Scaling Without Sacrifice: How Modular Engines Are Changing Blockchain Economics

There has always been a trade-off necessary to provide solutions: Chains that are faster can become centralized; Layer 2 rollups can become complex and fragmented. However, it is not necessary to compromise. A new breed of modular execution engine holds hope of a scaling solution that will not require cost, speed or interoperability compromises.

The Problem with “Big” Scaling

Scale has been the subject of some projects that have focused on larger block sizes or transaction batching through rollups. Though efficient in tripping up throughput, these strategies hold latent costs: high compute requirements, falling behind latency, and fragmented ecosystems. The result? Users and developers encounter cumbersome infrastructure and unpredictable charges, a formula that will not lead to any efficiency. The issue crypto requires is affordable scaling which does not criminalize its own practitioners.

Modular Execution: A New Layer of Efficiency

In comes the decoupling of execution and consensus and data layer: modular execution, and the economics changes. Transactions can be verified by validators more efficiently, the mempool does not fill up with the unconfirmed transactions as much and users are happier as they pay lower gas fees. And best of all there are no new chains initiated. Rather, an execution layer is overlaid in a modular way on top of networks of existing chains, with no forklift upgrade, and the original network remains intact.

Some forward-looking teams, like Altius Labs, are already working in this direction. They are developing modular execution engines which are intended to be performance-oriented execution engines, and are to be used in existing blockchain tech stacks and can be plugged in. Such bolt-ons have the added advantage of giving access to higher throughput and a degree of interoperability, without the need to commit to hard-fork upgrade to existing chains or the need to entirely re-build them. This is far more sensible way of considering a scalability upgrade as an additive rather than a bet-the-farm endeavor.

The Economic Upside

It is not only the technological effect that will be caused by modular execution, but it will economically revolutionize it. By having chains of networks with modular execution engines in place they can unleash a cascade of economic impacts throughout the network as a whole:

• Reduced User Transaction Costs: Far less congested, quicker block space reduces the gas fees, making the network friendlier and more pleasant to use, and gives the market built-in pressure to contain fees.
• Reduced Infrastructure Overhead: The resulting reduction regarding frequency of global execution changes means a reduction in the payload and overhead costs to the nodes and grass-roots infrastructure.
• Programmable Liquidity: The cross-shard and cross-chain secure and accessible execution services enable liquidity, operationalizing and increasing capital efficiency of the whole space.
• Better User Experience: A faster processing speed allows an increased UX with lower levels of friction and user abandonment, leading to greater dApp retention.
• Aligned Developer Incentives: Reduced arbitrary restrictions will allow developers to write code that simply works without having to implement inventive or custom scaling technology.

The Long Game: Building a Scalable Blockchain Economy

To shift blockchain out of the narrow sphere into a mainstream technology, blockchain architecture, in its turn, should be composable, agile and affordable. To achieve this new vision, modular execution, at its heart, lets us plot forward the course taken to make blockchain infrastructure more adaptable and upgradeable. It assists as well to change the scope of the discussion on whether to create new chains to maximize existing chains.

The greater reliance on a modular-based chain structure will also mean there is more connectedness and a less vulnerable industry. Modularity, as opposed to fragmented solutions to individual problems, provides a point of unity to scaling.

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Conclusion: Scaling Without Compromise Is Possible

The future of blockchain networks is not necessarily an entirely new thing- it is something that will be refactored at least as much as it has been built. Using modular cores, turbocharged execution, and the startup-style of innovation, the promise of scale without compromise is no longer an idea, just an idea–it is already becoming a reality.