By GeekCartel

I. Introduction

Modular blockchain is an innovative Blockchain design paradigm that aims to improve the efficiency and scalability of the system through specialization and division of labor. Before the advent of modular blockchains, a single (Monolithic) chain needed to handle all tasks, including the execution layer, data availability layer, consensus layer, and settlement layer. Modular blockchains solve these problems by treating these efforts as freely composable modules, each focusing on a specific function.

Execution layer: responsible for processing and verifying all transactions, as well as managing Blockchain state changes.

Consensus layer: Agree on the order of transactions.

Settlement layer: Used to complete transactions, proof of validation, and bridge between different execution layers.

Data Availability Layer: Responsible for ensuring that all necessary data is available to participants in the network for easy verification.

The trend of modular blockchain is not only a technological change, but also an important strategy to drive the entire Blockchain ecosystem to meet future challenges. GeekCartel will analyze the concept of modular blockchain and related projects, aiming to provide a comprehensive and practical interpretation of modular blockchain knowledge, help readers better understand modular blockchain, and look forward to future development trends. Note: The content of this article does not constitute investment advice.

Second, the pioneer of modular blockchain - Celestia

In 2018, Mustafa Albasan and Vitalik Buterin published a seminal article that provided new ideas for solving the scalability problem of Blockchain. "Data Availability Sampling and Fraud Proof" describes a method by which a Blockchain can automatically scale storage shorts as network nodes increase. In 2019, Mustafa Albasan delved into and wrote "Lazy Ledger", proposing the concept of a Blockchain system that only deals with data availability.

Based on these concepts, Celestia was born as the first data availability (DA) network with a modular structure. Built using CometBFT and the Cosmos SDK, it is a attestation (PoS) Blockchain that effectively improves scalability while maintaining Decentralization features.

The DA layer is critical to the security of any Blockchain because it ensures that anyone can inspect the transaction ledger and verify it. If a block producer proposes a block when not all data is available, the Block can reach finality but contains invalid transactions. Even if a block is valid, Block data that cannot be fully verified will negatively impact the functionality of users and the network.

Celestia implements two key features, data availability sampling (DAS) and named shorter Merkle trees (NMT). DAS enables light nodes to verify data availability without having to download the entire block. NMTs enable Block data to be divided into individually named shorts for different applications, which means that applications only need to download and process the data associated with them, greatly reducing data processing requirements. Importantly, DAS allows Celestia to scale as the number of users (light nodes) increases, without compromising end-user security.

Modular blockchains are making it possible to build new chains like never before, with different types of modular blockchains working together for different purposes and with different architectures. Celestia officially put forward several ideas and examples of modular architecture design, showing us the flexibility and composability of modular blockchain:

Figure 1 Layer 1 and Layer 2 architectures

Layer 1 and Layer 2: What Celestia calls naïve modularity was originally built for the scalability of Ethereum as a monolithic Layer 1, with Layer 2 focused on execution and Layer 1 providing other key features.

• Celestia supports chains built on top of the Arbitrum Orbit, Optimism Stack, and Polygon CDK (coming soon) Chains built on the technology stack use Celestia as the DA layer, and existing Layer 2 can switch its data from publishing to Ethereum to publishing to Celestia using Rollup technology. Block commitments are published on Celestia, which is more scalable than traditional methods of publishing data to a single on-chain.
• Celestia supports RollApp (a chain dedicated to applications) constructed based on Dymension technology components as the execution layer, similar to Ethereum's Layer 1 and Layer 2 concepts, the settlement layer of RollApps relies on Dymension Hub (explained later), the DA layer uses Celestia, and the chain interacts through the Inter-Blockchain Communication (IBC) Protocol (IBC is based on the Cosmos SDK, is a protocol that allows blockchains to communicate with each other. Chains using IBC can share any type of data, as long as it is encoded in bytes).

Figure 2: Execution, Settlement, and DA Layer Architecture

Execution, Settlement, and Data Availability: Optimized modular blockchains, such as the ability to decouple execution, settlement, and data availability layers between specialized modular blockchains.

Figure 3: Execution and DA layer architecture

Execution and DA: Since the purpose of implementing a modular blockchain is to be flexible, the execution layer is not limited to publishing its blocks to the settlement layer. For example, you can create a modular stack that does not involve a settlement layer, but only an execution layer on top of the consensus layer and the data availability layer.

Under this modular stack, the execution layer will be sovereign, which publishes its transactions to another Blockchain, typically for sorting and data availability, but handles its own settlements. In the context of a modular stack, sovereign rollups are responsible for execution and settlement, while the DA layer handles consensus and data availability.

The difference between a sovereign rollup and a smart contracts rollup is:

• Smart contracts Rollup transactions are verified by the smart contracts of the settlement layer. Transactions of sovereign rollups are verified by the nodes of sovereign rollups.
• Nodes of sovereign Rollu have autonomy compared to smart contracts rollups. In a sovereign rollup, the ordering and validity of transactions is managed by the rollup's own network and does not depend on a separate settlement layer.

Currently, Rollkit and Sovereign SDK provide a framework for deploying sovereign rollup testnets on Celestia.

3. Explore modular solutions in the Blockchain ecosystem

1. The execution layer is modular

Before introducing the modularity of the execution layer, we should understand what Rollup technology is.

Currently, the execution layer modularization technology mainly relies on Rollup, a scaling solution that runs outside the Layer 1 chain. This solution executes transactions off-chain, which means it takes up fewer Block short and is one of the Ethereum important scaling options. After the transaction is executed, it will send a batch of transaction data or proof of execution to Layer 1 and Settlement at Layer 1. Rollup technology provides a scalability solution for Layer 1 networks while maintaining decentralization and security.

Figure 4: Rollup technology architecture

In the case of Ethereum, the Rollup technology can further improve performance and privacy by using ZK-Rollup or Optimistic Rollup.

• ZK-Rollup uses zk-SNARKs to verify the correctness of packaged transactions, thus ensuring the security and privacy of transactions.
• The Optimistic Rollup first assumes that the transactions are valid before submitting the transaction status to the Ethereum mainchain, and during the challenge period, anyone can calculate the fraud proof to verify the transaction.

**1.1 Ethereum Layer 2: Building the scaling solution of the future **

Ethereum initially uses sidechain and sharding technology to scale, but the sidechain sacrifices some decentralization and security to achieve high throughput; Layer 2 Rollups are evolving longer faster than expected and are already offering a large number of extensions, and will offer longer more after the implementation of Proto-Danksharding. This means that there is no longer a need for "shard chains", which have now been removed from Ethereum's roadmap.

Ethereum offloads the mainchain by outsourcing the execution layer to Layer2s based on Rollup technology, and the EVM provides a standardized and secure execution environment for smart contracts executed on the Rollup layer. Some Rollup solutions are designed with EVM compatibility in mind, so that smart contracts executed on the Rollup layer can still take advantage of EVM features and functionality, such as OP Mainnet, Arbitrum One, and Polygon zkEVM.

Figure 5: Ethereum's Layer 2 scaling solution

These Layer2s execute smart contracts and process transactions, but still rely on Ethereum for the following:

Settlement: All rollup transactions are done on the Ethereum Mainnet. Users of Optimistic Rollups must wait for the challenge period to elapse or for the transaction to be considered valid after the anti-fraud calculation. Users of ZK Rollups must wait until the validity is proven.

Consensus and data availability: Rollups publish transaction data to Ethereum Mainnet in the form of CallData, allowing anyone to execute a Rollup transaction and rebuild its state if necessary. Optimistic Rollups require a lot of Block short and a 7-day challenge period before being confirmed on the Ethereum mainchain. ZK Rollups provide instant finality and store data available for verification for 30 days, but require significant computing power to create proofs.

1.2 B² Network: Pioneering Bitcoin ZK-Rollup

B² Network is the first ZK-Rollup on Bitcoin that increases transaction speed without sacrificing security. Leveraging Rollup technology, B² Network provides a platform capable of running Turing Complete smart contracts making off-chain transactions, increasing transaction efficiency and maximizing cost drop.

Figure 6: B² Network architecture

As shown in the figure, B² Network's ZK-Rollup Layer uses the zkEVM solution, which is responsible for the execution of user transactions and the output of relevant proofs within the Layer 2 network.

Unlike other rollups, B² NetworkZK-Rollup consists of longest components, including account abstraction module, RPC Service, Mempool, Sequencers, zkEVM, Aggregators, Synchronizers, and Prover. The account abstraction module implements native account abstraction, which allows users the flexibility to program greater security and a better user experience into their accounts. zkEVM is EVM compatible, and it can also help developers migrate DApps from other EVM-compatible chains to B² Network.

Synchronizers ensure that information is synchronized from the B² Node to the Rollup layer, including details such as sequence information, Bitcoin transaction data, etc. The B² Node acts as a off-chain validators and is the performer of long unique functions in the B² network. The Bitcoin Committer module in the B² Node builds a data structure to record B² Rollup data and generates a Tap called a "B² Inscription". Then, Bitcoin Committer sends a UTXO in units of one Satoshi (satoshi) to a Taproot Address containing $B^{2}$inscription, and the rollup data is written to the Bitcoin.

In addition, Bitcoin Committer sets a time-locked challenge that allows challengers to question the promise of zk proof verification. If there are no challengers or the challenge fails during the time lock, then the Rollup is finally confirmed on Bitcoin; If the challenge is successful, the Rollback will be rolled back.

Whether it's Ethereum or Bitcoin, Layer 1 is essentially a single chain that receives scaled data from Layer 2. In large longest cases, the capacity of Layer 2 also depends on the capacity of Layer 1. As a result, the implementation of the Layer 1 and Layer 2 stacks is not ideal for scalability. When Layer 1 reaches its throughput limit, Layer 2 is also affected, which can lead to longer Money Laundering rise and confirmation times, affecting the efficiency and user experience of the entire system.

2. The DA layer is modular

In addition to Celestia's DA solution being favored by Layer2s, other DA-focused innovations have emerged that play a key role in the entire Blockchain ecosystem.

2.1 EigenDA: Empowering Rollup Technology

EigenDA is a secure, high-throughput, and Decentralization DA service with a design inspired by Danksharding. Rollup is able to publish data to EigenDA for lower transaction costs, higher transaction throughput, and secure composability across the EigenLayer ecosystem.

When Ethereum Rollups build Decentralization ephemeral data stores, the data stores can be handled directly by EigenDA operators. Operators are those who participate in the operation of the network and are responsible for processing, verifying, and storing data, and EigenDA can scale horizontally as stake volume and operators rise.

EigenDA combines Rollup technology while transferring the DA part to off-chain processing for scalability. As a result, actual transaction data no longer needs to be replicated and stored on every Node, reducing the need for bandwidth and storage. On-chain only deals with Metadata related to data availability and accountability mechanisms (accountability keeps data stored off-chain and can also verify its integrity and authenticity if necessary).

Figure 7: Basic data flow for EigenDA

As shown in the figure, Rollup writes batches of transactions to the DA layer, and unlike systems that use fraud proofs to detect malicious data, EigenDA plays people for suckers the data into chunks and generates KZG commitments and longest reveal proofs, EigenDA requires nodes to download only a small amount of data [O(1/n)], not the entire blob. Rollup's fraud quorum protocol also verifies that the blob data matches the KZG promise provided in the EigenDA proof. When doing this validation, the Layer2 chain ensures that the transaction data at the root of the Rollup state is not manipulated by the sequencer/proposer.

2.2 Nubit: The first modular DA solution on Bitcoin

Nubit is a scalable, Bitcoin-native DA layer. Nubit is pioneering a Bitcoin-native future, aiming to increase data throughput and availability services to meet the rise growing needs of the ecosystem. Their vision is to bring a large community of developers into the Bitcoin ecosystem and provide them with scalable, secure, and Decentralization tools.

Nubit's team members are professors and doctoral students from UCSB (University of California, Santa Barbara) with an outstanding academic reputation and global reach. They are not only proficient in academic research, but also have extensive experience in Blockchain engineering implementation. Together with domo (the creator of Brc20), the team wrote a paper on modular indexers, adding the design of the DA layer to the indexer structure of the Bitcoin meta protocol and participating in the establishment and development of industry standards.

Nubit's core innovations: Consensus Mechanism, trustless bridges, and data availability, it leverages innovative Consensus Algorithm and Lighting Network to inherit Bitcoin's fully censorship-resistant features, leveraging DAS to improve efficiency:

• Consensus Mechanism: Nubit explores an efficient Consensus based on PBFT (Practical Byzantine Fault Tolerance) powered by SNARKs for signature aggregation. The PBFT scheme combined with zkSNARK technology significantly reduces the communication complexity of verifying signatures between validators and verifies the correctness of transactions without accessing the entire data set.
• DAS: Nubit's DAS is achieved by longing rounds of random sampling of small portions of block data. Successful sampling in each round increases the likelihood that the data will be fully usable. Once a predetermined confidence level is reached, the Block data is considered accessible.
• Trustless Bridge: Nubit uses a Trustless Bridge that leverages the Lighting Network payment channel. This approach not only aligns with native Bitcoin payment methods, but also does not add additional trust requirements. Compared to existing bridges schemes, it brings lower risk to users.

Figure 8: The basic components of Nubit

Let's take a further look at a specific use case to review the full system lifecycle shown in Figure 8. Suppose Alice wants to use Nubit's DA service to complete a transaction (Nubit supports longest data types, including but not limited to inscriptions, Rollup data, etc.).

• Step 1.1: Alice first needs to continue the service by paying gases via Nubit's trustless bridge. In particular, Alice needs to get a public challenge from the trustless bridge, denoted as X (h) (X is the hash range from the verifiable latency function (VDF) to the cryptographic hash function of the challenge domain, where h is the hash of a certain high block).
• Step 1.2 and Step 2: Alice must obtain the evaluation result R of the VDF related to the current round, submit R along with her data and transaction Metadata such as Address and Nonce) to the validator so that it can be merged into the memory pool.
• Step 3: The process by which validators propose a block and its header after reaching consensus. The block header includes the commitment to the data and its associated Reed-Solomon Coding (RS Code), while the block itself contains the raw data, the corresponding RS Code, and basic transaction details.
• Step 4: The lifecycle ends with Alice's data retrieval. The light client downloads the block header, while the full node gets the block and its header.

The light client undertakes the DAS process to verify data availability. In addition, after the Block of the threshold number is proposed, the checkpoints of that history are recorded on the Bitcoin Blockchain through the Bitcoin Timestamp. This ensures that the validator set can block potential remote attacks and supports rapid unbinding.

3. Other solutions

In addition to chains that focus on modularizing specific layers, decentralized storage services can provide long-term support for the DA layer. There are also protocol and chains that provide developers with custom and full-stack solutions that make it easy for users to build their own chains, even without the need for code.

3.1 EthStorage - Dynamic Decentralization

EthStorage is the first modular Layer2 to enable dynamic Decentralization Storage, providing DA-powered Programmability Key-Value (KV) storage that scales Programmability storage to hundreds of terabytes or even petabytes at 1/100th to 1/1000th the cost. It provides Rollups with a long-term DA solution and opens up new possibilities for fully on-chain applications such as gaming, Social Web, AI, and more.

Figure 9: Application scenarios for EthStorage

Qi Zhou, the founder of EthStorage, has been fully involved in the Web3 industry since 2018, holds a Ph.D. from the Georgia Institute of Technology, and has worked as an engineer at top companies such as Google and Facebook. The team is also supported by the Ethereum Foundation.

As one of the core features of Ethereum's Cancun upgrade, EIP-4844 (also known as Proto-dank sharding), introduces temporary data blocks (blobs) for Layer 2 rollup storage, improving the scalability and security of the network. Instead of validating every transaction in the Block, the network only needs to confirm that the blob attached to the Block carries the correct data, which greatly drop the cost of the rollup. However, blob data is only temporarily available, which means it will be discarded within a few weeks. This has a significant impact: Layer 2 cannot unconditionally derive the latest state from Layer 1. If a piece of data can no longer be retrieved from Layer 1, it may not be possible to synchronize the chain via the Rollup.

With EthStorage as a long-term DA storage solution, Layer2s can fetch complete data from their DA layer at any time.

Technical Features:

EthStorage enables Decentralization of dynamic storage: Existing Decentralization storage solutions can support the upload of a large amount of data, but cannot be modified or deleted, and can only re-upload new data. EthStorage, on the other hand, implements CRUD through the original key-value storage paradigm, which is to create, update, read, and delete stored data, thus significantly enhancing the flexibility of data management.

Layer 2 Decentralization Solution Based on DA Layer: EthStorage is a modular storage layer, as long as there is EVM and DA to reduce storage costs, it can be run on any Blockchain (but longing Layer 1 does not currently have a DA layer), even on Layer 2.

Highly integrated ETH: The EthStorage client is a superset of the Ethereum client Geth, which means that when running the Node of EthStorage, it can still participate in any process of the Ethereum normally, and a Node can be Ethereum validators Node and at the same time the data Node of EthStorage.

EthStorage's Workflow:**

Users upload their data to an application contract, which then interacts with the EthStorage contract to store the data.

In an EthStorage Layer2 network, the storage provider receives a notification about the data waiting to be stored.

Storage providers download data from the Ethereum Data Availability Network.

The storage provider submits proof of storage to Layer 1 that there are a large number of replicas in the Layer 2 network.

The EthStorage contract rewards storage providers who successfully submit proof of storage.

3.2 AltLayer - Modular Customization Service

AltLayer provides a longest, no-code Rollups-as-a-Service (RaaS) service. RaaS offerings are designed for long chains and long Virtual Machine worlds, supporting both EVM and WASM. It also supports different Rollup SDKs such as OP Stack, Arbitrum Orbit, Polygon zkEVM, ZKSync's ZKStack and Starkware, different shared ordering services (e.g., Espresso and Radius) and different DA layers (e.g., Celestia, EigenLayer) as well as long other modular services for different layers of the Rollup stack.

A longest rollup stack can be implemented with AltLayer, for example, a rollup designed for applications can be built using Arbitrum Orbit with Arbitrum One as both a DA and a settlement layer, while another Rollup designed for general purpose can be built using the ZK Stack, using Celestia as the DA layer and Ethereum as the settlement layer.

Note: Seeing this, you may wonder, why can the settlement layer be implemented by OP and Arbitrum? In fact, the current rollup stacks of these Layer 2s are implementing similar "interchain" work proposed by Cosmos to achieve interconnection: OP proposes Superchain, and the OP Stack serves as a standardized development stack supporting Optimism technology, integrating different Layer 2 networks and promoting interoperability between these networks; Arbitrum proposed the Orbitchain strategy, which allows the creation and deployment of Layer 3, also known as an AppChain, on the Arbitrum Mainnet based on Arbitrum Nitro (technology stack). Orbit Chains can be Settlement directly to Layer 2s or directly Settlement to Ethereum.

3.3 Dymension - Full Stack Modularity

Dymension is a modular blockchain network based on the Cosmos SDK that aims to ensure the security and interoperability of RollApps through the use of the IBC standard.

Dymension divides Blockchain functionality into longest layers, with Dymension Hub as the settlement layer and consensus layer providing security, interoperability, and liquidity for RollApp, and RollApp as the execution layer. The data availability layer is a DA provider supported by the Dymension protocol, and developers can choose the appropriate data availability provider according to their needs.

The settlement layer (Dymension Hub) maintains the RollApps registrar and corresponding important information such as status, sequencer list, current active sequencer, execution module checksum, etc. The rollup service logic is fixed within the settlement layer, thus forming a hub for native interoperability. As a settlement layer, Dymension Hub has the following features:

Rollups service natively on the settlement layer: Provides the same trust and security assumptions as the base layer, but with simpler, more secure, and more efficient design shorts.

Communication and Transactions: Dymension's RollApp implements Inter-RollApp communication and transactions at the settlement layer through embedded modules, providing trust-minimized bridges. In addition, RollApps is able to communicate with other IBC-enabled chains through the Hub.

RVM (RollApp Virtual Machine) :D ymension settlement layer initiates RVM in the event of a fraud dispute. RVM is capable of resolving disputes in a variety of execution environments, such as EVM, extending the power and flexibility of RollApp enforcement.

Censorship-resistant: A user who undergoes a Sequencer review can post a special transaction to the settlement layer. This transaction is forwarded to Sequencer with a request to be executed within the specified time frame. If the transaction is not processed within the specified time, Sequencer will be penalized.

AMM (AMM) :D ymension introduces an embedded AMM in the Settlement center, thus creating a core financial center. Provide shared liquidity for the entire ecosystem.

IV. Comparison of longest ecological modular blockchains

In the previous article, we discussed the modular blockchain system and longest representative projects, and now we will shift the focus to the comparative analysis between different ecosystems, aiming to understand the modular blockchain objectively and comprehensively.

V. Summary and outlook

As we can see, the Blockchain ecosystem is moving towards modularity. In the past Blockchain world, chains operated in isolation and competed with each other, which made it difficult for users, developers, and assets to flow between different chains, limiting the overall development and innovation of the ecosystem. IN THE WEB3 WORLD, PROBLEM DISCOVERY AND RESOLUTION IS A COLLABORATIVE PROCESS. In the beginning, Bitcoin and Ethereum attracted a lot of attention as a single chain, but as the problems of the single chain were exposed, the modular chain gradually attracted attention. Therefore, the explosion of modular chains is not accidental, but the inevitable development.

Modular blockchains increase the flexibility and efficiency of the chain by allowing individual components to be optimized and customized independently. However, this architecture also faces challenges, such as communication latency and increased complexity of system interactions. In fact, the long-term benefits of modular architectures, such as improved maintainability, reusability, and flexibility, often outweigh the short-term performance losses. In the future, with the development of technology, better solutions will be found to these problems.

GeekCartel believes that Blockchain ecosystems all have a responsibility to provide a reliable base layer and common tools throughout the modular stack to facilitate smooth chain-to-chain direct links, and if the ecosystem can be more harmonious and interconnected, users will be able to use Blockchain technologies more easily, and will also attract new users who are more long to Web3.