Summary:
- The Two “Religions”: L1s are splitting into two design philosophies. Monolithic chains (like Solana) bundle all tasks onto a single, high-performance layer. Modular chains (like Ethereum’s new roadmap) unbundle tasks into separate, specialized layers.
- The Four Key Jobs: A blockchain does four things: Execution (computing), Settlement (finalizing transactions), Consensus (ordering transactions), and Data Availability (proving data was published).
- Monolithic “All-in-One”: A monolithic chain does all four jobs. The benefit is high composability (everything is in one place), but the con is that a bottleneck in one job (like Data Availability) slows the entire network.
- Modular “Specialists”: A modular design outsources these jobs. For example, an L2 rollup handles Execution, while the L1 (like Ethereum or Celestia) specializes in Consensus and Data Availability.
- The Real Bottleneck: The big, untold problem for scaling isn’t just speed; it’s the Data Availability (DA) Problem. This is the core issue dividing the two camps.
For years, the only question that mattered for a Layer 1 blockchain was “How many Transactions Per Second (TPS) can it do?” This led to a “Bigger Blocks, Faster” arms race. But this approach has a hidden ceiling.
The real debate, the one happening among core developers, isn’t about TPS. It’s about a fundamental disagreement in architecture: should a blockchain be monolithic or modular?
What is a Monolithic L1? (The “All-in-One” Approach)
A monolithic blockchain is the classic model. Think Bitcoin, or more relevantly, Solana.
In this design, a single, ultra-optimized blockchain is responsible for everything:
- Execution: Running the smart contract code (e.g., processing your swap).
- Consensus: Agreeing on the order of transactions.
- Settlement: Declaring the transactions as final and irreversible.
- Data Availability: Storing all the transaction data so anyone can download and verify it.
The primary advantage is tight integration. Since everything happens in one place, applications can interact seamlessly (“atomic composability”), and you get incredibly high throughput and low latency.
The drawback is that the chain is a “jack of all trades, master of none.” All nodes must be powerful enough to do all four jobs, leading to high hardware requirements and centralization risks. More importantly, the entire system is bottlenecked by it’s weakest link which, as it turns in, is Data Availability.
What is a Modular L1? (The “Specialist” Approach)
A modular blockchain unbundles these four jobs into separate, specialized layers that plug together.
Ethereum’s new roadmap is the perfect example.
- Execution: This is outsourced to Layer 2s (Rollups) like Arbitrum, Optimism, and zkSync. They “execute” transactions off-chain.
- Settlement: The L1 (Ethereum) acts as the ultimate settlement layer, where the L2s post their proofs.
- Consensus: The L1 (Ethereum) provides the consensus and security for everything.
- Data Availability: This is the L1’s other critical job. It acts as a giant “data firehose” for the L2s to post their transaction data to.
This model is being pushed even further by new projects like Celestia, which is an L1 designed to do only Consensus and Data Availability, outsourcing execution and settlement to other chains entirely.
Why This is the Real Debate: The Data Availability Problem
This is the topic nobody talks about, but it’s the entire reason for the modular shift.
Here’s the problem: For a Layer 2 rollup to be secure, it must post all it’s transaction data back to the L1. This allows anyone to check the L2’s work and prove fraud. But this data is expensive and bloats the L1. The L1 becomes a bottleneck, not for computation, but for storage.
Monolithic Solution (Solana): “Forget L2s. We’ll just make our L1 so fast and cheap that you won’t need them. We’ll handle all the data and execution ourselves.” This requires extremely powerful and expensive nodes to keep up, risking centralization.
Modular Solution (Ethereum/Celestia): “Let’s not execute transactions on the L1. Let’s turn the L1 into a specialized data dump that is incredibly cheap and efficient at only storing data.” This allows thousands of L2s to flourish, inheriting the L1’s security without clogging it’s execution.
Two Different Futures for Crypto
This isn’t just a technical debate. It’s a philosophical one that presents two totally different futures for Web3:
- The Monolithic Future: A handful of extremely high performance L1s (like Solana) act as “mainframe computers” for the decentralized world. Everything lives on this one super fast chain.
- The Modular Future: A “hub-and-spoke” model (like Ethereum’s) where a secure L1 acts as the “hub” for Consensus and Data, enabling a vast, interconnected ecosystem of thousands of specialized L2 “spoke” chains to build on top.
While most of the market is busy comparing TPS, the real L1 war is a battle of architects. The winner will determine what the internet of value looks for the next decade.