Modular Stacks vs High-Throughput L1s

Unmatched Customizability: Deploy a dedicated execution environment (e.g., Arbitrum Orbit, OP Stack, Polygon CDK) with your own fee token, gas limits, and governance. This matters for protocols requiring specialized VM support (like gaming or privacy) or needing to capture MEV value.

Horizontal Scaling & Predictable Fees: Scale throughput by adding more rollup chains, avoiding network-wide congestion. Transaction costs are primarily determined by the chosen data availability layer (e.g., Celestia, Avail, EigenDA at ~$0.0015 per 100KB). This matters for high-frequency, low-margin applications like perp DEXs or social feeds.

Atomic Composability Across All Apps: Every smart contract and asset resides in a single, shared state. This enables complex, cross-protocol interactions (e.g., flash loans, leveraged yield strategies on Solana or Sui) without bridging latency or fragmentation risks.

Single-Stack Tooling: Build and deploy with one set of core clients, RPC endpoints, and block explorers (e.g., Solana's Anchor, Aptos' Move). This reduces operational overhead and security surface versus managing a multi-component modular stack (sequencer, prover, DA).

Decoupled execution & data availability: Separates functions across dedicated layers (e.g., Celestia for DA, Arbitrum Orbit for execution). This enables optimized cost and performance per layer, crucial for apps requiring ultra-cheap data (e.g., high-frequency games, social feeds).

Multi-layer orchestration: Developers must manage bridges, sequencers, and provers across the Execution, Settlement, DA, and Consensus layers. This introduces significant devops overhead and cross-chain risk, a major hurdle for teams without dedicated infrastructure engineers.

Single-layer deployment: Build and deploy smart contracts on a single, vertically integrated chain (e.g., Solana, Sui, Monad). This provides a coherent developer experience with one security model, one liquidity pool, and native composability, ideal for DeFi protocols and consumer apps seeking network effects.

Resource contention: All apps compete for the same block space and state access. During peak demand (e.g., major NFT drop, memecoin frenzy), this leads to network-wide fee spikes and failed transactions, as seen on Solana. Limits predictable scaling for individual dApps.

Optimized for raw throughput: Single-layer execution, consensus, and data availability are co-designed for speed. Solana achieves ~5,000 TPS with 400ms block times. This matters for high-frequency DeFi (e.g., Jupiter DEX) and consumer applications requiring instant feedback.

Simplified security model: All activity is secured by a single validator set and native token (e.g., Avalanche's $AVAX, Sui's $SUI). This reduces cross-layer trust assumptions and simplifies staking/delegation for applications like liquid staking (Marinade Finance) and native lending protocols.

Horizontal scaling via rollups: Execution is offloaded to dedicated layers (Rollups on Celestia, EigenLayer, Avail). This allows for unlimited TPS in theory, as seen with dYdX v4 on Cosmos and Arbitrum Nova. This matters for niche applications (gaming, social) needing custom VMs without congesting a shared base.

Best-in-class component selection: Teams can mix execution layers (OP Stack, Arbitrum Orbit, zkSync Hyperchains) with preferred data availability and settlement layers. This enables custom gas tokens and governance forks, critical for enterprise chains and sovereign app-chains (dYdX, Aevo).

Resource contention on a single layer: Network congestion from one popular app (e.g., Pump.fun on Solana) can spike fees and latency for all others. This creates unpredictable operating costs, a significant risk for high-volume DEXs and prediction markets.

Increased integration and security overhead: Developers must manage bridges, multiple token standards, and monitor the health of separate layers (DA, settlement, execution). This introduces liquidity fragmentation and cross-chain MEV risks, challenging for unified DeFi ecosystems.