The Rise of Modular Blockchain and the Future of the Encryption Field

Modular has become an important trend in the development of Blockchain technology, which includes projects evolved from certain technologies, as well as Ethereum's scaling solutions, Bitcoin's scaling layers, and cross-chain technologies. Although these projects focus on different aspects, they all aim to break the boundaries of traditional monolithic chains and promote the integration of the Blockchain ecosystem.

In this context, the competitive landscape is changing. The original technological barriers are gradually being broken down, and the boundaries between projects are becoming blurred. Therefore, the uniqueness and irreplaceability of blockchain projects are becoming increasingly important. Projects that cannot find their positioning in the wave of modularization may gradually lose their market position.

In the next 2-3 years, various aspects of modular blockchain will enter a phase of intense competition. This includes the data availability layer, execution layer, and even the settlement layer. After this period of reshuffling, some foundational projects will emerge as the underlying infrastructure of the entire encryption field. Over time, these projects will establish increasingly deeper moats, unless disruptive technological innovations occur.

In this process, the entry window for new high-performance blockchain projects is essentially closed. Unless there are breakthrough technologies, it will be difficult for new monolithic blockchains or high-performance blockchains to secure a place in the market. Even existing high-performance public chains need to find their indispensable position in this highly competitive environment; otherwise, they may lose their original competitive advantage.

It is worth noting that Ethereum, as the current largest smart contract platform, will also face challenges from various levels, especially in the data availability layer and execution layer. However, due to Ethereum's possession of the most scarce resource in the encryption field—security, it still holds irreplaceable importance.

The potential future development trend is that Ethereum and Bitcoin will provide the most fundamental settlement layer services for the entire encryption field. At the same time, a few Layer 1 public chains may also have the opportunity to participate in the settlement layer. In the data availability layer, multiple projects will compete. The execution layer will mainly focus on Ethereum Layer 2 solutions, high-performance public chains, and the upcoming Bitcoin Layer 2 projects.

With the development of modular blockchain, Ethereum and Bitcoin are gradually evolving into providers of underlying security services. Other projects offer services at different levels to meet various application needs. In the future, the diversification of blockchain will mainly be reflected in the application layer, rather than the infrastructure aspect.

After experiencing the modularization of this cycle, the competition for blockchain infrastructure will gradually come to an end. In the next decade, the competition at the encryption application layer will become more intense, involving various fields such as gaming, social networking, decentralized finance, non-fungible tokens, artificial intelligence, and shared services. This marks the beginning of large-scale adoption in the encryption field, which is expected to gradually be realized in 2-3 years.

From 2009 to 2026, this nearly twenty-year period can be regarded as the wild era of the encryption field. Although this period is filled with speculation, it is also during this process that the underlying infrastructure has been gradually improved, laying the foundation for the widespread application of encryption technology.