An Analysis of Three Modular Blockchain Solutions: Celestia, Dymension, and Fuel

Original Title: 《Modular Blockchain Ecosystem Overview》

Author: Kadeem Clarke

Compiled by: Deep Tide TechFlow

Blockchain has been evolving, with each iteration attempting to solve the trilemma of decentralization, scalability, and security. Blockchains like Bitcoin, Ethereum, and Solana have a monolithic structure and four main functions: data availability, consensus, settlement, and execution.

As these functions compete for the same resources, monolithic blockchains will inevitably encounter the following scalability issues.

Modular blockchain solutions like Celestia, Dymension, and Fuel provide developers with a wide range of options to not only scale blockchains but also achieve cross-chain interoperability.

The concept of building modular blockchains is still relatively new, so it will be interesting to see which existing chains are beginning to adopt similar approaches.

The efficiency of modular blockchains is enhanced as they concentrate validators on shards, increasing the throughput of the blockchain.

Here are some advantages of modular blockchains:

• Sovereignty
• Scalability
• Ease of building projects

Celestia

Celestia focuses on scaling blockchains and has raised $55 million to fund its expansion plans. Celestia is creating a unique modular blockchain architecture to address scalability and deployment issues.

The Celestia team aims to make blockchain deployment simple for everyone. Therefore, Celestia's modular blockchain architecture prioritizes the following aspects:

• Enhanced scalability
• Shared security
• Sovereignty issues

Developers can choose their own execution environments, such as Solana VM and EVM. Celestia also offers a grant for modular builders. They listed three blockchain projects as users of its data availability layer in a recent funding announcement:

• Eclipse
• Constellation
• Dymension

The project also provides $3,000 per month for three months to 26 members of the "Modular Researcher Queue." Scott Sunarto, who has worked at the Ethereum Foundation and Uniswap Labs, is one of the recipients.

Celestia is still in the early stages of development. The development team released an MVP notification in 2021 and launched the testnet in November 2021. 2022 was even more significant as the project launched the testnet and gradually built the mainnet.

Dymension

As part of the Cosmos ecosystem, this modular settlement layer provides the launch of Enshined Rollups (Rollup logic integrated into the protocol), opening up decentralized use cases.

Dymension is a sovereign Rollup built on Cosmos, designed to simplify the development of RollApps (Rollups focused on custom applications) through Dymension Chain (settlement layer), RDK (RollApp Development Kit), and IRC (Inter-Rollup Communication).

Dymension is optimized for maintaining Rollup state, validation, and fraud proofs while only accepting Rollup transactions and basic transfers.

On Dymension, developers can focus on business logic requirements and quickly deploy application-specific Rollups using RDK and a dedicated settlement layer while benefiting from IRC, shared security, and data availability.

Dymension RollApps, like Cosmos, aim to create blockchains for specific applications to reduce consensus overhead. Based on Cosmos-SDK, RDK adds new modules and modifies existing ones to ensure RollApp compatibility with the Dymension protocol while remaining compatible with other Cosmos ecosystem tools. RollApps can communicate with any IBC-supported chain through the Dymension Hub.

Fuel Labs

Fuel Labs is building a fast execution layer for a modular blockchain stack. Fuel has seen significant growth as the project brings together some of the best engineers.

Fuel's technology is built on three pillars:

• Parallel transaction execution: Fuel provides top-tier processing power through parallel transaction execution.
• Fuel Virtual Machine (FuelVM): FuelVM expands the design space for developers.
• Exceptional developer experience (using Sway and Froc): Fuel's domain-specific language, Sway, offers a unique and streamlined developer experience. Fuel also has a supporting toolchain called Forc.

Fuel aims to be a self-driving force. Developers can build without intermediaries. It offers an alternative to modularity and Ethereum's future. Ethereum is moving towards a Rollup-centric direction. Fuel claims it can scale the execution layer beyond standard Rollups. The team asserts they can do this without compromising security and at a low cost.

Because Fuel is designed for fraud proofs, the resource requirements for full nodes may be higher than usual, increasing bandwidth capacity while allowing users to verify the chain through trust-minimized light clients.

Benefits of Modular Blockchains

Scalability

Monolithic blockchains allow users to place all expected blockchain functions on a single layer known as Layer 1. This makes it challenging to create a blockchain as it attempts to handle all functions simultaneously within a single layer. Modular blockchains share different functions across various layers, enhancing scalability and preventing network interruptions.

Simplified Blockchain Creation

To launch a new blockchain, miners must deal with security and decentralization issues, which may deter some from optimizing the network's hash rate (opportunity). When miners focus less on specific functions (like consensus), they can leverage the layout and create new blockchains more quickly, regardless of the blockchain architecture.

Flexibility

The layout of modular blockchains is much more flexible than that of monolithic blockchains. Its purpose is to provide miners with functionalities that are not available on monolithic blockchains.

Conclusion

With the development of Layer 2 and Rollups, Ethereum's ecosystem is shifting towards a modular architecture.

One of the biggest barriers to the widespread application of blockchain technology is scalability.

Layer 1 scaling solutions focus on block production rather than block validation. Modular blockchain infrastructure is designed to facilitate the adoption of Web 3 with characteristics of scalability, security, and decentralization, focusing on ease of integration, rapid delivery, and user experience.