How Solana Wins the Endgame vs. Modular Chains

Key Insights

• The general consensus among the crypto community is monolithic blockchains, wrapping transaction execution, network consensus, proof settlement, and data availability on one mainchain, are not the best way to scale a blockchain.
• Chains with modular visions, such as Ethereum, and chains that focus on one or two areas of the blockchain stack, such as Celestia or Fuel, are seen as the most likely way to solve the scalability trilemma.
• We explore the many ways a monolithic chain like Solana can still potentially be the dominant chain of the future.

Since the genesis of the crypto industry, there have been arguments about the best approach to build a digital distributed ledger. Big blocks versus small blocks. Account-based versus UTXO. Smart contract enabled versus non-smart contract enabled. There has been no shortage of disagreements and debates in the 14 short years since the Bitcoin whitepaper.

The latest in a long line of debates is whether Layer-1 (L1) blockchains should be monolithic (wrapping transaction execution, network consensus, proof settlement, and data availability on one mainchain) or modular (outsourcing some of these functions to Layer-2s or other chains). To date, the monolithic approach has limited either speed, decentralization, or security, in short not addressing the scalability trilemma. Modular blockchains have shown promise in better addressing these issues.

With many popular chains pursuing the modular route, many are ready to call this fight early. But perhaps we shouldn't be so quick to believe modular chains have already won.