What is a modular blockchain?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 6 min
In short
A modular blockchain splits execution, settlement, consensus and data availability into separate layers, each handled by a different system. It is contrasted with a monolithic chain that does everything itself. The freedom to mix components comes with new assumptions and risks at the seams.
Key points
- Splits execution, settlement, consensus and DA into layers
- Contrasted with monolithic chains that do all four
- Each layer can be a separately chosen network
- New risks appear at the seams between layers
Definition
A design philosophy that decomposes a blockchain into execution, settlement, consensus and data availability, and assigns each to a different network or layer.
A chain like Bitcoin executes transactions, agrees on their order, publishes the data and settles them, all by itself — the monolithic approach. Because one system does everything, raising throughput tends to raise node requirements, which pushes participants out. That tension is inherent.
In a modular setup, a rollup can handle execution, Ethereum can verify proofs and resolve disputes, and a separate data availability network can hold the transaction data. Each layer specialises in its own job, which makes them easier to optimise independently.
Splitting things up, though, adds assumptions. Entrusting data availability to an external network means withdrawals can become impossible if that network stops publishing. Different combinations of layers have different safety properties, so 'modular' on its own is not a statement about quality.
Watch out for
- · Safety depends on which layer is delegated where, so each configuration has to be checked on its own
- · Where DA is outsourced, an outage there can directly block withdrawals
- · More layers make incidents harder to diagnose and can lengthen recovery