Modular vs Monolithic Blockchains: Who Will Win the Web3 Race

Over the past decade, blockchain technology has evolved from a niche experiment into the backbone of the emerging Web3 ecosystem. What began with Bitcoin as a decentralized payment network has expanded into a global infrastructure powering decentralized finance (DeFi), non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), and countless other applications. As adoption accelerates, the question of how blockchains should be designed to support massive user bases and diverse use cases has become one of the most important debates in the industry.

At the heart of this debate lies a fundamental choice: monolithic vs. modular blockchain architecture. Monolithic blockchains integrate all core functions - execution, consensus, data availability, and settlement - into a single layer. This approach prioritizes simplicity, security, and cohesiveness, but struggles with scalability as demand grows. Modular blockchains, on the other hand, embrace a "separation of concerns" philosophy by unbundling these functions across specialized layers. This design promises greater flexibility and throughput, but introduces new complexities and dependencies between layers.

As Web3 continues to mature, the competition between monolithic and modular approaches has intensified. Each camp has strong advocates and real-world examples proving their strengths. But only one question truly matters: which architecture will emerge as the foundation of the next generation of the internet?

What Are Monolithic Blockchains?

Monolithic blockchains are systems in which all the essential functions of a blockchain - execution, consensus, data availability, and settlement - are bundled together in a single, unified layer. In this design, every node in the network is responsible for verifying transactions, executing smart contracts, storing data, and maintaining consensus on the state of the chain. This all-in-one architecture has been the dominant model since the birth of blockchain, starting with Bitcoin and later Ethereum in its early stages.

Examples of Monolithic Blockchains

Some of the most well-known monolithic blockchains include:

• Ethereum (pre-sharding era) - before it transitioned to Ethereum 2.0 and rollups, Ethereum operated as a classic monolithic chain, handling execution, consensus, and storage all in one layer.

• Solana - known for its high throughput and Proof of History mechanism, Solana is designed as a tightly integrated monolithic system that emphasizes speed and synchronicity.

• Avalanche - although it introduces subnets for customization, the core Avalanche network operates as a monolithic blockchain with combined layers.

Advantages of Monolithic Blockchains

• Simplicity - developers and users interact with a single, unified system, reducing the complexity of cross-layer coordination.

• Strong security - since all functions are validated by the same set of nodes, there is a single, cohesive security model.

• Synchronous execution - transactions and smart contracts are executed directly within the same environment, leading to a straightforward developer experience.

Disadvantages of Monolithic Blockchains

• Scalability bottlenecks - as transaction demand grows, the network struggles to scale because every node must process and store all data.

• Risks of centralization under heavy load - high hardware requirements and performance demands can push smaller participants out of the network, leaving control in the hands of a few powerful validators.

Monolithic blockchains provide robustness and simplicity but face significant challenges when it comes to scaling for mass adoption. These limitations have fueled the rise of a new design paradigm: modular blockchains.

What Are Modular Blockchains?

Modular blockchains take a very different approach compared to the traditional monolithic design. Instead of bundling execution, consensus, data availability, and settlement into a single layer, modular systems separate these functions into independent, specialized layers. Each layer focuses on doing one job well, and together they form a flexible blockchain ecosystem.

In this model, a blockchain doesn’t need to handle every task internally. For example, an execution layer can process transactions and run smart contracts while outsourcing data availability to a dedicated DA layer. Settlement and consensus can also be provided by separate layers, which ensures that the entire system is both scalable and composable.

Examples of Modular Blockchains

Some leading projects driving the modular paradigm include:

• Celestia - a pioneer in the modular blockchain space, providing a data availability layer designed to support multiple execution environments.

• EigenDA - focused on decentralized data availability, tightly integrated with rollup ecosystems.

• Avail - developed to be a universal data availability solution for modular chains.

• zk-rollups - execution layers that rely on cryptographic proofs (zero-knowledge proofs) while outsourcing settlement and data availability to base layers like Ethereum.

Advantages of Modular Blockchains

• Scalability - by unbundling responsibilities, modular systems avoid the bottlenecks of monolithic chains and can scale horizontally by adding more specialized layers.

• Flexibility - developers can mix and match components, choosing the execution or data availability layer that best suits their needs.

• Independent component development - each layer can evolve separately, allowing faster innovation without requiring full protocol upgrades.

Disadvantages of Modular Blockchains

• Integration complexity - coordinating across multiple layers requires sophisticated infrastructure and standards. This can increase the barrier to entry for developers and users.

• Greater reliance on cross-chain bridges - since layers often operate independently, assets and data must move across layers securely. This reliance introduces additional risks, as bridges have historically been points of failure.

Modular blockchains aim to unlock scalability and flexibility by breaking apart the responsibilities of a blockchain. While this approach introduces new challenges, it represents one of the most promising paths toward mass adoption of Web3.

Key Differences Between Monolithic and Modular Blockchains

The debate between monolithic and modular blockchains is ultimately a debate about trade-offs. Both approaches aim to provide a secure, scalable, and user-friendly foundation for Web3, but they take fundamentally different paths to get there. Below are the core areas where the two architectures diverge.

Architecture

• Monolithic: all core functions (execution, consensus, data availability, and settlement) exist in a single layer, making the system tightly integrated.

• Modular: each function is separated into independent layers, creating a “separation of concerns” model where specialized components interact with each other.

Scalability

• Monolithic: limited by the capacity of the network since every node must process and store all transactions. High throughput chains like Solana push the limits, but face hardware centralization risks.

• Modular: enables horizontal scaling by distributing responsibilities across layers. Rollups, DA layers, and other specialized solutions can be added without overburdening a single chain.

Security

• Monolithic: security is unified across the entire system, as the same set of validators secures all functions. This creates a simple, cohesive trust model.

• Modular: security can be delegated or shared. For example, rollups often inherit settlement and consensus security from Ethereum, while DA layers may use their own validator sets. This creates flexibility, but also more moving parts.

Developer Experience

• Monolithic: offers simplicity. Developers build on one integrated system with fewer dependencies, making onboarding and deployment straightforward.

• Modular: offers flexibility. Developers can choose the execution, DA, or settlement layer that best fits their needs, but must also navigate integration challenges.

Use Cases and Examples

The choice between monolithic and modular architectures is not only a technical question but also a practical one. Different industries and applications have different requirements in terms of speed, scalability, security, and developer experience. Below are some of the most relevant use cases where the strengths and weaknesses of each model become clear.

Gaming and DeFi

• Gaming: Games often require extremely high throughput and low transaction latency to support real-time interactions. Monolithic blockchains like Solana, with their integrated architecture and fast finality, are often more suitable for such use cases. The synchronous execution model reduces complexity for game developers, who can rely on a single environment for execution and settlement.

• DeFi: Decentralized finance depends heavily on composability - the ability of protocols to interact seamlessly. Modular architectures with rollups on Ethereum offer scalability without losing access to Ethereum’s deep liquidity and security. This makes modular solutions particularly attractive for DeFi protocols that require high throughput but also trust Ethereum’s settlement guarantees.

Enterprise and Corporate Blockchains

Enterprises often value predictability, compliance, and security over raw throughput. In this context, monolithic blockchains (or even private/permissioned versions of them) can be attractive because they provide a unified trust model and straightforward governance. However, modular chains are gaining traction for enterprises that want customizable solutions - for example, outsourcing data availability to a specialized layer while keeping execution private or semi-private.

The Role of L2 Solutions and Rollups

Layer 2 solutions, particularly rollups, have become the cornerstone of Ethereum’s scaling roadmap. Rollups move execution off-chain while relying on Ethereum for settlement and sometimes for data availability. This makes them a perfect example of modular design in action: they combine the flexibility and scalability of separate execution layers with the strong security guarantees of a monolithic base chain. The rise of Optimistic and zk-rollups shows how modular systems can extend the life and relevance of monolithic blockchains.

Experiments with Data Availability (DA)

Data availability has emerged as one of the most critical components of blockchain scalability. Projects like Celestia, EigenDA, and Avail focus exclusively on providing DA layers that can serve multiple execution environments. This modular approach allows rollups and other chains to offload one of the heaviest burdens - storing and distributing data - to specialized networks. While monolithic blockchains continue to manage their own DA internally, experiments in modular DA highlight how specialization can improve efficiency for the entire ecosystem.

Arguments for Monolithic Blockchains

Despite the growing attention around modular designs, monolithic blockchains remain highly relevant and continue to dominate some of the most widely used ecosystems. Their strength lies in simplicity, reliability, and proven resilience.

Strong Consistency and Developer Simplicity

One of the biggest advantages of monolithic blockchains is their all-in-one design. Developers and users interact with a single, unified system where execution, consensus, settlement, and data availability are tightly integrated. This reduces complexity and makes development more straightforward. Smart contracts can be deployed and interacted with in a predictable environment without the need to coordinate across multiple layers or services. For builders who value simplicity and consistency, monolithic chains remain an attractive option.

Proven Resilience

Several monolithic blockchains have already demonstrated their ability to support billions of dollars in value and millions of daily transactions.

• Ethereum (pre-modular transition) proved that a monolithic chain can serve as the foundation for an entire ecosystem of DeFi and NFTs, even under massive network congestion.

• Solana continues to show that high-throughput, low-latency monolithic systems can support gaming, DeFi, and large-scale retail adoption despite technical challenges.

This track record matters: enterprises, institutions, and users are often more comfortable building on chains with proven reliability rather than on newer, experimental modular infrastructures.

Closer to the “Classic” Blockchain Model

For many in the industry, monolithic blockchains feel closer to the original vision of blockchain: a single, decentralized ledger where all participants validate and agree on the same state. This simplicity makes the trust model easier to understand. While modular systems introduce new complexities around interoperability and cross-layer security, monolithic chains maintain a straightforward and intuitive structure.

Arguments for Modular Blockchains

While monolithic blockchains have proven their value, modular blockchains are increasingly seen as the future of Web3 infrastructure. Their design focuses on scalability, flexibility, and alignment with new technological breakthroughs.

Scalability for Mass Web3 Adoption

One of the most compelling arguments for modular blockchains is their ability to scale. By unbundling execution, consensus, settlement, and data availability, modular systems avoid the bottlenecks inherent in monolithic chains. Instead of every node processing all activity, specialized layers handle specific functions.

• Rollups can massively increase transaction throughput by processing activity off-chain while posting proofs to a settlement layer.

• Dedicated data availability (DA) layers such as Celestia, EigenDA, and Avail ensure that data is stored and distributed efficiently without burdening execution layers.

This modular scaling approach is better suited to support millions, or even billions, of users in the long term.

Ecosystem Customization

Modular blockchains allow developers and communities to design ecosystems that fit their unique needs. A team can launch a custom execution environment (for example, an application-specific rollup) while leveraging the security of an established settlement layer like Ethereum. Similarly, projects can choose between different DA layers depending on cost, performance, or trust assumptions.
This “Lego-like” composability encourages experimentation and diversity, leading to ecosystems that evolve faster than those constrained by monolithic designs.

Alignment with Emerging Trends

The blockchain industry is rapidly moving toward solutions that embody modular principles:

• zk-rollups leverage zero-knowledge proofs for secure and scalable execution.

• Optimistic rollups push transactions off-chain while relying on fraud proofs.

• Dedicated DA solutions are being developed as critical infrastructure for the modular future.

These trends suggest that the industry is converging on modularity as the dominant paradigm. The modular model not only addresses scalability but also aligns with cutting-edge cryptographic and protocol innovations.

Hybrid Scenario: Co-evolution

The debate between monolithic and modular blockchains often frames the two models as mutually exclusive. In reality, the future of Web3 is more likely to involve coexistence and convergence rather than one architecture fully replacing the other.

Why Monolithic and Modular Approaches May Coexist

Monolithic chains provide simplicity, strong security guarantees, and a cohesive developer experience. Modular systems, on the other hand, excel at scalability, customization, and innovation. Since different applications have different priorities, some needing high throughput and composability, others valuing reliability and simplicity, the industry is unlikely to converge on a single architectural model. Instead, both paradigms can serve complementary roles within the broader Web3 ecosystem.

Examples: Ethereum as a Hybrid Model

A clear example of co-evolution is Ethereum. Once a purely monolithic blockchain, Ethereum is now transforming into a hybrid model:

• Its base layer remains monolithic, offering settlement, consensus, and security.

• A growing ecosystem of modular Layer 2 rollups handles execution and scaling, while posting proofs back to Ethereum.
  This combination enables Ethereum to maintain its strong security model while scaling to support higher transaction volumes through modular extensions.

Other examples include Avalanche subnets and Cosmos app-chains, where elements of modularity are layered onto otherwise monolithic ecosystems.

The Likelihood of Hybrid Architectures Emerging

The evolution of blockchain is rarely binary. Just as the internet developed through the layering of different protocols (TCP/IP, HTTP, DNS), blockchain networks are likely to evolve into hybrid architectures that combine the best aspects of both worlds. Monolithic chains will serve as secure settlement and coordination hubs, while modular solutions extend scalability and flexibility at the edges.

This hybrid future offers the most practical path forward: leveraging the robustness of monolithic designs while embracing the innovation of modular systems.

Who Will Win the Web3 Race?

The competition between monolithic and modular blockchains is often framed as a winner-takes-all battle. In reality, the future of Web3 will most likely be diverse and multi-architectural. Both paradigms bring unique strengths that make them well-suited for different types of use cases.

Not a Single Winner, but a Diversified Market

History shows that technology ecosystems rarely converge on a single design. Just as the internet supports a wide variety of protocols and platforms, Web3 will likely evolve into a landscape where both monolithic and modular blockchains coexist. Each approach will capture a share of the market depending on the needs of users, developers, and institutions.

Different Scenarios: Modular vs. Monolithic

• Modular for Mass Adoption: Modular blockchains, with their scalability and flexibility, are well-positioned to support mainstream Web3 adoption. As billions of users begin interacting with decentralized applications, modular designs can provide the throughput and customization necessary to scale effectively.

• Monolithic for Premium Services: Monolithic blockchains may continue to serve as trusted environments for high-value transactions, enterprise use cases, or premium services where simplicity and proven security matter more than raw throughput. For example, a global financial institution may prefer the resilience of a monolithic chain, while a gaming studio may opt for a modular rollup solution.

The Importance of Interoperability and Standards

Regardless of which model dominates in a given niche, interoperability will be the deciding factor for the success of Web3 as a whole. Seamless communication between modular and monolithic systems will enable liquidity sharing, cross-chain composability, and broader network effects. Open standards for messaging, bridging, and verification will ensure that users don’t need to think about which underlying architecture they’re interacting with.

Our Perspective

At Technorely, we've been actively observing and contributing to this evolutionary journey from an insider's perspective. We've delivered a multitude of projects on platforms such as Ethereum, EOS, Stellar, Hyperledger, and Binance Smart Chain, among others. We have experience designing both monolithic platforms and modular ecosystems, which have taught us invaluable lessons about building infrastructures that are fast today and ready to scale tomorrow. This hands-on experience has equipped us with the skills necessary to navigate the complexities of both architectural approaches effectively.

Ultimately, it's not about which camp wins but about harnessing each one's strengths effectively. That's where we excel. If you're looking for a team to design and deliver a blockchain solution tailored to your needs, get in touch with us. Together, we'll build an infrastructure ready for the future of Web3, using a thoughtful blend of Modular vs Monolithic Blockchains approaches to drive innovation and ensure customization.