Single-Chain vs Shared Consensus: L1s

Vertical Integration: Full control over execution, consensus, and data availability (e.g., Solana, Sui). This enables optimized state access and sub-second finality (<400ms on Solana). This matters for high-frequency DeFi (e.g., Drift, Jupiter) and consumer applications requiring instant feedback.

Horizontal Scaling: Dedicate layers for specific functions (e.g., Celestia for DA, EigenLayer for shared security, Arbitrum Nitro for execution). This enables sovereign rollups and exponential scalability without congesting a single chain. This matters for app-specific chains (dYdX, Lyra) and protocols needing custom gas tokens or governance.

Optimized for raw performance: Tight coupling of execution, consensus, and data availability on a single layer enables high throughput (e.g., Solana's 5,000+ TPS) and low latency (< 1 sec finality). This matters for high-frequency DeFi and consumer applications requiring a seamless, single-chain user experience.

Unified security and tooling: Developers build on a single, coherent stack (e.g., Solana's Sealevel runtime, Sui's Move). This reduces complexity versus managing cross-chain dependencies. This matters for rapid prototyping and teams wanting to avoid the oracle problem for native state.

Horizontal scaling via rollups: Chains like Eclipse and dYmension RollApps use a shared data availability layer (Celestia, Avail) and settlement layer, allowing for thousands of parallel execution environments. This matters for application-specific chains that need custom VMs without bootstrapping new validator sets.

Modular cost structure: Execution layers pay for security and DA à la carte, potentially lowering fixed costs. Developers can choose optimal components (e.g., Celestia for DA, EigenLayer for shared security). This matters for niche protocols and teams conducting architecture optimization for unit economics.

Bottlenecked hardware requirements: To achieve peak performance, validators often require high-spec hardware (e.g., 128+ GB RAM, 1 Gbps+ network), leading to fewer, more centralized operators. This matters for protocols prioritizing maximal decentralization and censorship resistance over pure speed.

Complexity of interoperability: Modular stacks introduce latency and trust assumptions for cross-rollup communication (via bridges/AVS). Managing upgrades across multiple layers (DA, Settlement, Execution) adds overhead. This matters for projects that cannot tolerate fragmented liquidity or complex multi-layer governance.

Vertical Integration: Execution, consensus, data availability, and settlement are tightly coupled in a single layer. This enables optimized performance (e.g., Solana's 5,000+ TPS) and a unified developer experience with a single set of tools (Solana CLI, Anchor). Ideal for applications needing low-latency finality (< 2 seconds) and simple deployment.

Inherent Bottleneck: Scaling requires upgrading the entire node stack, leading to hardware centralization (e.g., 1TB+ ledger size). Congestion on one app (e.g., a popular NFT mint) can spike fees and latency for all others, as seen in Solana's network outages. Limited sovereignty for apps; they cannot customize their execution environment.

Modular Architecture: Decouples consensus and data availability (DA) from execution. Rollups (e.g., Arbitrum, Optimism) use a shared security layer (like Celestia's 16 MB/s data availability) while running their own execution. Enables sovereign chains with custom VMs (FuelVM, SVM rollups) and exponential scalability via parallel execution layers.

Multi-Layer Coordination: Developers must manage bridges, sequencers, and prover networks. Liquidity fragmentation can occur across rollups (e.g., between Arbitrum and Optimism). Relies on the economic security of the DA layer; a 51% attack on the base layer compromises all rollups. Adds latency for cross-rollup messaging.