Blockchain Modularity: Reshaping the Industry Landscape and Future Development Direction

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Blockchain Modularization Trends and Industry Landscape Evolution

Blockchain technology is evolving towards a modular direction, which includes projects based on the development of Cosmos technology, as well as Ethereum L2/L3, Bitcoin L2, and cross-chain fields. Although these projects have different focuses, they are all breaking the boundaries of traditional monolithic chains, pushing the industry towards partial integration.

In this trend, the competitive landscape is changing. The original technological barriers are gradually being broken down and recombined in the process of integration. This means that the uniqueness of Blockchain projects is becoming increasingly important, otherwise they may lose their foothold in the wave of modularization.

Industry Development Forecast

  1. The next 2-3 years will be a chaotic period for modular Blockchains. The DA layer, execution layer, and even the settlement layer will experience intense competition. After this phase, some foundational projects will emerge, constituting the underlying infrastructure of the crypto space. These infrastructures will form deep technological barriers over time.

  2. The entry window for new high-performance blockchain projects will essentially close. Unless there is a breakthrough technology, the narrative of standalone blockchains will basically end. New entrants will find it difficult to gain market position.

  3. Existing high-performance single chains need to find an irreplaceable position. Under the trend of modularization, high-performance public chains are under significant pressure, and compared to security, the irreplaceability of performance itself is relatively weak.

  4. Ethereum will also face challenges, especially at the DA layer and execution layer. However, due to possessing the most scarce resource in the crypto space (security), Ethereum still holds an indispensable position.

  5. The possible evolution path is that Ethereum and Bitcoin will provide the most fundamental settlement layer services for the entire cryptocurrency space. A few L1 projects may have the opportunity to participate in some settlement layer functions. The DA layer will experience sufficient competition, with participants including Ethereum, Celestial, Near, Avail, and others. The execution layer is mainly concentrated in Ethereum L2 (such as Optimism, Arbitrum, StarkNet, zkSync, etc.), high-performance public chains (such as Solana, Avalanche, Aptos, Sui, etc.), and an upcoming batch of Bitcoin L2 projects.

Long-term Outlook for the Industry

With the development of modular Blockchain, Ethereum and Bitcoin are gradually evolving into providers of underlying security services. Other DA layers, execution layers, and settlement layer projects will provide different levels of services to meet various application needs.

The diversification of blockchain is mainly reflected at the application layer, rather than the infrastructure level. While the infrastructure will maintain a certain degree of decentralization, it will not present a flourishing situation.

After this round of modular cycles, the competition in blockchain infrastructure will tend to ease. In the next decade, the competition at the application layer of cryptocurrency will become even more intense, involving various fields such as gaming, social, DeFi, NFT, AI, and shared services. This marks the beginning of large-scale applications in the cryptocurrency field, which is expected to gradually be realized in 2-3 years.

From 2009 to 2026, this nearly 20-year period can be seen as the wild era of the cryptocurrency field. Although this period is filled with speculative behavior, the underlying infrastructure has been continuously improved, laying the foundation for the large-scale application of cryptocurrencies.

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RektRecoveryvip
· 19h ago
another predictable vulnerability surface expansion... when will they learn that modularity = more attack vectors smh
Reply0
Token_Sherpavip
· 19h ago
yet another modular buzzword season... seen this movie before tbh
Reply0
HodlVeteranvip
· 19h ago
Just like back in the day when driving a trap, this wave of integration also requires being cautious.
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RektDetectivevip
· 20h ago
Another round of transformation, half of the projects are dead, and only the real players are left.
View OriginalReply0
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