Integrating modular components: the next phase in crypto infra

Interop Ventures’ thesis is based on the idea that for blockchains to scale, infrastructure will tend toward modularization and specialization. So it was a great pleasure to moderate the Modular Infra: Scaling and Unifying Web3 panel at Multichain Day in Singapore. The panelists were Yair Cleper, Co-founder at Lava Network (an Interop Ventures portfolio company), Chandler De Kock, BD & Partnership at Avail, Yuri Yurchenko, CPO at Neon Labs, and Jin Kwon, Co-founder & CSO at Saga.

During the panel, we delved into how modular infrastructure is shaping the future of blockchain scalability and unification. Here are some key takeaways from our conversation.

Modularity is the natural progression of blockchain infrastructure

Infrastructure benefits from modularity as it allows optimized performance by breaking down blockchain components into smaller, more efficient parts. In monolithic chains, execution, settlement, consensus, and data availability co-existed in the same codebase. Modular chain architecture, however, breaks those functions into separate components. While modularity benefits infrastructure developers, it introduces complexity for application developers and users, which can be mitigated through abstraction.

Yair Cleper proposed introducing an additional fourth layer—the data access layer—to provide a unified interface for developers. This layer would allow developers to interact with multiple blockchains through a single, standardized protocol, improving scalability.

Web2 underwent a similar phase, where the monolithic stacks of the ’90s and early 2000s (e.g., LAMP) were improved through modular optimization. Early cloud companies modularized server architecture to optimize performance and scalability, leveraging new infrastructure improvements like high-speed internet for a better user experience.

Modularity enables greater flexibility and performance and promotes competition—a net win for the industry. The trade-off of more modular infrastructure is increased complexity around compatibility, interdependence, and fault mitigation.

Better abstraction is needed to reduce complexity for application developers and users

The complexity introduced by modularity can be abstracted to improve the experience for developers and users. It’s important to recognize that, in addition to users, there are two kinds of developers: infrastructure developers and application developers.

• Infrastructure developers focus on building high-performance systems by tuning them for optimization.
• Application developers are concerned with building products—they want tech that “just works.” They don’t need to understand the inner workings of infrastructure components like DA, settlement, sequencing, and data access.
• Users are focused on experience and security and are the least concerned with the technical intricacies behind the services they use.

One of the best examples of abstraction in our daily lives is digital payment. Payment terminals ubiquitously work with a handful of card issuers, routing payment requests to thousands of banks across nearly every country in the world. The complexity required to make this possible is enormous, yet it works with 99.99% reliability, tens of thousands of times per second.

The interface must abstract the underlying complexity of modular systems at all levels. Abstraction will be aided by the adoption of standards, which help prevent fragmentation and simplify interoperability.

Integration bring modular components into a cohesive whole

Looking ahead, the next phase of innovation involves reintegrating modular components into unified products.

Web2’s modular phase was followed by an integration phase, creating powerful platforms that allowed developers to scale their applications. Big cloud platforms like AWS, Azure, and GCP brought together modular components in tightly integrated service offerings, greatly benefiting application developers and users downstream. Solutions like AWS Elastic Beanstalk further abstract modular components, providing a unified platform that benefits developers.

In the unified approach, developers benefit from modular scaling without the complexity. They buy into an opinionated stack of components meant to work seamlessly together. If they choose, they can swap out certain components.

Integrated chains like Movement provide an application SDK, sequencing, integrated DA, fast settlement, and wallets.