🚨 Understanding Modularity in Cryptocurrency:
Ethereum is a monolithic blockchain, meaning the base layer handles all the components of a blockchain.
Modularity as a concept in Cryptocurrency is a contrast to this and this thread will explain this and show you the advantages .
- The different "layers" of functionality(components) that make up a blockchain are:
1) Execution:
This layer handles the processing of transactions and users interact with the blockchain through this layer by signing transactions,deploying smart contracts & transferring assets
2) Settlement:
The settlement layer verifies the execution of rollups and resolves disputes. Unlike monolithic chains, this layer is optional in modular networks. Think of it as the Supreme Court in the court system, providing final arbitration on disputes.
3) Consensus:
The consensus layer ensures ordering and finality by having a network of full nodes download and execute block contents, reaching consensus on the validity of state transitions.
4) Data Availability:
This layer publishes and stores the data required to verify the validity of state transitions. It plays a critical role in preventing attacks where malicious block producers withhold transaction data.
🧵 Cryptocurrencies have complex interconnected networks, with modular structures playing a crucial role. Modularity divides the network into distinct modules or communities based on common characteristics or functionalities.
- In simpler terms, it's like breaking down a puzzle into smaller pieces that fit together seamlessly.
In crypto ecosystems, modularity is observed when blockchain projects specialize in specific functions like smart contracts, privacy protocols, DeFi, gaming platforms etc .
- Each module serves a unique purpose while maintaining interoperability within the cryptocurrency landscape.
The idea of a modular blockchain is that it can specialize in a couple of functions instead of trying to do everything e.g decoupling consensus from execution
🧵 One advantage of modular networks is enhanced scalability and innovation potential. By focusing on specialized modules rather than attempting comprehensive solutions under one umbrella project alone,a greater level of expertise can be achieved for each component.
- This specialization fosters faster development cycles,reduces complexity,and allows for swift adaptation to emerging trends without compromising security or efficiency.
Other advantages of modular networks include;
- Modular networks promote collaboration among crypto actors, enhancing innovation and diversity.
- Clear interfaces and standardized protocols enable efficient interoperability between projects, encouraging experimentation and feedback loops.
🧵 @CelestiaOrg is an example of a modular blockchain that provides the other functions that rollups depend on, like consensus and data availability.
Celestia sets itself apart from previous blockchain designs by placing execution as a secondary functionality.
- By embracing modularity, Celestia allows for the creation of purpose-specific blockchains, eliminating the need for execution within its core framework. Instead, execution can be delegated to a separate chain.
This approach enhances efficiency and scalability within the system.
🧵 Another example is @MantaNetwork which is a multi-modular protocol that provides developers the flexibility on leveraging Manta’s private identity tools across chains and in web2 environments including mobile apps.
- Manta’s SDKs and proof keys offer developer-friendly solutions for integrating on-chain identity with just a few lines of code. It also Leverages Celestia's modular data availability while delivering a blazing-fast infrastructure at a fraction of the cost of monolothic L2s.
🧵 One cannot talk about modularity and not mention @Hyperlane_xyz which is a very unique protocol. Using Hyperlane, developers can build Interchain Applications which are apps that span multiple blockchains
With this modular platform it is already possible to do these 👇
- move native ERC 20 and ERC 721 tokens across chains
- DAOs make smart contract calls on remote chains
- interchain queries
- interchain security modules for developers to have control over their security model, allowing them to configure, compose, and customize their security
🧵 Lastly on my radar is @alt_layer which is an open decentralised protocol for rollups. They introduced a concept known as Restaked rollup which takes existing rollups and provides them with enhanced security, decentralisation, interoperability and crypto-economic fast finality.
- Restaked rollups combines the ease of spinning up rollups using rollup stacks such as OP Stack, Arbitrum Orbit, ZKStack by ZKSync, Polygon CDK and others with the power of EigenLayer's restaking mechanism to bootstrap network security and build a decentralised network.
- This protocol works with modularity as its possible for users to pick and choose for their rollups: a preferred run-time (eg EVM, WASM & others), a data availability layer (such as the underling L1 or data availability committee, Celestia,etc), a settlement layer (eg Eth , Arb)
🧵 Understanding Modularity in the crypto world helps identify areas for improvement and mitigate risks. Researchers, developers, and crypto enthusiasts continue to unravel the mystery of modularity to shape the future of cryptocurrencies as a whole.
I'll be looking forward to opinions of these chads on Modularity in Cryptocurrency.
@Defi0xJeff
@DegenCamp
@matrixthesun
@0xAndrewMoh
@Beacon_Early
@defiinfant
@CryptoNikyous
@eli5_defi
@CryptoShiro_
@Karamata22
@alphabatcher
@iambullsworth
@DeFiMann
@dontbuytops
@defi_pandaa
Mars_DeFi
@Mars_DeFi
Crypto|DeFi |Web 3 geek |No chain supremacy|Tweets are always my personal opinion| Marketing and Advisory|t.me/Mars_DeFi03