# Modular blockchain

**Published by:** [hatec](https://paragraph.com/@hatec/)
**Published on:** 2024-10-31
**URL:** https://paragraph.com/@hatec/modular-blockchain-1

## Content

A modular blockchain is an approach to blockchain design that separates core functions into distinct layers or modules. Each module can be independently developed, maintained, and upgraded, enhancing the blockchain's flexibility and adaptability. There are four main components in a modular blockchain:Execution Layer (EL) - Processes transactions and smart contracts to change the network state.Consensus Layer (CL) - Ensures participants agree on the network's current state.Data Availability Layer (DA) - Guarantees that data is accessible for validators to verify transactions.Settlement Layer (SL) - Resolves disputes, verifies transaction validity, and ensures transaction finality.Modular blockchains are gaining traction with rollups, a leading example of this approach, which continue to grow despite market fluctuations. Rollups’ TVL has risen consistently, and their transaction processing capacity is now about ten times that of the Ethereum Mainnet. The trend towards modular blockchain architecture is notable, with projects transitioning from monolithic to modular structures. Projects like Celo and Ethereum are examples, with Ethereum evolving its roadmap to focus on data sharding rather than execution sharding. Dedicated infrastructures for data availability (like Celestia and Avail) and other shared services are fueling this modular shift. The Execution Layer, particularly in modular blockchains, is considered highly valuable, often featuring compatibility with Ethereum’s EVM for faster ecosystem development or creating unique non-EVM runtimes for enhanced parallelization. Rollups on the Execution Layer are categorized into Generalized Rollups (which support diverse dApps) and App-Specific Rollups (Rollapps), designed for specific applications, enhancing functionality and user experience for dedicated dApps. Overall, modular blockchains’ adaptability and scalable approach make them well-suited for the dynamic crypto market.

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