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### Exploring Modular Blockchain: Redefining Blockchain Architecture
To grasp the concept of Modular Blockchain, we first delve into the idea of Monolithic Blockchain. Monolithic chains like Bitcoin and Ethereum are renowned for their comprehensive nature, independently managing all aspects of the network from data storage and transaction validation to smart contract execution. They play the role of a versatile generalist, handling various functionalities across the board.
Take Ethereum, for instance, where a mature monolithic blockchain typically divides into four primary architectures. Visualizing blockchain accounting akin to a sports game helps explain each layer’s role:
This analogy clarifies how different blockchain architectures collaborate. Monolithic blockchains consolidate all functions into a single chain, whereas Modular Blockchain introduces a novel architecture. It decomposes the blockchain system into specialized components or layers, each responsible for distinct tasks such as consensus, data availability, execution, and settlement.
Modular Blockchain operates like a team of specialists, deeply exploring and innovating within their respective domains. This focus allows modular blockchains to excel in specific functions, offering superior performance and user experiences at lower costs, particularly in transaction processing speed.
In terms of node architecture, monolithic chains rely on full nodes, which must download and process complete copies of the blockchain data. This not only demands substantial storage and computing resources but also limits network scalability. In contrast, Modular Blockchain adopts a lightweight node design, processing only block header information, significantly enhancing transaction speeds and network efficiency.
A notable advantage of Modular Blockchain lies in its flexibility and collaborative potential. By outsourcing non-core functions to other specialists, it fosters synergy, substantially boosting overall performance. This design philosophy resembles LEGO bricks, allowing developers to freely combine modules to create diverse solutions tailored to project needs.
While monolithic chains excel in global control, security, and stability, they face challenges in scalability, upgrade difficulty, and adapting to new demands. Modular Blockchain, with its flexibility and customization, simplifies the creation and optimization of new blockchain networks.
However, Modular Blockchain also faces unique challenges. Its complex architecture increases developer workload in design, development, and maintenance. As an emerging technology, Modular Blockchain requires comprehensive security testing and market fluctuations to validate its long-term stability and safety.
### Why Modular Blockchain is Needed
The rise of Modular Blockchain technology and its projection as a future trend stems from the famous “Blockchain Trilemma”. This trilemma posits that achieving optimal states in security, decentralization, and scalability simultaneously is exceedingly challenging for blockchain networks.
Scalability focuses on a network’s ability to handle a large volume of transactions efficiently and at low cost as user and transaction volumes grow, typically measured by TPS (Transactions Per Second) and latency (time required for transaction confirmation).
Security involves the cost and difficulty of protecting blockchain networks from attacks. For instance, Bitcoin’s Proof of Work (PoW) mechanism requires attackers to control over 51% of the network’s computing power, while Ethereum’s Proof of Stake (PoS) requires collusion of over one-third of nodes.
Decentralization describes a network’s operation without reliance on a single central node, instead distributing across numerous nodes. The higher the number and geographical spread of nodes, the greater the network’s decentralization.
The core premise of the “Blockchain Trilemma” is that achieving optimization across these three properties simultaneously is highly challenging. For example, while Bitcoin and Ethereum excel in decentralization and security due to widespread node distribution, they sacrifice scalability, resulting in slower transaction speeds and higher costs during transaction surges.
Modular Blockchain technology addresses these challenges by assigning different functionalities to specialized modules, resolving scalability and transaction cost issues inherent in traditional public chains. Examples include Bitcoin’s Lightning Network and Ethereum’s Rollup technology, both embodying modular principles.
The layered architecture of Modular Blockchain allows optimization of each layer to meet specific needs. The data layer can focus on storage and verification, while the execution layer handles smart contract logic. This separation not only enhances performance and efficiency but also promotes interoperability among different blockchains, laying the groundwork for an open and interconnected ecosystem.
In summary, Modular Blockchain technology offers a new approach to overcoming limitations of traditional public chains. By maintaining decentralization and security while achieving greater scalability and lower transaction costs, it holds profound implications for the widespread application and long-term development of blockchain technology.
### Analysis of Modular Blockchain Projects
#### Execution Layer
Modular Blockchain can be categorized into different types based on its architectural characteristics. Among these, the data availability layer and consensus layer are often designed as a unified whole due to their close interdependence. When nodes receive transaction data, they typically also determine the transaction order, essential for blockchain security and immutability.
Following this design principle, Modular Blockchain projects can be understood from three aspects: the execution layer, data availability layer, consensus layer, and settlement layer.
Layer 2 technology, an extension of the execution layer in blockchain architecture, embodies the concept of Modular Blockchain. By constructing off-chain networks, systems, or technologies atop the underlying blockchain, Layer 2 solutions aim to enhance the scalability of the main chain.
Layer 2 solutions enable faster and more cost-effective transaction processing while maintaining the security and decentralization of the underlying blockchain. According to a dashboard by @0x ning on Dune, gas consumption for Layer 2 verification and settlement within the Ethereum ecosystem averages less than 10%, significantly reducing transaction costs for users.
Rollup technology currently represents the most mainstream Layer 2 solution. Its core principle of “off-chain execution, on-chain verification” involves executing computations off-chain and then uploading calldata back to the main network.
Off-chain execution in the Rollup model significantly reduces the computational burden on the main chain, lowers storage requirements, and allows more efficient transaction processing. To further reduce costs, Rollup adopts transaction batching techniques, analogous to consolidating shipments in logistics to minimize per-transaction costs.
On-chain verification is crucial for the security of Layer 2 networks. Layer 2 networks must provide cryptographic proofs to resolve potential disputes on the underlying blockchain. Currently, two mainstream proof mechanisms are Fraud Proofs for Optimistic Rollups and Validity Proofs for ZK Rollups.
Optimistic Rollups employ an optimistic assumption that all transactions are valid unless there is explicit evidence of error. This model relies on fraud proofs during challenge periods, allowing any network participant to submit proofs challenging the state of smart contracts, ensuring fairness and transparency.
According to L2 BEAT data, there are currently 16 Layer 2 networks employing Optimistic Rollup mechanisms, including Arbitrum, OP, Base, and Blast.
ZK Rollups, in contrast, adopt a more cautious approach requiring validity proofs for all transactions before acceptance. This proof mechanism resembles a validation process ensuring the accuracy of every transaction and computation within the Layer 2 network.
According to L2 BEAT data, there are currently 11 Layer 2 networks employing ZK Rollup mechanisms, including Linea, Starknet, and zkSync.
#### Celestia
Celestia, a pioneer in the Modular Blockchain domain, serves as a data availability layer, providing a robust foundation for dApps and Rollup development. By deploying on Celestia’s data availability and consensus layers, application developers can focus on optimizing execution logic while leaving data availability and consensus mechanism complexities to Celestia.
Celestia’s architectural design offers diverse solutions for modular expansion, encompassing three main types:
– Sovereign Rollup: Celestia provides the data availability and consensus layers, while settlement and execution layers are independently implemented by respective sovereign chains.
– Settlement Rollup (e.g., Cevmos project): Built on Celestia’s DA and consensus layers, Cevmos offers settlement layer services, with application chains handling the execution layer.
– Celestium: The data availability layer is managed by Celestia, leveraging Ethereum’s robust network for the consensus and settlement layers, allowing application chains to focus solely on the execution layer.
Celestia integrates several innovative technologies to significantly reduce data storage costs and optimize storage efficiency.
Erasure Coding: One of Celestia’s innovations is the application of Erasure Codes. In a paper co-authored by Mustafa Albasan, one of Celestia’s founders, and Vitalik Buterin titled “Data Availability Sampling and Fraud Proofs”, a new architectural concept is proposed where full nodes handle block production while light nodes verify blocks. Erasure Coding introduces redundancy during data transmission, ensuring complete data recovery even with up to 50% data loss.
This mechanism means block producers only need to publish 50% of block data to the network to ensure 100% data availability. Attempting to tamper with 1% of block data would require altering the entire 50% dataset, significantly increasing the cost for malicious actors.
Data Availability Sampling (DAS): Celestia addresses blockchain scalability issues by introducing Data Availability Sampling (DAS) technology. The workflow involves:
– Random Sampling: Light nodes perform multiple rounds of random sampling on block data, requesting only a small portion of block data each time.
– Confidence Increment: With each round of sampling completed by light nodes, their confidence in data availability gradually increases.
– Threshold Confidence: Once the light nodes achieve a preset confidence level (e.g., 99%), they consider the block data available.
This mechanism allows light nodes to verify block data availability without downloading the entire block data, ensuring the integrity and availability of blockchain data. Celestia’s focus on providing data availability rather than execution state enhances block production rates, increasing block capacity to accommodate more sampling data and significantly boosting TPS (Transactions Per Second).
#### EigenDA
EigenDA is a secure, high-throughput, decentralized data availability service, serving as the first Active Verification Service (AVS) launched on EigenLayer. AVS can be understood as node operators among thousands on the Ethereum network, earning additional income by serving consensus-verified rollup networks alongside their primary role of Ethereum consensus verification.
With an increasing amount of re-stThe article discusses several modular blockchain projects and their impact on the Ethereum and Bitcoin ecosystems. It highlights the importance of modularity in building decentralized applications and explores the possibilities and methods of constructing Layer 2 solutions for Bitcoin.
The first project mentioned is EigenDA, which aims to provide data availability (DA) services for the Ethereum mainnet. It uses ZK technology to validate Layer 2 state data and relies on Restaking ETH for consensus security. EigenDA enhances Ethereum’s trust network and increases its value and influence.
Avail, another modular blockchain project, recently split from Polygon and operates as an independent entity. It consists of Avail DA, Avail Nexus, and Avail Fusion. Avail DA provides modular data availability services similar to Celestia. Avail Nexus is a standardized cross-chain messaging protocol, and Avail Fusion introduces multi-asset staking for POS consensus.
Dymension is a modular blockchain platform based on Cosmos. It offers a concise framework for RollApp development through its built-in scalability aggregation technology. Dymension includes RollApp and Dymension Hub. RollApp is a high-performance modular blockchain for specific applications, and Dymension Hub serves as the consensus and settlement layer.
Cevmos aims to provide a settlement layer for EVM-compatible rollups. It builds on the concept of modularity and allows for the deployment of existing rollups on the Bitcoin network. Cevmos itself is a rollup, and all rollups built on it are referred to as settlement rollups.
The article also discusses the modularization of the Bitcoin ecosystem. With the introduction of the Ordinals protocol and the approval of Bitcoin ETFs, the Bitcoin ecosystem has gained new vitality. Layer 2 technologies for Bitcoin are flourishing, and various technical solutions are emerging to expand and optimize the network.
Merlin Chain is highlighted as the most prominent project in the Bitcoin Layer 2 space, with a TVL of billions of dollars. It combines ZK-Rollups, decentralized oracle networks, and on-chain fraud prevention. ZK-Rollups use zero-knowledge proofs to process and compress transactions off-chain, reducing transaction fees and improving efficiency. The decentralized oracle network ensures the accurate and timely publication of data, and on-chain fraud prevention mechanisms protect the network from malicious actors.
B2 Network is another modular design that consists of a ZK-Rollup layer, a data availability layer (B2 Hub), and B2 Nodes for off-chain verification. The settlement layer is the Bitcoin mainnet. B2 Hub is a pioneer in building off-chain decentralized applications and supports data sampling and erasure coding to ensure efficient and secure data distribution.
The article concludes by emphasizing the importance of modularity in blockchain technology. It allows developers to select and combine different modules to create efficient and secure blockchain solutions tailored to specific needs. Modularity has already proven successful in the Ethereum ecosystem and is now making its way into the Bitcoin ecosystem, fueling innovation and expanding the capabilities of blockchain technology.