Modular Blockchain Architecture

Introduction

Traditional “monolithic” blockchains attempt to handle all functions - execution, settlement, consensus, and data availability - within a single system. While this approach works, it creates inherent scalability limitations as each node must process everything. Modular blockchain architecture takes a different approach by separating these functions into specialized layers, allowing each to scale independently.

Understanding Blockchain Functions

Before diving into modular designs, let’s understand the core functions that any blockchain system must provide:

Execution

The computation of state transitions - processing transactions, running smart contracts, and updating account balances. This requires significant computational resources and historically has been the main bottleneck for scaling.

Data Availability (DA)

The guarantee that the data needed to verify state transitions is publicly available. Without this guarantee, users can’t validate the chain’s state or detect fraud. This function requires significant storage resources and network bandwidth.

Settlement

The final determination of state transitions, including dispute resolution and finality guarantees. This layer provides the ultimate security and must be highly decentralized and resistant to manipulation.

Consensus

The mechanism by which nodes agree on the ordering of transactions and the current state. This must be both secure and efficient while maintaining decentralization.

The Data Availability Layer

Celestia’s Approach

Celestia introduced a groundbreaking approach by creating a blockchain focused solely on data availability. Its innovation lies in how it enables secure sampling of block data.

Key features:

• Data availability sampling (DAS)
• 2D Reed-Solomon encoding
• Light client optimizations
• Namespace-based organization

The core innovation is that clients can verify data availability without downloading entire blocks:

Traditional verification: Download entire block (O(n) data)
Celestia verification: Sample few random bytes (O(log n) data)

Ethereum Data Availability

Ethereum’s approach to data availability has evolved with the introduction of Proto-Danksharding and blob transactions:

Key characteristics:

• Dedicated blob space in blocks
• Separate fee market for blob data
• KZG commitments for efficient verification
• Time-limited data availability

The blob transaction format:

struct BlobTransaction {
    // Regular transaction fields
    address from;
    address to;
    uint256 value;
    
    // Blob-specific fields
    bytes32[] commitments;    // KZG commitments
    bytes[] blobs;            // The actual data
    uint256 blobGasPrice;     // Separate fee for blob space
}

The Execution Layer

Optimistic Rollups

Optimistic rollups execute transactions off-chain but post transaction data and state commitments to the settlement layer. They rely on fraud proofs to ensure correctness.

Key components:

• Sequencer for transaction ordering
• State commitment scheme
• Fraud proof system
• Challenge period

Example of an optimistic transaction submission:

contract OptimisticRollup {
    struct StateUpdate {
        bytes32 stateRoot;
        bytes32 parentStateRoot;
        bytes transactions;
        uint256 timestamp;
    }
    
    function submitStateUpdate(StateUpdate calldata update) external {
        require(verifyStateTransition(update), "Invalid state transition");
        startChallengeWindow(update);
    }
}

ZK Rollups

ZK rollups use zero-knowledge proofs to validate state transitions, providing faster finality and stronger security guarantees than optimistic solutions.

Core elements:

• SNARK/STARK proof generation
• Efficient state encoding
• Proof verification circuit
• On-chain verification

The Settlement Layer

Ethereum as Settlement

Ethereum has emerged as the primary settlement layer for most scaling solutions. Its role includes:

• Storing state commitments
• Verifying proofs
• Resolving disputes
• Managing asset bridges

Key settlement functions:

interface ISettlement {
    // For optimistic rollups
    function challengeStateTransition(
        bytes32 stateRoot,
        bytes proof
    ) external;
    
    // For ZK rollups
    function verifyStateTransition(
        bytes32 newState,
        bytes proof
    ) external returns (bool);
}

Cross-Layer Communication

Communication between layers requires careful design:

• Message passing protocols
• State verification schemes
• Asset transfer bridges
• Finality guarantees

Practical Implementations

Layer 2 Scaling Solutions

Current production systems demonstrate different approaches to modular architecture:

Optimistic solutions:

• Arbitrum: Advanced sequencing
• Optimism: EVM equivalence
• Base: Modified Optimism stack

ZK solutions:

• zkSync: Custom VM
• StarkNet: Cairo VM
• Polygon zkEVM: EVM compatibility

Data Availability Solutions

Multiple approaches to DA are emerging:

1. Celestia

• Dedicated DA chain
• Namespaced data organization
• Efficient sampling

2. EigenDA

• Distributed DA network
• Economic security model
• Restaking mechanics

3. Ethereum blobs

• Native DA solution
• Time-bounded availability
• Separate fee market

Future Developments

Cross-Domain MEV

Modular architectures create new considerations for MEV:

• Cross-layer arbitrage
• Sequencer extractable value
• DA fee markets

Interoperability

Standardization efforts are emerging:

• Cross-layer messaging protocols
• Unified bridge standards
• Shared security models

Conclusion

Modular blockchain architecture represents a fundamental shift in how we scale blockchain systems. By separating key functions into specialized layers, we can achieve greater scalability while maintaining security. The field continues to evolve rapidly, with new solutions and optimizations emerging regularly.

The success of modular designs will likely determine the future of blockchain scalability, as they enable each layer to evolve and optimize independently while maintaining interoperability through standardized interfaces.