Blockchain is a tool designed to perform 4 key tasks:

Execution: processing transactions.

Settlement: resolving disputes and confirming transactions (guaranteeing their immutability).

Consensus: verifying and sorting transactions.

Data availability: storing information.

Monolithic systems are the first approach to building blockchains. They are a single chain where all operations listed above happen at the same level: transaction processing, verification, consensus between participants, etc. This is a simple and understandable approach that was implemented in the first networks, such as Ethereum.

But there is a downside. Monolithic blockchains do not scale well. The more users and transactions, the more load on the network. This leads to slower operation and higher fees.

Moreover, monolithic blockchains are less flexible. If you need to change the rules of the network, it is difficult to do so, as it requires the consent of all participants. And in general, changing them is quite difficult without violating the basic architecture of the system.

Modular blockchain is a new approach to building blockchains.

In modular blockchains, different functions are performed at different levels/blockchains, which allows optimizing each chain for a specific task.

For example: Dymension is responsible for Settlement, Avail or Celestia for Data availability, and consensus is provided by the parent chain Cosmos.

It is important to note that modular blockchains are still a new and emerging technology. Often, the development of such systems is quite complex, and their testing has only just begun.

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