As blockchains have increased in popularity, their designs have also changed. Different chains like Ethereum have had to adapt to keep with demand, and one of those major shifts has been in modular blockchain designs.
It’s regarded as one of the best blockchain scalability solutions as it makes it easier to handle transactions and manage parts of the chain without affecting others.
However, the switch from the original blockchain design means a few trade-offs, and it’s good for developers to understand how the two work. It makes it easier to choose the most suitable approach based on the needs of their applications.
What a monolithic blockchain looks like
A monolithic blockchain is essentially what most of us picture when we think of a blockchain. It’s a network that handles all activities in a single system. Everything from running smart contracts to data storage is done on a single layer or chain.
A good example of this is Bitcoin, the original blockchain. All its activity is handled within the same chain, which means that each node does everything from execution to ensuring data is available.
Older Ethereum also worked in the same way, but the blockchain has been slowly moving to a modular level since 2024.
What a modular blockchain looks like
In modular blockchains, the core functions of the blockchain are split into different layers, mostly three or four. Each layer has a specific task, but they are all coordinated to ensure they behave like a single chain.
The layers are:
- Execution – It’s where transactions are executed. Smart contracts also run here, mostly using separate chains (rollups).
- Consensus layer – It’s responsible for ordering blocks or batches of transactions, then validating them.
- Data availability – It ensures that all transactions are published and available to any network participant.
Since these are all separate layers, a developer can scale or optimize one layer, and it won’t affect the others.
The advantages and disadvantages of monolithic blockchains
Advantages
- Simplicity and clarity – Since everything is within one system, it’s easy for everybody concerned, including users, to follow how the network works. There’s no need to worry about the coordination of multiple layers.
- Built-in security – Security is tightly controlled since everything happens within the same network. There’s no need for additional security mechanisms.
- Consistency and finality – Since all parts operate together within the same system, all changes to the system are uniform and predictable.
Disadvantages
- Limited scalability – The fact that everything is crammed into the same coins means that things can slow down where the traffic is high. This also makes transactions quite expensive.
- Harder to innovate quickly – When making changes to a single layer, you’ll affect other functionalities. This discourages innovation.
- Resource-intensive nodes – Every node in the system has to do everything, so you need more powerful hardware and high bandwidth.
- Trade-offs between performance and security – There’s the blockchain scalability trilemma that would mean sacrificing a bit of either security or decentralization.
The advantages and disadvantages of modular blockchains
Advantages
- Scalability – Increasing transactions only affects the execution layer, so you can expand it as necessary without worrying about the other layers.
- Flexibility for developers – Since developers have a separate execution environment, they are free to experiment and innovate. Their activities won’t affect the rest of the network.c
- Specialization and optimization – A developer is free to optimize and experiment with their apps as they have a degree of independence.
- Improved long-term adaptability – Changes done on one layer don’t have to affect others, so it’s easier for the networks to evolve over time without major migrations. In the end, users get cheaper transactions.
Disadvantages
- Increased complexity – Everything has to work closely together, so adding a new layer introduces design and operational complexity.
- Security considerations shift – Each layer has to be secure, which means security is now distributed across multiple components. Even though the consensus layer is still used for finality, you need to ensure there’s no misalignment that can introduce vulnerabilities.
- Still emerging technology – Modular blockchain technology is still not mature, so developers can encounter unexpected changes
How to choose between monolithic and modular blockchains
You can’t really say one design is better than the other. Modular blockchains are helping solve some of the biggest problems of monolithic blockchains, but that doesn’t mean they are a complete replacement. What matters most is what you are trying to solve.
If you are working with a small network or application that has predictable activity, monolithic blockchains will give you a bit more stability and security. But if you expect high transaction volumes or continuous growth, modular blockchains will allow you to scale and perform upgrades much more easily.