Debate on the survival of Ethereum layer-2 blockchains, with proponents favoring modular approaches like Manta, Celestia, and Cosmos over monolithic ones. Critics argue against the significance of this distinction.
Out of the 44 active Ethereum layer-2 (L2) blockchains operational today, only "a handful" are projected to remain relevant in the next five years, as stated by Kenny Li, co-founder and chief operating officer of Manta Pacific.
As per data provided by L2Beat, there are presently a total of 44 active Ethereum L2 networks, boasting a combined Total Value Locked (TVL) of $36.92 billion, with Arbitrum leading the pack with a TVL of $14.5 billion.
Nevertheless, Li suggests that the future appears promising solely for "modular" blockchains such as Manta, Celestia, and Cosmos.
However, critics argue against this perspective, dismissing the term as merely a "marketing gimmick," asserting that a network's success is unrelated to its developmental and scalability approaches.
‘Monolithic’ BTC and ETH challengers
Discussing with Cointelegraph, Li posits that the influx of new L2s on the Ethereum network is mirroring the trajectory of past "forks" of the Bitcoin and Ethereum networks — none of which managed to endure.
Li elaborated, stating, "All Bitcoin forks — Bitcoin Cash and BSV — essentially took an existing technology and forked it," further explaining, "They proposed: 'We'll introduce these minor adjustments to it. And through these minor adjustments, we'll create something 'superior to Bitcoin.'" Li continued:
“Fast forward to 2024, it's essentially just Bitcoin. No other Bitcoin fork community exhibits comparable metrics or a comparable community that even approaches the original Bitcoin.”
Li further noted a similar scenario with Ethereum in 2016, where new networks like EOS and NEO endeavored to position themselves as "Ethereum competitors" by providing alternative Ethereum Virtual Machine and VM environments, attempting slight modifications to the pre-existing Ethereum ecosystem.
In Li's viewpoint, the primary issue with all Bitcoin and Ethereum "forks" was their "monolithic" construction, implying they lacked the agility to integrate and adopt new technologies swiftly as they emerged over time.
“They all constructed monolithically, and what became of them, right? Fast forward again to 2024, Ethereum emerges as the dominant player,” Li remarked.
“Will we witness as many L2s in about five years? I doubt it. Only a few will endure.”
Modular blockchains are networks that delegate their core functions — execution, settlement, consensus, and data availability — to external blockchains, offering greater design flexibility, as proponents argue.
Conversely, monolithic blockchains prioritize a single-system architecture, handling all tasks within a single network layer.
However, some individuals perceive no reason to engage in the "modular vs. monolithic" debate.
Perhaps it's merely a 'marketing ploy'
Austin Federa, head of strategy at the Solana Foundation, characterizes the relatively recent discourse surrounding the two terms as a "marketing tactic" introduced by Celestia.
While many comprehend Ethereum's more "modular" architecture — relying on L2s to fulfill specific tasks — as contrasting with the "monolithic" nature of other higher-throughput networks such as Solana or Avalanche, Federa challenges the use of the term altogether.
“We must remember that the modular-versus-monolithic debate is essentially a marketing tactic,” Federa remarked. “Celestia fabricated this distinction between modular and monolithic. It's not an organic distinction, and there's nothing inherently genuine about it.”
Li contends that Manta — launched on January 18 — could be described as the "initial and largest" modular layer-2 network on Ethereum, utilizing Optimism's OP stack and employing Celestia for data availability (although Ethereum co-founder Vitalik Buterin would argue that it constitutes a "validium" rather than a genuine L2).
At the time of writing, Manta ranks as the fourth-largest L2 network in terms of TVL, recently surpassed by the new L2 Blast, which commenced its mainnet operations on March 1.
“We don't adopt a monolithic approach to development. We haven't developed anything in terms of core architecture independently,” Li clarified.
“We adopt a highly modular approach, allowing us to essentially integrate various technologies available at different times to adapt to evolving demands,” Li added.
However, Federa argues against the need to distinguish between the two approaches.
“In reality, there's no such thing as a modular system, and there's no such thing as a monolithic system.”
Federa explained that a monolithic network is merely an "integrated" blockchain where tasks are handled within a single layer, whereas "modular" — or "fragmented" networks — execute the same functions across several layers, contributing insignificantly to a network's success or outcomes.
“It's akin to how the terms 'pro-life' and 'pro-choice' are two positive spins on something, right? Like, no one is genuinely anti-life or anti-choice, correct? This is all merely marketing terminology to advance a certain narrative that people wish to discuss.”
“I believe framing these concepts as being in opposition to each other isn't particularly useful or accurate in understanding these systems. They're merely distinct software architecture choices that aren't fundamentally dissimilar in the end,” Federa concluded.