)
- Then the consensus (Consensus) and the ability to resolve the dispute (Settlement) are sent to Ethereum, to achieve decentralization while still having good security.
- Next, it leverages data availability from Polygon Avail.
=> Each network is trying to solve the Trilemma blockchain together by playing its own role.
It can be said that Modular blockchain seems to be gradually becoming the trend of the future.
Why is Modular blockchain the “future”?
Scalability is especially important for a protocol, allowing it to handle more transactions while maintaining accuracy and security.
Multi- Layer 1 blockchains in particular are experiencing transaction issues, high Gas Price , and optimization issues, and the way to ensure project scale is to leverage native components. take on specific roles. Rollup is the most optimal way to get out of the shadow of L1s, thereby greatly helping with the goal of scaling and reducing the load on the main chain.
If you want to grow quickly and attract a large number of users, you need strong expansion but still be able to ensure security, which is what Layer 2 projects are currently aiming for. Any one of these projects in the top of the top L2 projects applies Modular blockchain like Arbitrum, Optimism, or zkSync .
However, Modular blockchain is still relatively new and there are not many projects applying a complete conversion to Modular Blockchain.
Meanwhile, the Monolithic blockchain with built-in security is often used by high-value DeFi protocols, and projects that require faster and cheaper operations (e.g. high-frequency transactions) can be more in line with modular chain , which many Layer 2 are now adopting.
Some typical Modular blockchains
Ethereum 2.0
As an early blockchain, Ethereum was designed to use the Monolithic model. But in the face of the need for scalability and sustainability, this chain has conducted a large Fork to upgrade to Ethereum 2.0, thereby converting from Proof of Work to Proof of Stake, while taking advantage of How Modular blockchain works. Here's how this blockchain works:
Sharding is an important principle in scaling the blockchain without losing its decentralization. By dividing the data layer into smaller networks, validators will be spread out and verify transactions on- chain. This helps to optimize on- chain storage space and increase the overall performance of the network.
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When sharding is combined with rollup, the scaling performance increases significantly. This allows more transactions per second to be processed and enhances the overall throughput of the chain .
Sharding has great potential and could play a pivotal role in the development of blockchains in the future. As Vitalik Buterin said in his blog , Sharding is the future of scalability in Ethereum and it will be the key to helping the ecosystem support thousands of transactions per second and enable the majority of the world to regularly use it. this platform with low cost.
Since security also needs to be maintained, Ethereum also uses Rollup on sidechains as a way to reduce congestion, while remaining scalable.
Before building to become a PoS protocol, Ethereum with PoW has long used a single tier to embrace the entire operating process. Under the current trend of expansion, the strongest ecosystem in the crypto market has gradually transformed from Monolithic to Modular blockchain.
Celestia
Celestia is an example of a modular blockchain that provides other functionalities that rollups depend on, like Consensus and Data availability.
This is also considered the leading project in developing an ecosystem of Modular blockchains.
Polygon Avail
Besides Celestia and EigenLayer , Polygon Avail also serves Data Availability layer processing.
Polygon Avail uses a method of storing transaction data by building a new blockchain just for data availability.
Arbitrum & Optimism
The two Layer 2 projects mentioned above are typical examples of Modular blockchain.
These protocols use Rollup as a way to increase scalability and increase transaction efficiency while having very low transaction costs. This is because the workload is done Off-Chain before being bundled up for the main chain.
Read more: What is Arbitrum?
Read more: What is Optimism ?
Besides Arbitrum and Optimism, you can learn a few other outstanding projects of Modular blockchain such as Neon EVM , Metis , Taiko or Scroll .
summary
Monolithic blockchain and Modular blockchain represent two important approaches in the blockchain world. Monolithic blockchains, like Bitcoin, perform all functions on a single tier, however, this can lead to bottlenecks and limit scalability.
Modular blockchain, on the other hand, divides the work into 4 separate parts to optimize performance. This helps to solve the impossible triangle problem in blockchain, allowing both scalability, decentralization, and security to exist simultaneously. Examples such as Ethereum 2.0, Celestia, Polygon Avail, Arbitrum and Optimism have been at the forefront of adopting Modular blockchain to enhance performance while ensuring security.
With important scalability to attract more users and optimize blockchain operations, Modular blockchain seems to be the future of this technology industry. However, Monolithic blockchain still has a role in some special applications and requires high speed and security. Choosing between these two methods depends on the specific goals of each project in the diverse and evolving world of blockchain.
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