Modular blockchain Celestia has been steadily growing by 717% in less than half a year, earning the title of “Ethereum Killer” and generating strong interest in the market for modular blockchains. This article compiles a list of other modular blockchains worth paying attention to, in addition to Celestia.
Table of Contents
1. Solving the “Impossible Triangle” Problem with Modularity
2. Which Modular Blockchains Have Potential?
– Celestia (TIA)
– Mantle Network (MNT)
– SKALE Network (SKL)
Introduction:
Modular blockchains aim to achieve decentralized scalability of blockchain networks by completely outsourcing at least one of the four components – execution layer, settlement layer, consensus layer, and data availability layer – to external chains without compromising network security. Celestia, the first modular blockchain network, has gained significant attention in the market since its mainnet launch on October 31st, with its native gas token TIA skyrocketing from around $2 to nearly $16 on January 22nd. With a stable growth of 717% in less than half a year and a market capitalization of $2.5 billion, Celestia has climbed to the 37th position on the cryptocurrency market cap rankings, becoming the only modular blockchain to enter the Top 50 and attracting capital to recognize the potential of this field.
In 2023, several modular blockchain projects received new investments, including Eclipse, AltLayer, Sovereign, and Dymension. In this article, we will introduce the concept and application scenarios of modular blockchains and highlight the high-profile potential projects.
Background:
Modular blockchains aim to solve the “Impossible Triangle” problem. In the initial design of blockchain, both Bitcoin and Ethereum belong to monolithic blockchains, where each transaction is recorded in blocks through specific consensus mechanisms to achieve decentralized, trustless, and immutable distributed ledger networks. A monolithic blockchain consists of four functional layers:
– Consensus: determining the content and order of transactions
– Execution: supporting transaction execution and deployment and interaction with smart contracts
– Settlement: used for transaction completion, dispute resolution, proof verification, and bridging between different execution layers
– Data Availability (DA): ensuring the availability of transaction data
For monolithic blockchains, all four functional layers are on a single chain, and the network has to bear all the tasks. This creates the “Impossible Triangle” for monolithic blockchains, where only two out of the three characteristics – scalability, decentralization, and security – can be satisfied on the chain. Most Layer 1 networks currently sacrifice decentralization to ensure network security and scalability, while Ethereum insists on decentralization and security while relying on compatible Layer 2 networks for scalability.
However, with the increasing transaction volume and the growth of decentralized applications (dApps), these monolithic blockchains still face frequent transaction congestion, resulting in rising transaction costs that not only hinder application operation but also impact user experience.
To solve the “Impossible Triangle” problem, developers have proposed the solution of “modular blockchains.” By aggregating and combining different layers of the blockchain architecture in a modular way, modular blockchains can be flexibly expanded as needed without compromising the fundamental principle of decentralization. This allows for improved performance, enhanced scalability, and diversified application scenarios.
The concept of modular blockchains can be traced back to the 2018 whitepaper “Data Availability Sampling and Fraud Proofs” co-authored by Mustafa Albasan and Vitalik, which describes how to address the scalability problem of blockchains without sacrificing security and decentralization. The method involves allowing light clients to receive and verify fraud evidence from full nodes and designing a data availability proof system to reduce the trade-off between chain capacity and security.
Currently, Rollups and sharding technologies are transitioning Ethereum’s ecosystem towards modular blockchains. Rollups provide a separate layer for execution, extending the monolithic structure of Ethereum. They can execute and package multiple transactions using powerful computers before compressing the data and sending it back to the Ethereum mainnet for verification. Sharding, on the other hand, implements scalability at the Layer 1 by dividing the Ethereum main chain into different shards and rotating validators among these shards. Each shard essentially functions as its mini blockchain and operates concurrently with the beacon chain. Through sharding, Ethereum can significantly increase transaction throughput and scalability to meet the growing user demand.
Which Modular Blockchains Have Potential?
As of now, the Web3 asset platform RootData has included 36 modular blockchain projects, with Cube and Assembly being in a “dead” state while the rest are steadily under construction.
Among these projects, five modular blockchain projects have had their market values tested in the circulating market and ecosystem.
Celestia (TIA):
Celestia is the first modular blockchain project that focuses on data availability. Similar to Layer 2 scalability solutions for Ethereum, Celestia releases newly generated data to the Celestia chain instead of directly to Ethereum, saving over 90% of transaction fees. Data Availability Sampling (DAS) is a crucial feature of Celestia, allowing users to confirm the existence of a large number of data blocks without downloading the entire blockchain. This technology greatly improves scalability and security. Celestia also provides convenience for building independent, self-managed blockchains called sovereign rollups, benefiting from the security offered by the Celestia network. The Blobstream feature integrates Celestia’s modular data availability layer with Ethereum, enabling Ethereum developers to build efficient and high-throughput Layer 2 solutions.
Circulating Supply: 159,016,130 TIA
Total Supply: 1,017,972,603 TIA
Current Price: $15
All-Time High: $20.26
All-Time Low: $2.03
Mantle Network (MNT):
Mantle Network is an L2 scalability solution based on Optimistic Rollup technology, offering EVM compatibility and modular design. Incubated by BitDAO, Mantle Network utilizes roll-up technology and a decentralized data availability layer (Mantle DA) to provide high throughput, low-cost, and fast settlement services while ensuring Ethereum-level security.
Circulating Supply: 3,162,441,863 MNT
Total Supply: 6,219,316,795 MNT
Current Price: $0.64
All-Time High: $0.8488
All-Time Low: $0.3136
SKALE Network (SKL):
SKALE Network is a Layer 2 scalability solution that uses sidechain environments to enhance the performance of decentralized applications (dApps) on the Ethereum network. SKALE enables developers to execute smart contracts at high speed, high throughput, and extremely low cost. SKALE Network is deeply compatible with Ethereum and is not subject to Ethereum’s storage and computational limitations. In addition to supporting thousands of independent chains with linear growth, SKALE supports various types of elastic sidechains, storage chains, and other types of subchains.
Circulating Supply: 5,134,227,671 SKL
Total Supply: 5,447,166,667 SKL
Current Price: $0.06
All-Time High: $1.22
All-Time Low: $0.01
More information on the economic models and tokens of modular blockchains is still in the testing phase, with some projects preparing for mainnet launch or attracting ecosystem applications. Active modular blockchain networks include AltLayer, which recently landed on Binance Launchpool. AltLayer is a highly scalable application-specific execution layer system with multiple execution layers similar to optimistic rollups (called Flash Memory Layers). All transactions obtain security from the underlying L1/L2, making it designed for a modular and pluggable framework for multi-chain and multi-VM worlds. The network’s scalability has been enhanced.
Fuel, on the other hand, is the earliest Optimistic Rollup deployed on the Ethereum mainnet. Since the launch of its V1 version at the end of 2020, Fuel has been a UTXO-based blockchain that excels in parallel execution. It provides scalability by using a different execution model than EVM, featuring a highly parallelized minimal execution system based on UTXO. It supports ETH and all ERC-20 tokens and has already attracted 36 top-tier applications within its ecosystem, including DeFi, DEX, stablecoins, games, NFTs, and Web3 domains.
It is worth noting that many high-profile modular blockchains have received investments from CEXs (centralized exchanges). Additionally, some modular blockchains have gained attention and even investment from mainstream blockchain ecosystems, while others have already launched their mainnets and generated a multitude of applications.
References:
– Celestia vs. Cosmos: A Comparison of Core Architecture, Application Scenarios, and Token Value
– Detailed Explanation of Celestia’s Core and Economic Model: Is the Narrative of Modular Blockchain Set to Explode?
– Without Celestia, Can Ethereum Expand with Rollup?
(Images and additional related reports are available in the original article)