# Modular blockchain: The final piece of the Web3 puzzle

> The trend of modular blockchain is not only a technological change, but also an important strategy to promote the entire blockchain ecosystem to meet future challenges.

**Published by:** [Modular blockchain](https://paragraph.com/@modular-blockchain/)
**Published on:** 2024-12-12
**Categories:** #web3, #modular, #crypto, #eth
**URL:** https://paragraph.com/@modular-blockchain/modular-blockchain-the-final-piece-of-the-web3-puzzle

## Content

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 blockchain, a single (Monolithic) chain needed to handle all tasks, including the execution layer, data availability layer, consensus layer, and settlement layer. Modular blockchain solves these problems by treating these tasks as freely combinable modules, each focusing on a specific function. Execution layer: responsible for processing and verifying all transactions and managing blockchain state changes. Consensus layer: agreeing on the order of transactions. Settlement layer: used to complete transactions, verify proofs, and build bridges between different execution layers. Data availability layer: responsible for ensuring that all necessary data is accessible 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 promote 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 to help readers better understand modular blockchain and look forward to future development trends. Note: The content of this article does not constitute investment advice.Celestia, the pioneer of modular blockchain In 2018, Mustafa Albasan and Vitalik Buterin published a groundbreaking article that provided new ideas for solving the scalability problem of blockchain. "Data Availability Sampling and Fraud Proofs" introduced a method by which the blockchain can automatically expand storage space as the network nodes increase. In 2019, Mustafa Albasan delved into and wrote "Lazy Ledger", proposing the concept of a blockchain system that only handles data availability. Based on these ideas, Celestia came into being as the first data availability (DA) network with a modular structure. It is built with CometBFT and Cosmos SDK and is a proof-of-stake (PoS) blockchain that effectively improves scalability while maintaining decentralization. The DA layer is critical to the security of any blockchain because it ensures that anyone can check the transaction ledger and verify it. If a block producer proposes a block when not all data is available, the block can achieve finality but will contain invalid transactions. Even if the block is valid, block data that cannot be fully verified will negatively impact users and the functionality of the network. Celestia implements two key features, Data Availability Sampling (DAS) and Namespace Merkle Trees (NMT). DAS enables light nodes to verify data availability without downloading the entire block. NMTs allow block data to be partitioned into separate namespaces for different applications, meaning that applications only need to download and process data relevant to them, greatly reducing data processing requirements. Importantly, DAS allows Celestia to scale as the number of users (light nodes) increases without compromising the security of end users. Modular blockchains are making it possible to build new chains in unprecedented ways, and different types of modular blockchains can work together for different purposes and in different architectural ways. Celestia officially proposed several ideas and examples of modular architecture design, showing us the flexibility and composability of modular blockchain:Figure 1 Layer 1 and Layer 2 architectureLayer 1 and Layer 2: Celestia calls it simple modularity, which was originally built for the scalability of Ethereum as a single Layer 1. Layer 2 focuses on execution and Layer 1 provides other key functions. Celestia supports chains built on Arbitrum Orbit, Optimism Stack and Polygon CDK (soon to be supported) technology stacks to use Celestia as the DA layer. Existing Layer 2 can use Rollup technology to switch its data from being published on Ethereum to being published on Celestia. Commitments to blocks are published on Celestia, which is more scalable than the traditional method of publishing data on a single 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 (which will be explained later), and the DA layer uses Celestia. The chains interact through the IBC protocol (IBC is based on Cosmos SDK, 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 architectureExecution, settlement, and data availability: Optimized modular blockchains, such as decoupling the execution, settlement, and data availability layers between specialized modular blockchains.Figure 3: Execution and DA layer architectureExecution and DA: Since the purpose of implementing a modular blockchain is flexible, the execution layer is not limited to publishing its blocks to the settlement layer. For example, a modular stack could be created that does not involve a settlement layer, but only an execution layer on top of a consensus layer and a data availability layer. Under this modular stack, the execution layer would be sovereign, posting its transactions to another blockchain, typically for ordering and data availability, but handling its own settlement. In the context of a modular stack, a sovereign Rollup is responsible for execution and settlement, while the DA layer handles consensus and data availability. The difference between a sovereign Rollup and a smart contract Rollup is that: Smart contract Rollup transactions are validated by smart contracts in the settlement layer. Sovereign Rollup transactions are validated by the nodes of the sovereign Rollup. Compared to smart contract Rollups, sovereign Rollu nodes have autonomy. In a sovereign Rollup, the ordering and validity of transactions are managed by the Rollup's own network, without relying on a separate settlement layer. Currently Rollkit and Sovereign SDK provide a framework for deploying a sovereign Rollup testnet on Celestia.

## Publication Information

- [Modular blockchain](https://paragraph.com/@modular-blockchain/): Publication homepage
- [All Posts](https://paragraph.com/@modular-blockchain/): More posts from this publication
- [RSS Feed](https://api.paragraph.com/blogs/rss/@modular-blockchain): Subscribe to updates

## Optional

- [Collect as NFT](https://paragraph.com/@modular-blockchain/modular-blockchain-the-final-piece-of-the-web3-puzzle): Support the author by collecting this post
- [View Collectors](https://paragraph.com/@modular-blockchain/modular-blockchain-the-final-piece-of-the-web3-puzzle/collectors): See who has collected this post