Blockchain Technology: Monolithic vs. Modular
A blockchain that is monolithic fulfills all functions of the blockchain, including execution, consensus, and data availability. Consensus refers to nodes agreeing on the state and ordering transactions, whereas execution refers to the calculation of transactions. All blockchain data is published and available to everyone thanks to the consensus layer and data availability.
With its innovative Proof-of-History mechanism, Solana is a monolithic layer-one (L1) smart contract protocol designed to improve network performance and scalability. The native coin SOL, an SPL token that functions similarly to the well-known Ethereum ERC-20 tokens, underpins the Solana ecosystem. Solana can support a developing decentralized financial (DeFi) ecosystem by hosting decentralized applications (dApps), markets, and other protocols through the SOL token.
In terms of network fees, modular chains offer potential advantages over monolithic systems. All transactions in a monolithic chain compete for the same blockspace, regardless of what other chain members are doing. A modular strategy, however, can be optimized for various applications and thus more effectively price resources.
For throughput, a rollup’s TPS is reliant on its L1’s data capacity. Theoretically, rollup throughput increases as L1’s data capacity increases. The cap is reached after an L1 exhausts its data capacity for the rollup; no more transactions may be completed after that point. As a result, the availability of data is now the limiting element for a blockchain’s scalability.
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Data Availability Layers act as a DA/shared security layer for rollups. By specializing in scheduling transactions and optimizing the DA capacity as a solution to this problem. The majority of the time, they produce a proof for L1 clients. Examples like Celestia and Polygon Avail just offer large data storage capacities. Rollups merely improve execution.
Due to competition for the same small amount of block space from all dApps and use cases, monolithic chains suffer. There cannot be efficient resource pricing like in modular chains or resource compartmentalization. This implies that, for instance, a top Solana dApp like Serum—a DEX that depends on lightning-fast transactions and low latency—will probably experience more competition for block space as NFT usage and minting increase, to its harm. Despite having very different blockchain requirements to serve very different consumers at very different frequency, the two use cases are equally legitimate. There is nothing a monolithic chain can do to change this.
On the other hand, the majority of contemporary blockchains already use or plan to use a modular approach to their chains and the scalability problem. Everybody from Ethereum PoS and rollups to Polkadot, Cosmos, Avalanche, Celestia, Polygon, NEAR. And others are working on various scaling strategies that divide the blockchain’s total work. Among various layers and nodes in order to achieve higher throughput than a single node.
