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Modular public chain trend

If you have been paying attention to the evolution of public chain technology, you must be familiar with the term "modularization".

In 2022, Web3, as an out-of-the-circle concept, naturally puts forward new requirements for the underlying infrastructure that carries this concept - the public chain. Although the single-chain level still has the best composability, Solana also seems to be the best in terms of TPS. However, limited by the constraints of the classic impossible triangle, it has made certain compromises in terms of decentralization and security. —or sacrifice. The recent two consecutive outages seem to make people see the limitations of the single-chain system (of course, Solana can theoretically also deploy Rollup for expansion in the future).

On the other hand, ETH L2 is finally officially launched. Arbitrum and Optimism have shown us the feasibility of Rollup L2 based on fraud proofs. Starkware and Zk-sync based on cryptographic validity proofs of Zk-Rollup will be officially launched in 2022. use. ETH has made a good start for the modular public chain through L2 expansion.

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Is ETH the Best Modular Choice?

For now, we can see the following three problems:

「1」Strong liquidity split between multiple L2s - ETH Rollup-based L2 is currently familiar with 8 players: Arbitrum, Optimism, Starkware, Zk-sync, Polygon, Aztec, Boba, Metis; look in the future I believe it will not be surprising to see the Rollup of 10-20+. Although the cross-chain bridge can alleviate this problem to a certain extent, Vitalik also recently issued a document saying: "The future will be "multi-chain" rather than "cross-chain". There are basic security restrictions for cross-chain bridges."【1】

"2" The time for ETH 2.0 POW to POS is undecided, and sharding is temporarily put on hold. There is a lot of uncertainty about the time of full expansion - this is caused by ETH's technical history.

"3" The third point that many people don't realize, but perhaps the most important point, is the ecological and historical burden of ETH - ETH's own L1 will compete with L2 for resources, at least in the foreseeable few years in the future.

Let's expand this point in a little more detail. This is very important, and it is also one of the important reasons for our investment in Assembly.

image description

Image source: https://coinyuppie.com/understand-zk-rollups-how-to-bring-a-paradigm-shift-in-the-crypto-ecosystem/

From the perspective of SL, all settlement TXs have to compete for resources with the native DAPP on ETH L1, which is not a big problem in normal times, but when Gas War occurs (if there is a large amount of liquidation on L1, or the explosive NFT Competition for Mint occurs), all Rollup performance will be greatly affected.

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Image source: https://twitter.com/deversifi/status/1424732007431643137

The reason for all this comes from the ecological and historical burden of ETH - that is, in the next few years, the DAPP economic activities on ETH L1 will not stop, and all these activities will compete with Rollup for the expensive and scarce ETH L1 H.

Is it possible for a Layer1 to only do SL+DA alone, without doing any Dapp EL?

Of course, for the new generation of public chains such as Polkadot, the relay chain is only responsible for SL+DA, and all data processing is done by the parallel chain. On the Cosmos side, there is even a design like Celestia [3], which extracts the DA layer separately, provides DA services for all other Rollups, and also focuses on this service.

Of course, we can argue that ETH L1 security is the best, security is that SL and DA are the best options. However, if the market only values ​​security, it will definitely not be born in this colorful multi-chain era. Even Starkware, which is the orthodox L2 of ETH, will provide users with the "cheap" option that the DA layer is placed on Starkware itself instead of ETH L1 . Under the trade-off between safety and performance, we will definitely see various modular solutions.

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The road to modularity based on IOTA

IOTA, perhaps a project that has faded from the memory of many old investors and has not been heard by many new investors.

But in 2017-18, IOTA was one of the troika of the DAG (Directed Acyclic Graph) data structure. With its original Tangle ledger structure and high TPS, it occupied the top ten list of cryptocurrency market value for quite a long time. for a while. Later, the entire blockchain industry entered the DeFi era dominated by smart contracts, and IOTA gradually faded out of people's vision. The representatives of DAG-type public chains were also replaced by the new generation of support contracts such as Fantom and Avax.

The characteristics of the IOTA1.0 era are as follows [4]:

• High concurrency, high TPS




• Based on UTXO model, no Gas fee

• Does not support smart contracts

• Centralized Coordinator (provided by the foundation)




It can be seen that although the fee is low and the TPS is high, its non-contract support and centralized nodes are quite different from the mainstream development of the current blockchain, which is the main reason why IOTA has faded out of people's vision in the past few years.

However, with the arrival of the modular public chain trend in 2022 and the release of IOTA2.0 and Assembly, we have reason to believe that IOTA is expected to occupy a place in the modular public chain market.




Assembly cooperates with IOTA2.0 to provide various requirements for modular public chains in the Web3.0 era:




• High TPS - The underlying Tangle ledger DAG data structure guarantees high concurrent TPS

• Scalable - a multi-chain network similar to Cosmos or Polkadot, which can continuously deploy new contract chains

• EVM compatible and supports Web Assembly

• Developers can flexibly customize the incentives and fees of each chain

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• shared security

  
  

Technical Introduction to Assembly

The technical white paper of Assembly has been released. Here is a brief summary to introduce the core technical features of Assembly [5].

1. The underlying DAG-based UTXO

The UTXO account book represented by BTC is characterized by allowing concurrent writing, and has a great advantage in scalability compared to the account model represented by ETH. However, the account model is naturally suitable for smart contracts because of the existence of a global and objective state. Its Turing completeness and functionality are far superior to UTXO-based scripts. This is why most smart contract chains are currently based on account models. Instead of UTXOs. But conversely, in a modular stack, what if the L1 of a UTXO only needs to be responsible for settlement, without processing any contracts and running Dapp?

Not supporting smart contracts has become an advantage, because there will not be any DAPP from L1 competing for resources with L2. At the same time, L1 processing can theoretically support massive high concurrency under the UTXO and DAG models, so the number of supported L2 has huge advantages.

2. Assembly - Layer1.5

image description

Image source: https://www.iota.love/202201/iota-smart-contract-whitepaper/

For easy understanding, you can think of IOTA+Assembly as an L1 similar to the Polkadot relay chain. All contract chains connected to Assembly are like parachains on Polkadot, appearing as L2.

Assembly itself is similar to the node verification of other public chains. It provides the POS pledge of its own token ASMB, and will be slashed in case of errors or malicious behaviors. ASMB tokens are also the governance certificate of the entire Aseembly ecosystem, including chains. Configuration, committee rotation parameters, gas fee settings for each chain, etc.

3. Shared Security

Multi-chain parallel structure, shared security is an unavoidable topic. Because as long as there is a cross-chain call scenario, the chain with weak security will inevitably become the weakest shortcoming in the barrel theory, thus affecting the overall security of the barrel. In the new "native modular public chain", Polkadot implements strict shared security in the form of slot auctions.

For the time being, Cosmos is loosely self-made by each chain, and there is no shared security at all (Cosmos version 2.0 in 2022 will also introduce shared security based on Atom Hub). Avax achieves relative shared security by assigning "a designated subset of the overall validator pool" per subnet. It is not difficult to see that Polkadot has the highest security requirements, but the slot auction also makes many projects sigh; Cosmos is the most flexible, but its security is currently questioned; Avax's subnet verification design is relatively balanced between the two .

Assembly uses a form similar to the ETH2.0 fraud proof Rollup. Each verifier uses pledged assets as a security guarantee. Any third party can provide fraud evidence when the verifier updates the wrong chain status by monitoring the chain's activities and get rewards. . This ensures that as long as there is only one honest validator in the validator committee, the state of the chain can be protected from malicious transformation.

Of course, you may have a doubt. In ETH, things such as asset pledge of verifiers, "judging" fraud proofs, and slash of pledged assets are done through smart contracts on the ETH main chain. This smart contract acts as the "Supreme Court" and also realizes the shared security of all Rollup chains in disguise. However, IOTA's own L1 does not support the contract, so who will bear the responsibility of the Supreme Court?

The answer is - create a separate smart contract chain on Assembly to implement all the necessary "Supreme Court" logic and be responsible for the security of all other smart contract chains. This special chain is called the "root chain". The reason why the root chain has the highest security is that its verifiers are a group of special nodes - according to the white paper, in the IOTA 2.0 ledger, the verifiers of the root chain will be selected from the so-called nodes with high mana value. High mana verifiers are the owners of L1 IOTA nodes, with access mana and consensus mana as weight factors, and are selected in a decentralized manner on L1 nodes.

This also introduces an unavoidable topic, that is, the underlying L1 IOTA 2.0 and its Mana system.

4.IOTA 2.0

Compared with version 1.0, IOTA 2.0 has many technical updates and iterations. Here are the two most important [6]:

One is to remove the coordinator - the coordinator is a special node in the network that can protect the network from attacks and assist in confirming transactions, but the coordinator provided by the Foundation makes the entire network more centralized. One of the most important improvements in IOTA2.0 is the removal of the coordinator (implemented in three phases, currently in the first phase and about to enter the second phase).

The second is the introduction of the Mana system - any blockchain or distributed ledger system, preventing sybil attacks and controlling network congestion are the most core security and functional requirements, and consensus mechanisms such as POW and POS are largely based on this. Strictly speaking, IOTA is not a blockchain, so it does not have POW and POS in the traditional sense, but uses the Mana system.

written in the last words

written in the last words

At the end of this article, let’s review the modular public chain structure first proposed in the article. If a Layer1 has a Layer2 similar to Rollup technology, it can also do:

"1" is relatively safe - no major accidents have occurred in the 6 years since the mainnet was launched in 2016;

"2" High TPS, low cost, scalable;

"3" There is no L1-based DAPP competing with L2 for resources - L1 only does settlement or settlement + DA.

References

References

【1】twitter.com/VitalikButerin/status/1479501366192132099

【2】docs.ethhub.io/ethereum-roadmap/layer-2-scaling/zk-rollups

【3】celestia.org/technology

【4】www.iota.org/solutions/technologies

【5】wiki.assembly.sc

【6】www.iota.love/202201/iota-smart-contract-whitepaper