Monolithic EVM dominance is ending. A single, general-purpose VM cannot optimize for every use case, creating a market for specialized execution environments like Solana VM, Move VM, and Fuel's UTXO model.
the-modular-blockchain-thesis-explained
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The Future of Execution is a Constellation of Specialized VMs
The monolithic EVM era is over. The modular stack enables purpose-built execution environments like MoveVM for assets, SVM for speed, and WASM for flexibility. This is the new competitive landscape.
introduction
THE SHIFT
Introduction
Monolithic execution is obsolete; the future is a constellation of specialized virtual machines.
Specialization unlocks vertical performance. A gaming-focused VM like Argus Labs' World Engine optimizes for state-heavy simulations, while a DeFi VM like Eclipse uses Solana's runtime for high-frequency swaps, proving one-size-fits-none.
The winning stack is modular. The base layer provides security and data availability; specialized VMs like Arbitrum Stylus or Optimism's OP Stack provide the execution. This is the Celestia/EigenLayer thesis in practice.
thesis-statement
THE ARCHITECTURAL SHIFT
The Core Thesis: Specialization Beats Generalization
The future of blockchain execution is a constellation of specialized virtual machines, not a single, monolithic EVM.
The EVM is a bottleneck. Its one-size-fits-all design forces every application to pay for general-purpose opcodes, creating inefficiency and cost for specialized tasks like gaming or AI inference.
Specialized VMs optimize for specific workloads. A zkVM for privacy, a parallel VM for games, and a high-throughput VM for DeFi each achieve order-of-magnitude improvements in performance and cost for their target domain.
This creates a modular execution layer. Applications deploy on the VM that fits their needs, with interoperability handled by shared settlement layers like Celestia or EigenDA and messaging protocols like LayerZero and Wormhole.
Evidence: Arbitrum Stylus demonstrates the demand, enabling Rust/C++ programs on an EVM-compatible chain for a 10-100x gas reduction in compute-heavy operations, a model Avalanche Subnets and Polygon CDK are adopting.
key-trends
THE MODULAR STACK
The Three Pillars of Specialized Execution
General-purpose VMs are a bottleneck. The future is a constellation of specialized execution environments, each optimized for a specific class of applications.
01
The Problem: The Monolithic VM Tax
EVM, SVM, and MoveVM force all apps to pay for a one-size-fits-all runtime. This creates massive overhead for non-financial logic like gaming or AI.
- Gas inefficiency for complex state transitions.
- Performance ceiling of ~100-200 TPS for complex apps.
- Developer friction from forcing financial primitives onto social or gaming logic.
~200 TPS
Complex App Ceiling
+90%
Gas Overhead
02
The Solution: Application-Specific VMs (RollApps)
Dedicated VMs, like those on Celestia or Dymension, allow apps to define their own execution rules. This is the core thesis behind RollApps and Sovereign Rollups.
- Native performance: Games can run at 60 FPS, AI models inference on-chain.
- Custom fee markets: No competing with DeFi arbitrage bots for block space.
- Sovereign security: Choose your data availability (e.g., Celestia, EigenDA) and settlement layer.
1000+ TPS
Per-App Throughput
-95%
Fee Volatility
03
The Enabler: Parallel Execution & State Access
Monolithic chains process transactions sequentially. Specialized VMs leverage parallel execution engines, like Sui's Move or Aptos' Block-STM, and explicit state access lists.
- No contention: Social feeds and DEX trades don't block each other.
- Horizontal scaling: Add new VMs to increase total network capacity linearly.
- Deterministic performance: Predictable latency for real-time applications.
10x
Throughput Gain
~500ms
Finality
THE FUTURE OF EXECUTION IS A CONSTELLATION OF SPECIALIZED VMS
VM Specialization Matrix: A Builder's Guide
A first-principles comparison of leading specialized execution environments, mapping trade-offs in performance, programmability, and interoperability for protocol architects.
| Core Metric / Capability | EVM (General-Purpose) | Solana VM (High-Throughput) | Fuel VM (Modular UTXO) | Starknet VM (ZK-Native) |
|---|---|---|---|---|
Execution Model | Single-threaded, Global State | Parallelized, Sealevel Runtime | Parallel UTXO, State Minimization | Cairo VM, STARK-Proven |
Gas Fee Model | Per-opcode, Volatile | Prioritization Fees, Fixed Units | Predetermined, Static Analysis | L1 Settlement Fee + STRK |
State Growth Mitigation | State Rent (EIP-4444) | Expiring Accounts | Native UTXO Model | Validity Proofs, State Diffs |
Native ZK-Proving | ||||
Max Theoretical TPS (Theoretical) | ~100 | ~65,000 | ~10,000+ | ~3,000 (L2) |
Time to Finality (L1) | ~12-15 minutes | ~400ms | ~2 seconds (Optimistic) | ~2-4 hours (ZK-Prove Time) |
Dominant Use Case | DeFi Composability (Uniswap, Aave) | High-Freq Trading (Jupiter, Drift) | Modular Rollup Settlement | Privacy & Complex Logic (dYdX) |
Key Trade-off | Composability vs. Scalability | Speed vs. Client Centralization | Parallelism vs. EVM Incompatibility | Provable Security vs. Prover Cost |
deep-dive
THE EXECUTION
The Modular Stack as a VM Launchpad
The monolithic virtual machine is obsolete, replaced by a constellation of specialized execution environments optimized for specific use cases.
Monolithic VMs are inefficient. They force every application to pay for a one-size-fits-all execution environment, creating overhead for tasks like gaming, DeFi, and AI that have divergent computational needs.
The modular stack enables VM specialization. By separating execution from consensus and data availability, projects like Arbitrum Orbit and Optimism's OP Stack allow developers to launch purpose-built VMs with custom fee tokens and gas economics.
This creates a Cambrian explosion of execution. We see this with SVM rollups for high-throughput DeFi via Eclipse, and Move-based chains like Aptos/Sui for asset-centric applications, all settling to shared security layers like Ethereum.
Evidence: The proliferation of over 50 live L2/L3 chains built on these frameworks demonstrates the demand for specialized execution, moving beyond the EVM's limitations.
counter-argument
THE FRAGMENTATION THESIS
Counterpoint: The Network Effect Trap
The future of blockchain execution is a fragmented constellation of specialized VMs, not a single dominant platform.
The EVM's dominance is a historical accident, not a technical optimum. Its design is a compromise for a 2015 world, creating a monoculture of technical debt that stifles innovation in areas like parallel execution and formal verification.
Specialized VMs create superior products. A gaming chain needs the sub-second finality of Solana, while a DeFi chain needs the synchronous composability of a single rollup. A one-size-fits-all VM cannot optimize for both.
Interoperability protocols are the new moat. The winning stack is the one that connects these VMs seamlessly. This is the core thesis behind Celestia's modular data availability and LayerZero's omnichain messaging.
Evidence: The market is voting with its capital. Non-EVM chains like Solana and Sui command tens of billions in TVL, while Ethereum L2s like Arbitrum and Optimism fragment liquidity within the EVM ecosystem itself.
protocol-spotlight
THE VM WARS
Protocols Betting on the Constellation
Monolithic L1s are being unbundled. The next generation of protocols is building on specialized virtual machines for specific applications.
01
Monad: The Parallelized EVM
The Problem: EVM execution is fundamentally sequential, capping throughput.\nThe Solution: A parallel EVM with superscalar pipelining and 1-second block times.\n- 10,000+ TPS target via optimistic parallel execution.\n- Full bytecode compatibility to port $100B+ of EVM liquidity.
10,000+
Target TPS
1s
Block Time
02
Movement Labs: Move on Ethereum
The Problem: Solidity's security flaws cost billions. Developers need a safer, more expressive language.\nThe Solution: MoveVM as an L2, bringing Facebook's Diem-tested language to Ethereum.\n- Formally verifiable assets prevent reentrancy and overflow bugs.\n- Enables parallel execution by default via the Move prover.
~0
Reentrancy Risk
Parallel
By Default
03
Eclipse: The SVM L2
The Problem: Solana's speed is siloed. Developers want its performance with Ethereum settlement.\nThe Solution: A Solana Virtual Machine (SVM) L2 using Ethereum for data availability and consensus.\n- Sub-second finality and high throughput of the SVM.\n- Leverages Celestia for cheap DA and Ethereum for security.
<1s
Finality
SVM
Execution Env
04
Fuel: The Modular Execution Layer
The Problem: EVM is inefficient for high-performance DeFi and gaming.\nThe Solution: A UTXO-based, parallelizable VM built from first principles for modular stacks.\n- State minimization via strict state access lists.\n- FuelVM offers ~10x higher state bandwidth than the EVM.
UTXO
Architecture
~10x
State Bandwidth
05
Aztec: Privacy as a VM
The Problem: Public blockchains leak all data. Complex privacy requires a dedicated environment.\nThe Solution: A zk-zkVM (Noir + Honk) that enables programmable privacy on Ethereum.\n- Private smart contracts with ~1-second proof generation.\n- EVM equivalence for seamless integration with existing dApps.
zk-zkVM
Tech Stack
Private
Smart Contracts
06
Arbitrum Stylus: EVM+
The Problem: EVM developers are locked into Solidity, missing performance of native code.\nThe Solution: WebAssembly (WASM) co-processor alongside the EVM on Arbitrum One/Nova.\n- Write contracts in Rust, C, C++ for ~10x cheaper compute.\n- EVM interoperability allows seamless calls between WASM and Solidity contracts.
WASM
Co-Processor
~10x
Cheaper Compute
takeaways
EXECUTION LAYER FRAGMENTATION
Key Takeaways for Builders and Investors
The monolithic EVM is shattering into a constellation of specialized VMs, creating new battlegrounds for performance, security, and market share.
01
The Problem: The EVM is a Compromise
The EVM's one-size-fits-all design forces every dApp to pay for features they don't use, creating a performance ceiling. This leads to:\n- High gas costs for complex logic and data-heavy operations.\n- Inability to natively support parallel execution or novel cryptographic primitives.\n- ~15 TPS bottleneck for the entire network under load, a fundamental architectural limit.
~15 TPS
Network Limit
>1000x
Gas Variance
02
The Solution: Parallel & Specialized VMs
Projects like Solana (Sealevel), Sui, and Aptos proved specialized, parallel VMs can achieve >50k TPS. The next wave embeds these capabilities into modular stacks via:\n- Ethereum L2s with custom VMs (e.g., Fuel, Eclipse).\n- Application-specific VMs for gaming or DeFi (e.g., MUD World Engine).\n- ZK-optimized VMs (e.g., zkSync's zkEVM, Starknet's Cairo) for verifiable compute.
>50k TPS
Peak Throughput
~100ms
Finality
03
The Investment Thesis: Own a Vertical
Winning in this new landscape means dominating a vertical, not being a generalist. Build and invest in stacks optimized for a single, massive use case.\n- Gaming/XR: VMs with fast state access and asset primitives.\n- DeFi: VMs with native oracle integration and MEV resistance.\n- Social/Identity: VMs with efficient storage and ZK-proof integration.
$10B+
Vertical TAM
10-100x
Efficiency Gain
04
The New Risk: Interoperability Debt
A multi-VM future creates massive interoperability debt. Moving assets and state between different VM environments (e.g., EVM ↔ SVM) is the next critical infrastructure challenge.\n- Watch projects like LayerZero, Axelar, and Polygon AggLayer solving cross-VM messaging.\n- Liquidity fragmentation becomes a primary UX and security concern.\n- New attack surfaces emerge in cross-VM state proofs and bridging.
$2B+
Bridge Hacks (2022-24)
5-10s
Latency Penalty
05
The Builders' Playbook: VM as a Feature
For dApp developers, your choice of VM is now a core product feature, not just a technical detail.\n- Prioritize VMs with native account abstraction for superior UX.\n- Choose based on data availability costs—a major driver of L2 fee variance.\n- Leverage VM-specific tooling (e.g., Move for assets, Cairo for ZK) for defensible moats.
-90%
Gas for Niche Ops
1-2s
Dev Onboarding
06
The Endgame: Hyper-Specialized Execution Markets
Execution becomes a commodity traded in a dynamic market. Users won't know which VM runs their transaction; they'll pay for a result.\n- Watch for intent-based architectures (e.g., UniswapX, CowSwap) that abstract VM choice.\n- Solvers and sequencers will route to the cheapest, fastest VM for a given task.\n- The value accrual shifts from the base VM to the aggregation and routing layer.
$100M+
Solver Revenue
<0.1¢
Cost per TX Goal
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