The Cost of Ignoring Separation of Concerns

Monolithic chains force all activity—execution, consensus, data availability—onto a single layer. This creates a zero-sum game for block space, leading to predictable failure.

• Result: $100M+ in daily MEV and $50+ gas fees during peaks.
• Example: Ethereum pre-rollups, Solana's recurring outages under load.

Decouple execution, settlement, consensus, and data availability into specialized layers. This is the first-principles solution adopted by Ethereum+Rollups, Celestia, and Avail.

• Scalability: Parallel execution layers enable 10,000+ TPS.
• Innovation: Teams can iterate on execution (e.g., FuelVM, Eclipse) without forking security.

Monolithic security is wasteful; you pay for full-node validation of every trivial transaction. Modular designs let you pay only for the security you need.

• Efficiency: A rollup inherits Ethereum's security for ~0.001% of its cost.
• Choice: Use Ethereum for high-value assets, Celestia for high-throughput apps.

Monolithic chains create walled gardens. True modularity requires robust, trust-minimized communication, which monolithic designs cannot provide natively.

• Solution: Cross-chain messaging protocols like LayerZero, Axelar, and Wormhole become critical infrastructure.
• Risk: Ignoring this creates fragmented liquidity and poor UX.

Building on a monolithic chain means your app's performance is hostage to every NFT mint and meme coin launch on the same chain. Resource isolation is non-negotiable.

• Modular Fix: Dedicated execution environments via rollups-as-a-service (e.g., Conduit, Caldera).
• Outcome: Predictable costs and guaranteed throughput.

Monolithic designs lock $100B+ in staked capital to secure all functions. Modularity allows capital to be specialized and re-staked for optimal yield and security.

• EigenLayer & Babylon: Enable re-staking of ETH and BTC to secure new chains.
• Impact: Unlocks trillions in idle security capital.

Solana's design tightly couples execution, consensus, and data availability for raw speed, achieving ~400ms block times. This creates a single point of failure where network congestion in one layer cripples the entire system, as seen in repeated >12-hour outages during memecoin frenzies. The monolithic validator requirement also creates ~$100k+ hardware costs, centralizing infrastructure.

Avalanche subnets allow projects to launch their own blockchains but force them to become their own security providers and data availability layers. This fragments security and liquidity, creating isolated pools of ~$50M TVL instead of a unified base. Teams must bootstrap their own validator sets, leading to highly centralized, permissioned chains masquerading as decentralized networks.

Polygon's legacy PoS chain uses a centralized checkpoint layer on Ethereum for finality, creating a two-tier security model. While this reduces costs, it means the chain's ~$1B TVL is ultimately secured by a 5-of-8 multisig. This is a direct compromise: cheaper transactions in exchange for trusting a council, violating the sovereign security guarantee of Ethereum L1.

BNB Chain's 21-validator Proof of Staked Authority model optimizes for throughput by sacrificing decentralization and credible neutrality. This creates a regulatory and technical single point of failure. The chain's ~$5B DeFi TVL is subject to centralized transaction filtering and the existential risk of validator coercion, demonstrating the high cost of bundling chain governance with core protocol operations.

The initial Optimism design featured a single, centralized sequencer to provide low latency and transaction ordering. This created a ~$30M+ per year MEV monopoly and introduced a critical liveness dependency. Users traded decentralization for a ~2s confirmation time, a compromise that later required a complex, multi-year decentralization roadmap to undo.

Cosmos's IBC enables sovereign chains but forces each to bootstrap its own security and liquidity. This leads to the "App-Chain Trilemma": sovereignty, security, or shared liquidity—pick two. Chains like dYdX V3 migrated away to gain liquidity, while others like Celestia emerged to solve the shared data availability layer they all lacked.

Bundling execution, consensus, and data availability creates a single point of failure for cost and performance. Every dApp competes for the same constrained resources.

• Result: Congestion fees spike to $100+ during memecoin frenzies.
• Consequence: Innovation is stifled as only simple, high-value transactions are viable.

Decouple the blockchain stack into specialized layers: execution (Rollups), consensus/settlement (L1/L2), and data availability (DA).

• Benefit: Execution layers like Arbitrum and Optimism scale independently.
• Benefit: DA layers provide ~$0.001 per KB data posting, enabling ultra-low-cost L2s.

Shift from transaction-based to outcome-based user interactions. Users declare what they want, not how to do it.

• Benefit: Solvers compete for optimal execution across Uniswap, 1inch, and Across.
• Benefit: Eliminates MEV extraction and failed transactions, improving UX and yield.

Outsource block production and ordering to a neutral, decentralized network separate from execution.

• Benefit: Enforces atomic cross-rollup composability (e.g., swap & bridge in one block).
• Benefit: Prevents single-rollup sequencers from censoring or exploiting MEV.

Treating bridges as afterthoughts creates $2B+ in security holes. Interoperability must be a native, verifiable primitive.

• Solution: Light client bridges like IBC and validity-proof systems (zkBridge).
• Mandate: Move beyond trusted multisigs to cryptographic security.

Stop funding the 100th monolithic L1. Capital must flow to teams building critical, reusable infrastructure.

• Target: DA layers, shared sequencers, proof systems, intent solvers.
• Outcome: Creates a composable ecosystem where applications are mere integrations, not kingdoms.