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Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news’ editorial. The first smart contract blockchain, Ethereum, was monolithic by design, meaning it manages its own execution, settlement, consensus, and data availability. Over the years, new decentralized applications developed, leading to increased demand for blockspace. When the demand for blockspace is more than its supply, the constrained availability restricts the range of potential applications, causing a significant impediment to utility and widespread adoption.  This limitation is called the scalability trilemma or, in a nutshell, the idea that no public blockchain can simultaneously achieve maximum decentralization or security to achieve optimal scalability. To overcome the limitations of the scalability trilemma, modularity has emerged as a way of outsourcing core components optimized to solve critical functions.   The courtesy of the Inco’s team The modular blockchain thesis centers on role specialization. It proposes decentralizing traditional blockchain functions—like execution or data availability—across specialized networks. By segmenting these functions from a singular L1 into distinct layers, blockchains can be tailored for optimal performance in specific areas, significantly boosting customization, efficiency, and, where necessary, decentralization, security, and scalability.  Given the diverse range of use cases, these functions can be different. A modular network could be specialized to push oracle price feeds, provide zero-knowledge proving services, make available data, or enable a more scalable execution layer on top of another underlying blockchain. The need for modularity in the crypto industry Ethereum exemplifies the gradual transformation into a modular world. The chain was first launched with a monolithic design, following in the footsteps of Bitcoin. Arbitrum, a layer-2, represents the success story of rollups in separating the intensive computation needed for scalability off-chain while settling back on-chain. Many more projects have adopted this design thanks to…

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Filed under: News - @ May 19, 2024 12:22 pm