Thread by @TheCryptoRub

1/ Today, I will try to explain in the simplest way possible what a 🧱 modular blockchain is, and why going #BeyondMonolithic is a necessary step for blockchain scalability.

Let's unwind a 🧵.

2/ As you may know, there are 3 challenges blockchains are facing today:

⚡️ Scalability: Throughput of the system.
🌐 Decentralization: How many nodes are running.
🔐 Security: Attack vulnerability.

No monolithic blockchain managed to properly balance all 3 simultaneously yet.

3/ To work properly, a blockchain has different but complementary functions to handle:

🌐 Consensus
💿 Data Availability
🔒 Settlement
⚙️ Execution

Handling these 4 functions at the same time on a single layer makes a blockchain monolithic, which most blockchains are today.

4/¹/₂ Being monolithic implies that a full-node runner will have to:

☝️ Check for consensus
✌️ Check transactions validity

This limits a monolithic blockchain by the resource capacity of its nodes and makes it nearly impossible to balance properly the above blockchain triangle

4/²/₂ The trap here, in which most monolithic blockchains fall, is the use of external resources that will increase throughput at the expense of security and decentralization.

5/¹/₂ This is where Modular blockchains enter the game 🧱

@CelestiaOrg defines them as blockchains that fully outsource at least one of the following components to an external chain:

- Execution
- Settlement
- Consensus
- Data availability

@CelestiaOrg 5/²/₂ Instead of handling the functions we mentioned above in a single layer, modular blockchains split the work into different layers.

Let's go over 2 of them 👇

@CelestiaOrg 6/ @CelestiaOrg is the first modular blockchain network focusing on a Consensus Data Availability layer. This will allow anyone to create their own blockchain and focus on DApps deployment.
blog.celestia.org/ethereum-off-c…

@CelestiaOrg 7/ @fuellabs_ is building Fuel, the fastest modular execution layer (or “MEL”). A MEL can be defined as a verifiable (fraud provable) computation system that is designed for a modular blockchain and high data availability.

https://twitter.com/fuellabs_/status/1516054397406511106

@CelestiaOrg @fuellabs_ 8/ Going Modular has a set of non-negligible advantages. Let's go over some of them 👇

@CelestiaOrg @fuellabs_ 9/ Scalability: Splitting up into multiple specialized layers allows modular blockchains to implement scalability mechanics that significantly increase the throughput, which may have required security or decentralization sacrifices with a monolithic architecture.

@CelestiaOrg @fuellabs_ 10/ Flexibility, cost efficiency, and speed: The separation of resources makes it drastically cheaper to deploy smart contracts, and easier to experiment with different execution environments.

@CelestiaOrg @fuellabs_ 11/ A good example of speed and efficiency is SwaySwap, a blazingly fast Uniswap-like DEX running on a modular execution layer devnet (cc. @fuellabs_).
fuel-labs.ghost.io/introducing-sw…

@CelestiaOrg @fuellabs_ 12/ If you want to deep dive into modularity, check out (cc @0xRainandCoffee & @Maven11Capital):
rainandcoffee.substack.com/p/the-modular-…