jakiro
Source: Gryphsis Academy
TL;DR
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Monopoly blockchainIt is known for its comprehensiveness and independently undertakes all levels of the network, from data storage to transaction verification, etc.andModular blockchainBy separating the different functions of the blockchain into independent modules, performance support and a smooth user experience can be provided on specific functions, solving the “impossible triangle” problem to a certain extent.
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EthereumAs the first blockchain platform to support smart contracts, it provides fertile soil for modular design.With the development of blockchain technology,Bitcoin EcologyWe have also begun to explore the possibility of modularity, enabling more advanced features by adding new modules, such as improved privacy protection, more efficient transaction processing, or enhanced smart contract capabilities.
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Modular technology represents a more “soulized”Plugable product ideas, more flexible and customizable blockchain solutions will emerge in the future, with various services and features that can be inserted and unplugged as easily as Lego blocks.This flexibility allows developers to quickly build and deploy blockchain solutions according to the needs of specific application scenarios.
1. What is a modular blockchain
source: Celestia.org
When we explore modular blockchain, we must first understandMonolithic BlockchainThis concept.Single chains, such as Bitcoin, Ethereum, etc., are known for their comprehensiveness and independently undertake all levels of the network, from data storage to transaction verification, and then to smart contract execution.In this process, the single chain plays the role of a generalist and involves all aspects.
Taking Ethereum as an example, a mature monolithic blockchain can generally be roughly divided into four architectures:
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Execution Layer
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Settlement Layer
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Data Availability Layer
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Consensus Layer
The following figure explains the role of each layer of architecture in detail by comparing accounting on the blockchain to a game:
Through this analogy, we can have a clearer understanding of how the various architectures of blockchain work together.A single blockchain is to concentrate all functions on the same chain to execute, andModular BlockchainIt is a new type of blockchain architecture that breaks down the blockchain system into multiple special components or levels, each component responsible for handling specific tasks such as consensus, data availability, execution and settlement.
Modular blockchain is like a group of specialists, focusing on in-depth mining and technological innovation in their respective fields.This focus allows modular blockchains to deliver superior performance and user experience on specific features, for example, they can provide faster transaction processing speeds at lower costs.
existNode architectureOn the one hand, a single chain relies on full nodes, which must download and process data copies of the entire blockchain.This not only puts high requirements on storage and computing resources, but also limits the network’s expansion speed.In contrast, modular blockchain adopts a light node design that only requires processing of block header information, thereby significantly improving transaction speed and network efficiency.
A significant advantage of modular blockchains is its flexibility and collaboration.They can outsource non-core functions to other experts, creating a synergistic effect that achieves a significant improvement in overall performance.This design philosophy is similar to Lego bricks, allowing developers to freely combine different modules according to project needs to create diverse solutions.
Although monolithic chains have advantages in global control, security and stability, they also face challenges of scalability, upgrade difficulty and adaptation to new needs.Modular blockchain stands out for its high flexibility and customizability, simplifying the creation and optimization process of new blockchains.
However, modular blockchains also face their unique challenges.Its complex architecture increases the workload of developers in design, development, and maintenance.As an emerging technology, modular blockchain has not yet undergone the test of comprehensive security testing and market fluctuations, and its long-term stability and security still need further verification.
2. Why Modular Blockchain Needs
Why is modular blockchain technology gaining widespread attention and predicted as a “future trend”?This is closely related to the famous “impossible triangle” theory in the field of blockchain.
Source: chainlink
The “impossible triangle” of blockchain refers to the difficulty of a blockchain network to achieve optimal state in the three core attributes of security, decentralization and scalability at the same time.
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ScalabilityFocus on the ability of the network to process large amounts of transactions and its ability to maintain efficient and low-cost operation as users and transaction volumes grow.It is usually measured by TPS (volume per second) and latency (time required for transaction confirmation).
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SecurityIt involves the cost and difficulty of protecting a blockchain network from attacks.For example, Bitcoin’s POW mechanism requires attackers to master more than 51% of the computing power on the entire network, while Ethereum’s POS mechanism requires nodes with more than ⅓ to conspire.
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DecentralizationIt describes that the operation of the network does not rely on a single central node, but is distributed on many nodes. The more nodes and the wider the geographical distribution, the higher the degree of decentralization of the network.
The core point of the “Impossible Triangle” is that it is difficult for a blockchain system to optimize all three characteristics.For example: Among many public chains, Bitcoin and Ethereum have outstanding performance in decentralization and security due to their extensive node distribution and sufficient number of nodes.
However, they sacrifice some scalability, resulting in slower transaction speeds and higher transaction fees: Bitcoin’s block time is about 10 minutes, Ethereum’s TPS is about 13, and Ethereum’s as transaction volume surges, Ethereum’sTransaction fees can be as high as hundreds of dollars.
It is in this context that modular blockchain technology emerged, which solves the challenges of traditional public chains in terms of scalability and transaction costs by assigning different functions to special modules.For example, Bitcoin’s Lightning Network and Ethereum’s Rollup technology are both embodied in modular thinking.
The advantage of modular blockchain is its hierarchical architecture that allows each layer to be optimized for specific needs.The data layer can focus on data storage and verification, while the execution layer can handle smart contract logic.This separation not only improves performance and efficiency, but also promotes interoperability among different blockchains, providing the foundation for building an open and interconnected ecosystem.
To sum up, modular blockchain technology provides a new way to solve the limitations of traditional public chains.On the basis of maintaining decentralization and security, it achieves higher scalability and lower transaction costs, which is of far-reaching significance to the wide application and long-term development of blockchain technology.
3. Modular Blockchain Track-Project Analysis
Modular blockchains can be divided into different types according to their architectural characteristics.Among these types, the data availability layer and the consensus layer are often designed as a unified whole due to their tight interdependence.This is because when nodes receive transaction data, they usually determine the order of transactions at the same time, which is the core of blockchain security and immutability.
Based on this design principle, we can understand the different projects of modular blockchain from the three aspects of the execution layer, the data availability layer, the consensus layer, and the settlement layer.
3.1 Execution layer
Layer 2 technology, as an extension of the execution layer in the blockchain architecture, is an embodiment of the concept of modular blockchain.It strives to improve the scalability of the main chain by building off-chain networks, systems or technologies on the underlying blockchain.
The Layer 2 solution allows faster, more cost-effective transaction processing while maintaining security and decentralized features with the underlying blockchain.According to the dune board produced by @0xning, we can see that the gas consumed by Layer 2 verification and clearing on the Ethereum ecosystem accounts for an average of less than 10%, which greatly saves users’ transaction costs.
source: https://dune.com/0xning/ethereum-gas-war
Rollup technology is currently the most mainstream solution for Layer 2. Its core concept is “off-chain execution, on-chain verification”, performing calculations and other tasks off-chain, and then uploading the calldata data back to the main network.
Execute off-chain
In the Rollup model, transactions are executed off-chain, while the underlying blockchain is only responsible for verifying the transaction proof in the smart contract and storing the original transaction data.This design significantly reduces the computational burden on the main chain and reduces storage requirements, thus allowing for more efficient transaction processing.
To further reduce costs, Rollup adopts transaction packaging technology.It can be compared to the container of goods in logistics, and sending each item individually will incur high freight costs.And Rollup technology significantly reduces the cost of each transaction by packing multiple transactions together and only “shipping” in one go.
On-chain verification
On-chain verification is the key to Layer 2 network security.The Layer 2 network must provide proof of encryption to resolve potential differences on the underlying blockchain.Currently, two mainstream proof mechanisms are false proof and valid proof, which support Optimistic Rollups and ZK Rollups respectively.
The erroneous proof of Optimistic Rollups
Optimistic Rollups adopts an optimistic assumption that all transactions default to valid unless there is clear evidence that there is a mistake.This model relies on false proofs (fraud proofs) during the challenge period, and any network participant can submit proofs to challenge the state of the smart contract, ensuring the fairness and transparency of the network.
According to L2BEAT data, there are currently 16 Layer 2 that use the Optimistic Rollups mechanism, such as: Arbitrum, OP, Base, Blast, etc.
Source: l2beat.com
Proof of validity of ZK Rollups
Unlike Optimistic Rollups, ZK Rollups adopts a more cautious approach that requires all transactions to be proven valid before they are accepted.This proof mechanism is similar to a verification process, ensuring that every transaction and calculation in the Layer 2 network is accurate.
In short, the proof of validity is the cornerstone of ZK-Rollups, which requires that each transaction be accompanied by a corresponding proof, ensuring that smart contracts on the underlying blockchain can be verified and approved for status changes.For verification nodes, ZK Rollups provides a zero-error settlement mechanism because every transaction must pass strict validation.
According to L2BEAT data, there are currently 11 Layer 2 that use the ZK Rollups mechanism, such as Linea, Starknet, zkSync, etc.
Source: l2beat.com
3.2 Data availability layer and consensus layer
3.2.1Celestia
As a pioneer in modular blockchain, Celestia is essentially a data availability layer that provides a solid foundation for the development of dApps and Rollup.By deploying on Celestia’s data availability and consensus layer, application developers can focus on performing logic optimizations, leaving the complexity of data availability and consensus mechanisms to Celestia for processing.
Celestia’s architectural design provides a diverse solution for modular expansion, and its architecture mainly includes the following three types:
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Sovereignty Rollup:Celestia provides a data availability layer and a consensus layer, while settlement layer and execution layer are independently implemented by their respective sovereign chains.
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Settlement Rollup (for example, Cevmos project):Based on the DA and consensus layer provided by Celestia, Cevmos provides settlement layer services, while the application chain assumes the role of execution layer.
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Celestium:The data availability layer is under the responsibility of Celestia, while the consensus layer and settlement layer rely on Ethereum’s powerful network, and the application chain continues to focus on the execution layer.
Celestia adopts a number of innovative technologies that significantly reduce the cost of data storage and optimize storage efficiency.
Elimination coding technology
One of Celestia’s innovations is the application of Erasure Codes.In the paper “Data Availability Sampling and Fraud Proof” co-written by Mustafa Albasan (one of the founders of Celestia) and Vitalik Buterin, a new architectural idea is proposed, that full nodes are responsible for block production, while light nodes areResponsible for block verification.Elimination coding technology introduces redundancy during data transmission, ensuring that the original data block can be fully restored even in the case of up to 50% of data loss.
This mechanism means that in order to ensure 100% availability of block data, block producers only need to publish 50% of block data to the network.If there is a malicious producer trying to tamper with 1% of the block data, they actually need to tamper with the entire 50% of the data, which greatly increases the cost of the evildoers.
Data availability sampling
Celestia solves the scalability problem of blockchain by introducing data Availability Sampling (DAS) technology.The DAS workflow includes the following key steps:
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Random sampling:Light nodes perform multiple rounds of random sampling of block data, requesting only a small portion of block data at a time.
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Gradually increase confidence:As light nodes complete more rounds of sampling, their confidence in data availability gradually increases.
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Reach confidence threshold:Once the light node reaches a preset confidence level (such as 99%) through sampling, it considers the data for the block to be available.
This mechanism allows light nodes to verify the availability of block data without downloading the entire block data, ensuring the integrity and availability of blockchain data.Celestia focuses on providing data availability rather than execution state, which increases block productivity, with more space per block and able to accommodate more sampled data, significantly improving TPS (transaction processing per second).
3.2.2 EigenLayer
EigenDAis a secure, high throughput and decentralized data availability service, and is the first active verification service (AVS) launched on EigenLayer.AVS can be understood as a node operation and maintenance provider, and is a part of the thousands of node operation and maintenance providers on Ethereum. It is based on its job (responsible for Ethereum consensus verification) and has additional private activities (services haveConsensus verification requires rollup and other networks, and then obtain additional benefits.
With the increase in the number of restaked Ethereum and more AVSs will be added to the EigenLayer ecosystem in the future, Rollups can obtain lower transaction costs and higher security composability in the EigenLayer ecosystem.
EigenLayer is an Ethereum-based re-staking protocol. It uses the stakeholder of the Ethereum consensus layer as a validator, that is, it uses part of Ethereum’s security to avoid the trust risk of centralized service providers or their own tokens, and thus reduces theThe development threshold for other project parties is set.At the same time, it also enhances Ethereum’s trust network and increases the value and influence of Ethereum.
In terms of architecture, EigenDA uses ZK technology to verify the status data submitted by Layer 2, and the EigenDA network that Restaking ETH ensures consensus security is responsible for the final certainty, and finally Layer 2’s status data is submitted and saved to the Ethereum main network.Therefore, EigenDA is equivalent to a subcontractor for the verification and final certainty link in the DA service of the Ethereum mainnet, rather than a competitor like Celestia.
3.2.3 Avail
Avail is a modular blockchain project announced by the Polygon team in June 2023, split from Polygon in March this year to operate as an independent entity.Avail is currently running on the test network and has just completed a $43 million Series A financing a few times ago, led by Dragonfly and Cyber Fund.
The core architecture of Avail is mainly composed of three parts: Avail DA, Avail Nexus, and Avail Fusion.Avail DA is a modular data availability layer, which provides DA services to various blockchains, just like Celestia.Avail Nexus is a standardized cross-chain messaging protocol, similar to Cosmos’ IBC protocol, providing interoperable operations between various cross-chains.Avail Fusion introduces a multi-asset staking POS consensus, with the goal of providing security consensus guarantees for the entire Avail network.
On the technical side, Avail DA uses Kate polynomial commitments to avoid fraudulent proofs, without the assumption that most nodes are honest and do not rely on full nodes to get data available.This is different from Celestia’s architecture, which is based on fraud proof, so there is an essential difference between the two at the technical level.
With the emergence of modular data availability blockchain projects such as Celestia and Avail, modular DA War will become more and more intense, and the functionality of Ethereum as the DA layer will also be diverted, and it is likely that it will show “one more” in the future.Strong” competitive landscape.
3.3 Settlement Layer
3.3.1 Dymension
Dymension is a modular blockchain platform based on Cosmos. It provides a simple framework for the development of RollApp through built-in scalability summary technology.In the Dymension architecture, developers can focus on the implementation of business logic, leveraging the Rollup Development Kit (RDK) and a dedicated settlement layer to quickly deploy Rollup for specific applications.
The architecture of Dymension consists of two core components: RollApp and Dymension Hub.
RollApp is a fusion of Rollup and App, a high-performance modular blockchain dedicated to specific applications on Dymension.RollApp can be presented in many forms, including but not limited to dedicated Layer 2 solutions for decentralized applications such as DeFi platforms, Web3 games, NFT trading markets, etc.
In RollApp, the Sequencer plays a key role, responsible for the verification, sorting and processing of local transactions.After block packaging is completed, this data will be passed to the peer full node and published on the chain to a data availability network selected by RollApp, such as Celestia.After obtaining the response from Celestia, the sorter sends its status root to the Dymension Hub to achieve consensus formation and settlement.
As the center of the entire ecosystem, Dymension Hub undertakes the functions of the consensus layer and settlement layer.It receives the status root from RollApp, providing RollApps with final transaction confirmation and settlement services.
Through this design, Rollup can hand over consensus and settlement tasks to Dymension Hub, and data storage and verification tasks to DA networks such as Celestia.In this way, Rollup can share the economic security guarantees of these two networks, while focusing on improving the execution efficiency and user experience of the application itself.
3.3.2 Cevmos
The Cevmos name combines Celestia, EVMos and CosmOS to provide a billing layer for EVM-compatible rollups.
Since Cevmos itself is a rollup, all rollups built on it are collectively called settlement rollups.Each rollup reduces migration workload by minimizing two-way trust bridges with Cevmos rollups.Rollups on Cevmos publishes the data to Cevmos, and then Cevmos batches the data and publishes it to Celestia.Just like Ethereum, Cevmos will perform rollups proof as a settlement layer.
4. Modular blockchain in the Bitcoin ecosystem
With the inscription wealth creation effect brought by the Ordinals protocol and the approval of Bitcoin ETFs, multiple positive factors have gathered, injecting new vitality into the Bitcoin ecosystem.The market’s attention was quickly attracted to the Bitcoin ecosystem, and the funds of institutional investors also flocked to this field, showing confidence and expectations for the future development of the Bitcoin ecosystem.
Against this background, Bitcoin Layer 2 technology has shown a prosperous scene, with many technical solutions emerging one after another, forming a diversified and vibrant technological ecosystem.Various innovative solutions have emerged to jointly promote the expansion and optimization of the Bitcoin network.
Although the industry has not reached a unified consensus on the accurate definition of Bitcoin Layer 2, this article will draw on the concept of Ethereum’s modular blockchain and explore the possibilities and methods of building Bitcoin Layer 2 from a modular perspective.
4.1 Why does Bitcoin need modularity?
The Ethereum network is known for its Turing-complete smart contract capabilities, capable of storing and verifying historical states, thus supporting complex decentralized applications (DApps).In contrast, the Bitcoin network is a stateless non-smart contract network, and its system design is mainly due to two aspects:
1. Limitations of UTXO Account System
In the blockchain world, there are mainly two ways to keep record: the account/balance model and the UTXO model.The UTXO model adopted by Bitcoin is in sharp contrast to the account/balance model adopted by Ethereum.
In the Bitcoin system, although users see account balances in their wallets, in fact, the Bitcoin system designed by Satoshi Nakamoto does not contain the concept of balance.The so-called “bitcoin balance” is actually a concept derived from wallet applications based on UTXO.UTXO represents unspent transaction output, which is the core of Bitcoin transaction generation and verification.
Each transaction in Bitcoin consists of input and output, each transaction spends one or more inputs and produces a new output.These newly generated outputs then become new UTXOs, waiting for future transactions to consume.
As a minimalist asset transfer and settlement technology architecture, the UTXO model is difficult to scale to support complex features such as smart contracts.
2. Non-Turing-complete scripting language
Bitcoin’s scripting language does not support all types of computing, because the lack of loop and conditional control statements makes it not Turing-complete.Although this feature helps reduce hacker attacks and improve network security, it also limits Bitcoin’s ability to execute complex smart contracts.
Because of the incomplete design of the Bitcoin system, it needs to rely on external modular expansion for more complex functions. In this regard, Bitcoin’s demand for modularity is undoubtedly more urgent than Ethereum.Functions such as the execution layer, data availability layer, consensus layer, and cross-chain interoperability layer in its ecosystem all need to be encapsulated and expanded in a modular manner.
4.2 Analysis of modular project of Bitcoin ecosystem
4.2.1 Execution Layer – Bitcoin Layer 2
Merlin
Currently, in the second-tier Bitcoin track, Merlin Chain has the highest TVL, reaching billions of dollars, and can be said to be the most attention-grabbing project in the Bitcoin ecosystem.As a Bitcoin Layer 2 network, Merlin Chain supports a variety of native Bitcoin assets, while also compatible with EVM, showing its dual consideration of the Bitcoin ecosystem and the Ethereum ecosystem.
Source: https://defilama.com/chain/Merlin
Merlin’s capabilities revolve around the ZK-Rollup network, decentralized oracle network and on-chain fraud prevention.
ZK-Rollup Network
The core of ZK-Rollups is the use of zero-knowledge proof.Zero-knowledge proof, as an encryption method in cryptography, allows one party (proverb) to prove to the other party (verb) that a statement is correct without revealing any information other than proof that the statement is correct.
Merlin Chain will process and calculate transactions off-chain to avoid high transaction fees and network congestion on the Bitcoin network.At the same time, ZK-rollup can compress multiple transaction proofs into batches. The Bitcoin main chain only needs to verify the single proof of multiple transactions packaged, which greatly reduces the workload of the main chain and improves transaction efficiency.
Decentralized oracle network
Merlin’s decentralized oracle network is equivalent to the role of DAC (Data Availability Committee) to check and ensure that the sorter truthfully publishes complete DA data off-chain.The decentralization of the oracle network lies in the fact that it takes the form of POS, and anyone can run an oracle node as long as they pledge enough assets.This pledge mechanism is very flexible, supports assets such as BTC, MERL, and also supports proxy pledges similar to Lido.
On-chain fraud prevention
Merlin introduced the idea of BitVM, and also adopted the “optimistic ZK-Rollup” mechanism. It can be simply understood that by default that all ZK Proof is trustworthy, the runner will be punished only when an error occurs.Because verification is carried out on the Bitcoin main website, on the Bitcoin chain, due to technical limitations, ZK Proof cannot be fully verified, and a certain step of ZK Proof can only be verified under special circumstances.Therefore, one can only choose to point out that ZKP has errors in one of the calculation steps during off-chain verification and challenges them through fraudulent proof.
4.2.2 Data availability layer & consensus layer
B² Network
The B² Network adopts a modular design, with the Rollup layer (ZK-Rollup) responsible for execution, the Data Availability layer (B² Hub) responsible for storing data, and B² Nodes for off-chain verification. The final settlement layer is the Bitcoin main network.
B² Network’s ZK-Rollup layer adopts a zkEVM solution, which is responsible for performing user transactions within the Layer 2 network and outputting relevant proofs.The Rollup layer is responsible for submitting and processing user transactions, while the DA layer is responsible for storing copies of the aggregated data and verifying relevant zero-knowledge proofs.
Source: https://docs.bsquared.network
B² Hub is an off-chain, DA network that supports data sampling, and is regarded as a pioneer in modular Bitcoin scaling solutions.B² Hub draws on Celestia’s design ideas and introduces data sampling and erasure coding technologies to ensure that new data can be quickly distributed to numerous external nodes and minimize the risk of data withhelds.Additionally, Committer in B² Hub uploads the storage index and data hash of DA data to the Bitcoin chain for public access.
Source: https://blog.bsquared.network
According to the future plan of B² Network, the EVM-compatible B² Hub is expected to become the off-chain verification layer and DA layer of multiple Bitcoin Layer 2, forming a functional expansion layer under the Bitcoin chain.Given that Bitcoin itself cannot support many application scenarios, the method of building functional extension layers off-chain will become an increasingly common phenomenon in the Layer 2 ecosystem.
B² Hub, the first modular third-party DA layer of Bitcoin, can help other Bitcoin Layer 2 to use the Bitcoin main chain as the final settlement layer and inherit the security of Bitcoin, which is conducive to promoting the expansion of the Bitcoin network andEnhance the diversity of its applications.
5. Summary
The slogan “Modular is the future” is gradually turning from concept to reality.Modular blockchain technology, with its flexibility and scalability, provides a solid foundation for building the next generation of decentralized applications.This technology allows developers to select and combine different modules according to specific needs, thereby creating a more efficient, secure and easy-to-maintain blockchain solution.
The rise of modular blockchain represents a more “soulized” pluggable product idea.Under this idea, blockchain is no longer regarded as a closed system, but an open and scalable platform where various services and functions can be easily inserted and unplugged like Lego bricks.This flexibility allows developers to quickly build and deploy blockchain solutions according to the needs of specific application scenarios.
Originating from the Ethereum ecosystem and then showing its strengths in the Bitcoin ecosystem, modular technology has already demonstrated its skills in various tracks of the cryptocurrency industry.
For example, Chromia, a modular public chain using “relational database” technology, cooperated with My Neighbor Alice, Chain of Alliance and other games in the gaming field; on the RWA track, Chromia created the Ledger Digital Asset Protocol (Ledger Digital Asset Protocol).Several projects have adopted the agreement.
In the field of AI, CARV focuses on building modular data layers for AI and Web3 games, ensuring privacy and security in data processing by leveraging technologies such as trusted execution environments (TEEs) and zero-knowledge proofs.
With the continuous maturity of modular blockchain technology and the expansion of application fields, we have reason to believe that this technology will bring more innovative possibilities to all walks of life.From the birth of Bitcoin to the widespread application of modular blockchain today, we have witnessed how blockchain technology has developed from a single digital currency application to an ecosystem that supports complex and diverse applications.In the future, modular blockchain will continue to promote technological progress and lay the foundation for building a more open, flexible and secure digital world.
References
[1]https://www.panewslab.com/zh/articledetails/qn9zbgmj.html
[2]https://www.chaincatcher.com/article/2115788
[3]https://celestia.org/what-is-celestia/
[4]https://paragraph.xyz/@tokensightxyz/eigenda-a-cryptoeconomic-analysis
[5]https://research.web3caff.com/zh/archives/14476?ref=1&ref=852
[6]https://docs.bsquared.network/architecture
[7]https://web3caff.com/zh/archives/89022
[8]https://blog.chain.link/blockchain-scalability-approaches-zh/#post-title
[9]https://web3caff.com/zh/archives/33958
[10]https://web3caff.com/zh/archives/90232
[11]https://www.theblockbeats.info/news/50536
