🥮Modular

Modular blockchains focus on handling a few responsibilities and outsourcing the rest to one or more independent layers. It is divided into multiple layers:

1. Execution layer: The execution layer is primarily responsible for handling transactions and executing smart contracts. It includes transaction verification, execution, and state updates.

2. Data-availability layer: The data-availability layer in modular blockchains ensures that data in the network is accessible and verifiable. It typically involves functions such as data storage, transmission, and validation to ensure transparency and trust in the blockchain network.

3. Consensus layer: Responsible for the protocols between nodes to achieve consistency in data and transactions. It uses specific consensus algorithms, such as Proof of Work (PoW) or Proof of Stake (PoS), to verify transactions and create new blocks.

4. Settlement layer: Responsible for the final settlement of transactions, ensuring the transfer of assets and recording them permanently on the blockchain, determining the final state of the blockchain.

With modular execution and data-availability layers, a blockchain can scale its computational capacity while maintaining the characteristics of trustlessness and decentralization by breaking the correlation between throughput and validation costs. This can be achieved by splitting blockchain nodes into full nodes and light clients. However, this model involves two issues: block validation (verifying the accuracy of computed results) and block availability (validating all published data).

Full nodes download, compute, and verify every transaction in a block, while light clients only need to download block headers and assume that state transitions are valid. Light clients rely on fraud proofs generated by full nodes to verify transactions. In turn, it allows light clients to automatically identify invalid transactions, enabling them to operate with almost the same security guarantees as full nodes.