The future development of Web3 will be a 'modular blockchain' where there are numerous modules to choose from, but there is potential for blind box risks between different modules. This article explains the current controversies in different functional la

Original Title: "Modular Blockchain: A New Perspective on Functional Layer Controversies and DA Economics"Original Author: Zeke, YBB CapitalOriginal Translation: Luccy, BlockBeats

The impossible triangle of blockchain has always been a barrier that the industry finds difficult to overcome. Many public chain projects have attempted to cross this gap through innovative architecture design in order to become the so-called "Ethereum killer". However, reality is cruel, and for many years, Ethereum's dominant position has remained stable, and the impossible triangle of blockchain still cannot be broken through. So, is there a way for public chains to fill the gap of the impossible triangle? This is exactly the original intention of Mustafa Albasan's proposal of the modular blockchain concept.

Modular Origins

The concept of modular blockchain originated from two whitepapers. The first one was co-authored by Mustafa Albasan and Vitalik in 2018, titled "Data Availability Sampling and Fraud Proofs". This paper explains how to solve the scalability problem of blockchain while maintaining security and decentralization. The specific method is to allow lightweight clients to receive and verify fraud evidence from full nodes, while designing a data availability proof system to reduce the trade-off between on-chain capacity and security.

Later in 2019, Mustafa Albasan wrote a whitepaper about Lazy Ledger, which detailed an innovative architecture. In this architecture, the blockchain is only used to sort and ensure the availability of transaction data, and is not responsible for executing and verifying transactions. This architecture aims to solve the scalability issues of existing blockchain systems. At the time, he referred to it as the "smart contract client".

Smart contracts are executed through Celestia (the first modular blockchain) on another execution layer on this client. Subsequently, the emergence of Rollup made this concept more clear. Because Rollup logic executes smart contracts off-chain and aggregates the results into proofs, which are then uploaded to the "client" execution layer.

Through in-depth thinking about blockchain architecture and new extension technologies, he has defined a new paradigm called "modular blockchain".

What is modular blockchain?

Traditional monolithic blockchain architecture usually consists of the following four functional layers:

Execution Layer: This layer is mainly responsible for processing transactions and executing smart contracts, including transaction verification, execution, and state updates.

Data Availability Layer: In modular blockchain, the data availability layer ensures that data in the network can be accessed and verified. This layer typically includes functions such as data storage, transmission, and verification to ensure transparency and trust in the blockchain network.

Consensus Layer: This layer is responsible for the protocol between nodes, achieving consistency in data and transactions within the network. Transactions are verified and new blocks are created through specific consensus algorithms such as Proof of Work (PoW) or Proof of Stake (PoS).

Settlement Layer: This layer is responsible for completing the final settlement of transactions, ensuring the transfer of assets and permanent recording on the blockchain, and determining the final state of the blockchain.

Single-chain blockchain integrates these components into the same system, and this highly integrated design often leads to inherent problems such as poor scalability, poor flexibility, and difficulty in maintenance and updates.

However, Celestia believes that individual blockchain no longer needs to bear all tasks alone. The future development of Web3 will be "modular blockchain", which modularizes the blockchain and divides its processes into multiple "proprietary layers", each of which handles specific functional layers, thus building a better system. In addition, these systems should be independent, secure, and scalable.

Modular Design Principles

If the system is designed to be composed of smaller components that can be separated, replaced, or substituted, then this design has modular characteristics. The core idea is to focus on doing specific things well (part or single functional layer), rather than trying to cover all aspects. Cosmos Zones, Polkadot parallel chains, and other modular projects are examples of what we are familiar with in the past.

新视角

translates to

New Perspective

in English.

From a modular perspective, the redesign space of single-blockchain and its related modular stack will be greatly expanded. Various modular blockchains with different specific purposes and architectures can be combined to achieve collaborative work, and the diversity of design possibilities has spawned many interesting and creative projects. Next, we will explore the current controversy about different functional layers and how Celestia interprets "modularity" from a modular perspective.

Execution Layer Centered on Ethereum

If we view Rollup as a modular execution layer, we will find that most modular execution layer projects are built on top of Ethereum. Obviously, this is because Ethereum has rich resources to serve as a moat, and its degree of decentralization is the best choice. However, its scalability is relatively poor, so the redesign of the functional layer has huge potential.

By comparing the dismal performance of the recently launched Move system language public chains (APT, SUI) and the unprecedented hype of Layer2 on Ethereum, we can see that the narrative of blockchain infrastructure has shifted from developing public chains to developing Ethereum Layer2. So, is the existence of modularity good or bad? Will the Ethereum-centric execution layer stifle innovation in public chains?

Blockchain Scaling View

Firstly, from the perspective of the execution layer, the existing chains are reclassified. Here, we refer to Nosleepjon's article "Tatooine's Double Sun" to explain the current classification of the execution layer in blockchain.

Currently, blockchain can be divided into the following four categories:

Single-threaded single-body blockchain: This type of blockchain processes only one transaction at a time. Due to its performance limitations, many projects have turned to Rollup or horizontal scaling solutions. Representative projects include Ethereum, Polygon, Binance Chain, and Avalanche.

Parallel processing single-chain blockchain: This type of blockchain can process multiple transactions simultaneously. Representative projects include: Solana, Monad, Aptos, and Sui.

Single-threaded modular blockchain: This modular blockchain processes one transaction at a time. Representative projects include: Arbitrum, Optimism, zkSync, and Starknet.

Parallel Processing Modular Blockchain: This type of modular blockchain can process multiple transactions simultaneously. Representative projects include: Eclipse and Fuel.

Single-Cell Parallel Processing Architecture and Modular Architecture

Celestia

DAS: This solution allows light nodes to verify the availability of block data without downloading the entire block. Light nodes only need to sample a portion of the block data (specific implementation depends on 2D Reed-Solomon encoding, see below for details). Unlike Dac mentioned earlier, DAS does not rely on the security of trusted entities; as long as the chain is decentralized enough, the data can be trusted.

2D Reed-Solomon Encoding (Erasure Coding): The core idea of 2D Reed-Solomon Encoding is to apply Reed-Solomon Encoding separately on rows and columns. This way, even if some rows and columns of the two-dimensional data have errors, they can still be corrected. By encoding the block data, the block data is divided into k blocks, arranged into a k matrix, and extended to a 2k2k extended matrix through multiple Reed-Solomon encodings. Calculate the 4k independent Merkle roots of the rows and columns of the extended matrix, which are used as block data commitments in batches.

Celestia light nodes sample 2k2k data blocks. Each light node randomly selects a unique set of coordinates in the expansion matrix and queries the full node for data blocks related to these coordinates and corresponding Merkle proofs. Each data block that receives a correct Merkle proof will be broadcasted to the network.

Abstractly speaking, block data can be divided into matrices (e.g. 8x8) and additional "check" rows and columns can be added to the original data through encoding to form a larger matrix (e.g. 16x16). By randomly sampling and verifying the accuracy of some of the data in this large matrix, the integrity and availability of the overall data can be ensured, even if some of the data is lost or damaged, the entire data can still be recovered using the checksum data.

Block Scaling: Celestia implements the function of scaling with the increase of light nodes. As long as there are enough nodes in the network to sample the entire block, Celestia can maintain security. This means that as more nodes join the network for sampling, the block size can increase accordingly without sacrificing security or decentralization. However, in traditional monolithic blockchains, increasing block size may sacrifice decentralization because larger block sizes increase hardware requirements for node download and data verification.

Sovereign Rollup: This is a concept first proposed by Celestia, which combines various blockchain design elements, including Layer1 blockchain, rollup, and Mastercoin in the early Bitcoin network. The main difference between Sovereign Rollup and smart contract Rollup (such as Optimism, Arbitrum, zkSync, etc.) lies in the way transactions are verified. In smart contract Rollup, transactions are verified by smart contracts deployed on Ethereum. In Sovereign Rollup, Rollup nodes themselves are responsible for verifying transactions.

The Sovereign Rollup publishes its transactions to other blockchains (such as Celestia) for sorting and data availability processing. Then, the nodes of the Sovereign Rollup confirm the correct chain. This design allows the Sovereign Rollup to inherit multiple security attributes from the DA layer, including liveliness, security, resistance to reorganization, and resistance to censorship.

For the Rollup smart contract, the upgrade depends on the smart contract of the settlement layer. To upgrade Rollup, the smart contract needs to be modified. This may require multiple signatures to control who can initiate the update of the smart contract. Although it is common for the team to control the multi-signature upgrade, it is also feasible to control the multi-signature through governance. Since the smart contract is located in the settlement layer, it is subject to the social consensus of the settlement layer.

Sovereign Rollup upgrades through forks similar to Layer 1 blockchains. After releasing a new software version, nodes can choose to update their software to the latest version. If nodes do not agree to the upgrade, they can continue to use the old software. This option allows people running nodes in the community to decide whether or not to accept the new changes, even if most nodes have upgraded, they cannot force them to accept the upgrade. This feature makes Sovereign Rollup a true "sovereign" Rollup.

Quantum Gravity Bridge (QGB) is a key component of the Celestia ecosystem, serving as a bridge between Celestia and Ethereum (or other EVM L1 chains) to enable data and asset transfer between the two networks. By introducing the concept of Celestium (EVM L2 Rollup) and utilizing Celestia for data availability, Ethereum is chosen as the settlement layer.

This achieves the full utilization of the advantages of two networks, namely Celestia's scalability and data availability, as well as Ethereum's security and decentralization features. Validators on Celestia can run QGB, enabling Celestium to provide strong data availability guarantees for block data at a cost that is only a small fraction of Ethereum's calldata.

QGB is a key component in realizing the vision of an extensible, secure, and decentralized blockchain ecosystem for Celestia. It promotes the interoperability needed for the future of blockchain technology. Currently, the project is researching Zk QGB to further reduce the gas cost of verification.

DA Economics

Let's talk about the economic value of DA in the future.

This assumption was proposed by Jon Charbonneau, a researcher at Delphi, based on Polygon Hermez's prediction that each transaction in Danksharding would ultimately only require 14 bytes. According to the EIP-4844 specification mentioned above, Layer2 can achieve approximately 100,000 TPS at 1.3 MB/s, with expected revenue reaching a staggering $30 billion.

Driven by such huge interests, the future competition in the DA market will be extremely fierce. In addition to the three major solutions, Stark's Layer3, zkPorter, and other modular DA projects will also join the battle. Therefore, from the existing Layer2 projects, the general chain is more inclined to use Ethereum DA, while application chains and long-tail chains will become the main customers of "non-traditional DA". Personally, I believe that modular DA and rapidly developing Layer3 will be the mainstream choice in the future.

Conclusion