Aggregation, settlement and execution are the three pillars. How to measure the value of projects in the track?
Written by:Bridget Harris
Compiled by: Xiaobai Navigation coderworld
The various components of the modular stack have not received equal attention and innovation. While there have been many projects historically innovating on the data availability (DA) and ordering layers, the execution and settlement layers have been relatively neglected as part of the modular stack until recently.
In the shared sequencer market, there are not only many projects competing for market share, such as Espresso, Astria, Radius, Rome, and Madara etc., including Caldera and Conduit There are many RaaS providers who develop shared sequencers for Rollups built on top of them. Since the underlying business model of these RaaS providers does not rely entirely on serialization revenue, they are able to offer more favorable fee splits for their rollups. All of these offerings exist alongside many Rollups that choose to run their own sequencers and decentralize over time to capture the fees they generate.
The sequencer market is unique compared to the DA space, which is largely comprised ofCelestia, Avail, and EigenDA This makes it very difficult for small new entrants outside of the big three to successfully disrupt the market. Projects either leverage the “existing” choice – Ethereum – or choose the established DA layer, depending on what type of technology stack and alignment they are looking for. While using the DA layer can save a lot of costs, outsourcing the sorter is not an obvious option (from a fee perspective, not aSafetyMany also believe that DAs will become a commodity, but we have seen in crypto that super strong liquidity protections coupled with unique (hard to replicate) underlying technology make it much harder to commoditize a layer in the stack. Regardless of these debates and changes, there are many DAs and sorters in production.(In short, for some modular stacks, “each service has multiple competitors”).
The execution and settlement layer (and by extension the aggregation layer), which has been relatively little developed, is now starting to iterate in new ways that work better with the rest of the modular stack.
reviewExecution + Settlement Layer Relationship
The execution layer and the settlement layer are closely integrated. The settlement layer can be used as a place to define the final result of the state execution. The settlement layer can also add enhancements to the results of the execution layer to make the execution layer more robust andSafetyThis could mean many different capabilities in practice, such as the settlement layer being able to act as an execution layer to resolve fraud disputes, verify proofs, and bridge between other execution layers.
It is also worth mentioning that some teams have implemented the development of consensus execution environments directly in their own protocols. An example isRepyh Labs, it is building an L1 called Delta, which is essentially the opposite of a modular stack, but still provides flexibility in a unified environment, and has the advantage of technical compatibility because teams don’t have to spend time manually integrating each part of the modular stack. Of course, the downside is lack of fluidity, inability to choose the modular layer that best suits your design, and high cost.
Other teams choose to build L1s that are extremely specific to a core function or application. An example is Hyperliquid, which has built an L1 perpetualcontractAlthough their users will need to bridge over from Arbitrum, their core architecture does not depend on the Cosmos SDK or other frameworks and can therefore be targeted for their primary use case.Iterative customization and hyper-optimization.
Progress at the Execution Layer
Its (last cycle, still around) predecessor was a general-purpose alt-L1, where basically the only feature that beat Ethereum was higher throughput. This meant that historically projects that wanted to significantly improve performance basically had to choose to build their own alternative L1 from scratch - mainly because Ethereum itself didn't have the technology yet. Historically, this just meant embedding efficiency mechanisms directly into the general-purpose protocol. In this cycle, these performance improvements are achieved through modular design, and most are implemented on top of the main smart contracts.contractplatform (Ethereum), so that existing and new projects can take advantage of the new execution layer infrastructure without sacrificing Ethereum’s liquidity,SafetySex andCommunitymoat.
We are also now seeing more mixing and matching of different virtual machines (execution environments) as part of a shared network, which allows developers more flexibility and better execution layer customization. For example,Layer N Enables developers to run general rollup nodes (such as SolanaVM, MoveVM, etc. as execution environments) and application-specific rollup nodes (such as perps dex, orderbook dex) on their shared state machine. They are also working on achieving full composability and shared liquidity between these different VM architectures, which is an on-chain engineering problem that has historically been difficult to accomplish at scale. Each application on Layer N can asynchronously pass messages to each other without delay in consensus, which is a common problem in the crypto space in general. Each xVM can also use a different db architecture, whether it isRocksDB,LevelDB, or a custom synchronization database made from scratch. Interoperability is achieved in part through a "snapshot system" (similar to Chandy-Lamport The algorithm works in which the chain can transition to new blocks asynchronously without pausing the system.SafetyOn the other hand, fraud proofs can be submitted even if the state transition is incorrect. With this design, their goal is to minimize execution time while maximizing overall network throughput.
Layer N
In keeping with these advances in customization,Movement Labs 利用了Move语言（最初由Facebook设计，用于Aptos和Sui等网络）进行 VM /执行。与其他框架相比，Move具有结构优势，主要是安全性和开发人员的灵活性/表现力，这在历史上是使用今天存在的构建链上的两个主要问题。重要的是，开发人员Just write Solidity and deploy on MovementTo achieve this, Movement created a fully bytecode-compatible EVM runtime that can also be used with the Move stack.M2, leveraging BlockSTM parallelization, higher throughput can be achieved while still being able to access Ethereum’s liquidity moat (historically, BlockSTM has only been used for alt-L1s like Aptos, which clearly lack EVM compatibility).
MegaETHThey also push the boundaries of execution space, especially through their parallelization engine and in-memory DB, where the sorter can store the entire state in memory. In terms of architecture, they leverage:
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Native code compilationL2Higher performance (ifcontractThe more computationally intensive the program is, the greater the speedup it can get, and if it is not computationally intensive there is still about a 2x+ speedup).
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Relatively centralized block production, but relatively decentralized block verification.
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Efficient state synchronization, full nodes do not need to re-execute transactions, but they need to understand the state deltas so that they can apply them to the local database.
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Merkle tree update structure (usually updating the tree requires a lot of storage space), their method is a new triple data structure, which is memory and disk efficient. In memory computing, they can compress the chain state into memory, so when executing transactions, they do not have to access the disk, only the memory.
As part of the modular stack, proof aggregation is another design that has been explored and iterated on recently – it is defined as a prover that can create a succinct proof out of multiple succinct proofs. First, let’s take a holistic look at the aggregation layer and its history and current trends in cryptography.
Assigning values to the aggregation layer
Historically, in non-crypto markets, aggregators have acquired smaller market shares than platforms or marketplaces.
C.J. Gustafson
Although I'm not sure if this applies tocryptocurrency, but for decentralizationexchangeThis is definitely true for cross-chain aggregators, cross-chain bridges, and lending protocols. For example, 1inch and 0x (the two main dex aggregators) have a combined market cap of ~$1 billion, a fraction of Uniswap’s ~$760 million. This also applies to cross-chain bridges: cross-chain bridge aggregators like Li.Fi and Socket/Bungee appear to have a smaller market share compared to platforms like Across. While Socket supports15 different cross-chain bridges, but they actually have a similar total bridge volume as Across (Socket-$2.2 billion, Across-$1.7 billion), while Across only accounts for A small portion of Socket/Bungee's recent trading volume.
In the field of lending, Yearn Finance It is the first decentralized lending yield aggregation protocol, and its market value is currentlyApproximately US$2.5 millionIn contrast, a blockchain like Aave (Approximately US$1.4 billion) and Compound (Approximately US$5.6 million) Such platform products have gained higher valuations and greater relevance over time.
Traditional financial markets operate in a similar way. For example, the U.S. ICE(intercontinentalexchange)and CME GroupEach has a market cap of about $7.5 billion, while “aggregators” like Charles Schwab and Robinhood have market caps of about $132 billion and $15 billion, respectively.Via ICE and CMERobinhood has approximately119 million options contracts per month, while ICE is approximatelyAbout 35 million, and options contracts are not even a core part of Robinhood’s business model. Despite this, ICE is valued on the public market at about 5 times more than Robinhood. Therefore, Schwab and Robinhood, which act as application-level aggregation interfaces that route customer order flow through various venues, are not as highly valued as ICE and CME despite their respective large trading volumes.
As consumers, we simply assign less value to the aggregators.
If the aggregation layer is embedded directly into the product/platform/chain, thiscryptocurrencyIf the aggregator is tightly integrated directly into the chain, this is obviously a different architecture and I would love to see it develop.Polygon AggLayer, developers can easily integrate their L1 and L2 Connect to a network that aggregates proofs and enables a unified liquidity layer on chains using CDK.
AggLayer
The model works similar toAvail's Nexus interoperability layer, which includes proof aggregation and sorter auction mechanisms to make their DA product more robust. Like Polygon’s AggLayer, each chain or aggregation integrated with Avail becomes interoperable within the Avail existing ecosystem. In addition, Avail brings togetherBlockchainOrdered transaction data for platforms and rollups, including Ethereum, all Ethereum rollups, Cosmos chains, Avail rollups, Celestia rollups, and different hybrid structures such as Validiums, Optimiums, and Polkadot parachains. Developers from any ecosystem can build permissionlessly on top of Avail's DA layer while using Avail Nexus, which can be used for cross-ecosystem proof aggregation and messaging.
Avail Nexus
NebraSpecial attentionXiaobai NavigationProof aggregation and settlement, which can aggregate across different proof systems, e.g.xyzSystem certification andabcSystem certification so that you haveagg_xyzabc(rather than being aggregated within the proof system). The architecture usesUniPlonK, which standardizes the work of verifiers for circuit families, making it more efficient and feasible to verify proofs of different PlonK circuits.Zero knowledge proofThe final step of settlement becomes much easier for clients because Nebra handles all the batch aggregation and settlement, and the team only needs to change the API contract call.
Astriaare working on an interesting design around how their shared sorter works with proof aggregation. They leave the execution aspect to the rollups themselves, which run the execution layer software on a given namespace on the shared sorter, essentially just an "execution API" which is a way for rollups to accept sequence layer data. They could also easily add support for validity proofs here to ensure blocks don't violate the EVM state machine rules.
Josh Bowen
Here, products like Astria are #1→#2 flows (unordered transactions → ordered blocks), the execution layer/aggregation nodes are #2→#3, and products likeNebraSuch a protocol is the last step #3→#4 (execution block→succinct proof). Nebra (or Aligned Layer) could also be a theoretical fifth step, where proofs are aggregated and then verified later. Sovereign Labs is also working on a similar concept to the last step, where a cross-chain bridge based on proof aggregation is the core of its architecture.
Sovereign Labs
In general, some application layersStarting to own the underlying infrastructure, in part because if they don't control the underlying stack,Maintaining just one high-level app may have incentive issuesand high user adoption costs. On the other hand, as competition and technological progress continue to reduce infrastructure costs, applications/application chainsIntegration with modular componentsThe cost of this becomes more feasible, and I believe the motivation is much stronger, at least for now.
Through all of these innovations - the execution layer, the settlement layer, the aggregation layer, greater efficiency, easier integration, greater interoperability, and lower costs become more possible. In practice, all of this will lead to better applications for users and a better development experience for builders. It's a winning combination that can lead to more innovation and faster innovation, and I look forward to what's to come.
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