Why Modular Blockchain Stacks Are Attracting Real Capital

Ethereum's ~15 TPS and Solana's $0.25+ average fees during congestion expose the trilemma. Building everything into one layer forces unsustainable trade-offs between security, scalability, and sovereignty.\n- Sovereignty Tax: Apps compete for the same congested blockspace.\n- Innovation Bottleneck: Protocol upgrades require hard forks, slowing progress.

Projects like Arbitrum, Optimism, and zkSync decouple execution from consensus/settlement. They process transactions off-chain and post compressed proofs or data back to Ethereum. This creates dedicated throughput for applications.\n- 10-100x Throughput: ~4,000 TPS achievable vs. base layer.\n- Native Composability: Apps within a rollup share liquidity and state seamlessly.

The final bottleneck is data publishing cost. Celestia and EigenDA provide secure, scalable data availability layers separate from execution. This reduces rollup operating costs by ~90%+ and enables sovereign chains.\n- Cost Foundation: ~$0.01 per MB vs. Ethereum's ~$1,000 per MB (calldata).\n- Sovereign Security: Chains can use their own validator set while leveraging external DA.

Capital follows performance. Derivatives DEX dYdX migrated to a Cosmos app-chain, achieving ~1,000 TPS and sub-second finality. Options platform Aevo runs on a custom OP Stack rollup. This trend unlocks vertical integration.\n- Tailored Economics: Capture MEV, set gas tokens, and control upgrade timelines.\n- Institutional Mandate: Predictable, high-performance infra is a prerequisite for large-scale capital.

Investment has pivoted from L1 tokens to foundational modular infra. Celestia ($55M raise), EigenLayer ($100M+), and AltLayer ($14M) secured major rounds. The thesis: owning the base layer of the modular stack captures value from all chains built on top.\n- Infra-as-a-Service: Recurring revenue from rollup sequencing and DA fees.\n- Protocol Capture: Modular components become standard dependencies, akin to AWS for web3.

Fragmentation is the new challenge. Protocols like LayerZero, Axelar, and IBC become critical to connect modular chains. Standardized interfaces (like the OP Stack) allow for shared security and liquidity across sovereign environments.\n- Universal Liquidity: Intent-based bridges like Across and Circle's CCTP enable capital flow.\n- Composable Security: Shared sequencer sets and restaking via EigenLayer reduce bootstrap costs.

Decouples data availability (DA) from execution, creating a new market for cheap, secure block space. Its light-client architecture enables 1,000x cheaper L2 data posting than Ethereum calldata.

• Enables sovereign rollups with independent governance and upgrade paths.
• Data availability sampling allows nodes to verify massive blocks with minimal hardware.
• Foundation for a multi-chain ecosystem where execution layers compete on a shared security and data layer.

Ethereum's $100B+ staked ETH is economically idle. EigenLayer creates a marketplace to re-stake that security to bootstrap new networks (AVSs).

• Turns capital efficiency into a primitive; protocols don't need to bootstrap a new validator set from scratch.
• Enables cryptoeconomic security for oracles (e.g., EigenDA), bridges, and co-processors.
• Introduces slashing risks but creates a powerful flywheel for Ethereum's economic security.

Rollup sequencers are centralized profit centers and single points of failure. Shared sequencer networks turn sequencing into a neutral, competitive marketplace.

• Guarantees atomic cross-rollup composability (e.g., a single tx across Arbitrum and Optimism).
• Decentralizes the MEV supply chain and enables revenue sharing with rollups.
• Reduces latency and improves user experience with fast, pre-confirmations.

EVM's sequential processing is a bottleneck. Fuel's UTXO-based model and custom virtual machine (FuelVM) enable strict state access lists for parallel execution.

• Achieves near-linear scaling with core count; more validators = more throughput.
• Developer-centric design with native account abstraction and asset-centric programming.
• Serves as a high-performance settlement layer or a standalone modular execution layer.

Bridging between modular chains is complex, slow, and insecure. Hyperliquid, layerzero, and wormhole are building universal messaging layers to abstract cross-chain logic.

• Moves from asset bridges to generic message passing (arbitrary data, function calls).
• Shifts security model from trusted multisigs to light clients and economic security.
• Enables intent-based architectures where users specify outcomes (UniswapX, Across).

Proof-of-Stake often ignores liquid staking tokens (LSTs) as dead capital. Berachain's Proof-of-Liquidity consensus incentivizes deep, sustainable DeFi liquidity from day one.

• Validators earn rewards by providing liquidity in key trading pairs, not just staking.
• Built-in monetary policy with a tri-token model (BERA gas, BGT governance, HONEY stable).
• Aligns validator incentives with ecosystem health, creating a native yield flywheel.

Building a new L1 requires massive upfront investment in security, consensus, and tooling, competing directly with Ethereum and Solana. The result is diluted security and a saturated market of general-purpose chains.\n- High Burn Rate: $50M+ required for initial security and ecosystem incentives.\n- Winner-Take-Most: 90%+ of L1 value accrues to the top 5 chains.

Platforms like AltLayer, Caldera, and Conduit abstract away node ops and shared sequencing, letting builders launch app-specific rollups in weeks. Capital shifts from subsidizing validators to acquiring users.\n- Faster GTM: Launch a sovereign chain in ~2 weeks vs. 12+ months.\n- Predictable Economics: Pay for data (Celestia, EigenDA) and security (Ethereum) as a variable cost.

Modular fragmentation creates demand for secure bridging and shared liquidity. Protocols solving this—like Across (intents), LayerZero (omnichain), and Astria (shared sequencer)—become critical infrastructure.\n- Network Effects: Liquidity layers exhibit stronger moats than execution layers.\n- Fee Capture: Bridges and sequencers extract value from every cross-chain transaction.

The real capital isn't betting on individual rollups but on the picks-and-shovels providers that service thousands of them. Look for stacks controlling key verticals: data availability (Celestia, EigenDA), sequencing (Espresso, Astria), and settlement (Ethereum, Bitcoin).\n- Recurring Revenue: DA and sequencing fees are subscription-like.\n- Protocol Capture: Owning a modular component is akin to owning a piece of every chain built on it.