The definitive guide to the modular blockchain stack

The following is a guest article from Erick de Moura, co-founder at Cartesi.

Despite over a decade of evolution, traditional blockchains continue to grapple with the proverbial ‘blockchain trilemma’, balancing decentralization, security, and scalability. The bigger a blockchain gets – the more users, the more dApps, the more activity and transactions – the greater the demand on the underlying infrastructure.

As adoption increases, the network’s ability to handle rising demand decreases. The result: congestion on the network, hiking gas fees, and processing delays – none of which paint a picture of the better internet we were promised.

While those of us working in the blockchain space are clear on the value and potential of web3, we have yet to collectively agree on the optimal way to design it. Countless solutions have been proposed, but few have taken root.

However, in the last 12 months, we’ve seen the blockchain space trending more and more toward a new paradigm: modularity. Whereas monolithic chains – such as early Ethereum or Solana – are built with a predefined set of design and infrastructure choices, modular infrastructure separates the crucial blockchain functions into separate modules that can be composed together to build even more powerful applications.

This article explores how modularity represents not just a technical upgrade but a strategic rethinking of blockchain infrastructure, promising a more robust framework for future applications.

Exploring the Modularity Thesis 

Ethereum’s move towards a rollup-centric roadmap was arguably the first major shift towards a modular framework by outsourcing execution to layer 2s like zkSync and Optimism. It was an admission that a monolithic blockchain simply couldn’t optimize every layer of its operations, past a certain threshold, leading to a major decoupling of a critical operation away from the main chain.

However, using layer 2s (whose primary purpose is to offload a layer 1’s transactions) to expand a blockchain’s computational capacity only takes us so much farther. It displaces the traffic but does not remove it entirely.

Imagine a ferry overloaded with too many passengers, putting it at risk of capsizing. You could move a number of passengers onto a tug boat attached to the greater vessel to lighten the load, but it doesn’t do much to fix the problem at the core.

Blockchain modularity essentially expands on this idea. The thesis proposes that instead of a single blockchain handling all aspects of operations – with current major focus areas being execution, settlement, data availability, and consensus – these functions should be fully separated into differentiated, specialized layers that can function independently. And when composed together, they can serve an even greater variety of operations.

Modularity may have only emerged as the mot-du-jour within blockchain in the past 12 months, but some modular solutions have already been under development for years. Its guiding ethos is to divide, conquer, and (most critically) collaborate. In order to work, these layers must be able to stack back together, in flexible configurations.

The Developer’s Challenge 

While that is happening at the infrastructure level, the developers responsible for actually building on-chain dApps face a separate set of challenges. The reality is that onramps for developers are steeper than many realize. New coding languages and unfamiliar building environments are just two of the significant hurdles that developers face when designing and deploying dApps.

The larger constraint is the framework imposed by the blockchain a developer chooses to build on; it’s a one-size-fits-all solution. Everything runs under the same circumstances, subjected to the same gas price fluctuations, and the same performance limitations. Reproducibility and scalability concerns have made on-chain computation environments very restrictive.

A DeFi developer has a totally different set of requirements to build their dApp than a game developer. Where one might prioritize security, the other may focus more on speed. They would each need to seek a blockchain with the perfect balance between scale, security, speed, and every other dimension critical to their application. There are inherent trade-offs and compromises that must be navigated in this selection process.

This limits the parameters and the design space in which a developer can build. It hinders complex dApp development and stifles innovation.

Modularity removes this hurdle. It instead enables developers to compose the optimal blockchain stack. They can integrate different modular protocols at every layer, to suit the specific needs of the application they’re developing.

Execution: The Developer’s Gateway 

The execution layer is the easiest gateway for developers to begin experimenting and building within a modular framework. As the technology advances, it must become easier and more convenient for developers to build and deploy dApps on-chain. Designing tools and platforms that deliver this ease of use is critical if this framework is to be widely adopted amongst developers.

Familiar tooling into new coding environments that are tried, tested, and trusted, can help to free developers from the limitations and idiosyncrasies imposed by blockchains, namely the absence of productive and stable development environments. 

Alternative virtual machines (alt-VMs) introduce a diversity of operating systems into blockchain infrastructure that may better provide the necessary conditions to build complex, scalable applications. It enables a richer, more versatile development environment that previously did not exist on-chain – a major leap in blockchain advancement. 

Rollups also function to allow developers to build and operate their own rollup chain or “app chain.” Just like an app having a dedicated server, app chains can inoculate dApps built atop them from the computational demands of the broader network, leading to a smoother and more efficient experience.

Through the execution layer, developers can better build and deploy dApps with as minimal friction as possible. Effective solutions should be convenient, and abstract away many of the complexities faced by most blockchain developers today.

The benefits here are multifold. The modular framework introduces greater customizability and grants developers flexibility and choice when building their dApp. Computations are blockchain agnostic, making dApps more portable and interoperable across chains. And with the right execution layer, developers can build in an environment that is familiar, secure, and robust.

The Modular Map: Building the Optimal Stack 

While powerful, our solution is still one module or one tile in a much greater mosaic. Modularity is a collaborative effort, where every solution plays an important role; a stark contrast from the zero-sum competitive landscape many of us are accustomed to within the blockchain space.

The modular movement has spurred significantly more innovation and experimentation. By decoupling each layer of the blockchain stack, teams have dedicated themselves to providing hyper-focused solutions at the infrastructural level, enabling greater versatility at the application level – all to the eventual benefit of the end user.

Ultimately, interoperability rests at the core of the modular thesis. Real-world applications cannot exist in isolation. They depend on rich, complex run-time environments that are invariably built on top of a modern operating system… and that is what we have engineered.

At its simplest configuration, a rollup can interact with Ethereum acting as the sole data availability, consensus, and settlement layer. For developers building ambitious applications that require more flexible or custom configurations, a developer can leverage integrations with Celestia and EigenDA for data availability, Espresso Systems for sequencing, and deploying on Ethereum, Optimism, or Arbitrum.

As more protocols integrate at every level of the stack, developers will have even more choices for how they compose the underlying infrastructure of their dApps. As the collaborative ecosystem of protocols and solutions expands, so will the development of more complex, innovative dApps, ready for the end user.

A Future Greater Than the Sum of Its Parts 

Discussing and initiating new modular blockchain projects is admittedly quicker than the actual development and coding required to bring this vision to life. While our solution has developed over the past six years, the modular ecosystem at large is still in its infancy. Over time, modular infrastructure and tools will become increasingly streamlined so that developers can engage with web3 technologies without the steep learning curves and competitive paradigms that currently act as barriers to progress.

It will take time, investment, and sustained effort for every individual piece to come together to create a whole greater than the sum of its parts. Once we get there, we will not only solve the inherent limitations of previous blockchain architectures but we will also set the stage for a more dynamic and collaborative future in blockchain development.

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