Modular Blockchain: The Final Piece of Web3

Author: GeekCartel

1. Introduction

Modular blockchain is an innovative blockchain design paradigm aimed at improving system efficiency and scalability through specialization and division of labor. Before the advent of modular blockchain, a single (Monolithic) chain had to handle all tasks, including the execution layer, data availability layer, consensus layer, and settlement layer. Modular blockchain treats these tasks as freely combinable modules to address these issues, with each module focusing on specific functions.

Execution Layer: Responsible for processing and validating all transactions, as well as managing blockchain state changes.

Consensus Layer: Reaches agreement on transaction order.

Settlement Layer: Used to complete transactions, verify proofs, and bridge between different execution layers.

Data Availability Layer: Ensures that all necessary data is accessible to participants in the network for verification.

The trend of modular blockchain is not only a technological revolution but also a crucial strategy to drive the entire blockchain ecosystem to meet future challenges. GeekCartel will analyze the concept of modular blockchain and related projects, aiming to provide a comprehensive and practical interpretation of modular blockchain knowledge to help readers better understand modular blockchain and anticipate future development trends. Note: The content of this article does not constitute investment advice.

2. Pioneer of Modular Blockchain - Celestia

In 2018, Mustafa Albasan and Vitalik Buterin published a groundbreaking article providing new ideas to address the scalability issues of blockchain. "Data Availability Sampling and Fraud Proofs" introduced a method through which blockchain can automatically expand storage space as network nodes increase. In 2019, Mustafa Albasan delved deeper and wrote "Lazy Ledger," proposing a blockchain system concept that only deals with data availability.

Based on these concepts, Celestia emerged as the first data availability (DA) network adopting a modular structure. It is built using CometBFT and Cosmos SDK, serving as a proof-of-stake (PoS) blockchain that effectively enhances scalability while maintaining decentralization.

DA layer is crucial for the security of any blockchain, as it ensures that anyone can inspect the transaction ledger and verify it. If a block producer proposes a block without all data available, the block can achieve final determinism but may contain invalid transactions. Even if the block is valid, data that cannot be fully verified will have a negative impact on the functionality of users and the network.

Celestia implements two key functions, namely Data Availability Sampling (DAS) and Namespace Merkle Trees (NMT). DAS allows light nodes to verify data availability without downloading the entire block. NMTs partition block data into separate namespaces for different applications, meaning applications only need to download and process data relevant to them, significantly reducing data processing requirements. Importantly, DAS enables Celestia to scale with the increase in users (light nodes) without compromising end-user security.

Modular blockchain is making it possible to build new chains in unprecedented ways, where different types of modular blockchains can collaborate in different ways for different purposes and architectures. Celestia's official proposals on modular architecture designs showcase the flexibility and composability of modular blockchain:

Figure 1 Layer 1 and Layer 2 Architecture

Layer 1 and Layer 2: Celestia refers to it as naive modularity, initially built for Ethereum's scalability as a monolithic Layer 1, with Layer 2 focusing on execution, while Layer 1 provides other key functions.

• Celestia supports chains built using Arbitrum Orbit, Optimism Stack, and Polygon CDK (soon to be supported) technology stacks to use Celestia as the DA layer, where existing Layer 2 can switch their data from being published on Ethereum to being published on Celestia using Rollup technology. Commitments to blocks are published on Celestia, making it more scalable than the traditional method of publishing data to a single chain.

• Celestia supports RollApps (chains dedicated to applications) constructed based on Dymension technology components as the execution layer, with settlement layer depending on Dymension Hub (to be explained later), DA layer using Celestia, and inter-chain interaction through the IBC protocol (IBC based on Cosmos SDK, a protocol that allows blockchains to communicate with each other. Chains using IBC can share any type of data as long as it is encoded in bytes).

Figure 2: Execution, Settlement, and DA Layer Architecture

Execution, Settlement, and Data Availability: Optimized modular blockchain can decouple execution, settlement, and data availability layers among specialized modular blockchains.

Figure 3: Execution and DA Layer Architecture

Execution and DA: As the goal of implementing modular blockchain is flexibility, the execution layer is not limited to publishing its blocks to the settlement layer. For example, a modular stack can be created that does not involve the settlement layer but only the execution layer above the consensus and data availability layers.

In this modular stack, the execution layer will be sovereign, publishing its transactions to another blockchain, typically used for ordering and data availability but handling its own settlement. In the context of the modular stack, Sovereign Rollup is responsible for execution and settlement, while the DA layer handles consensus and data availability.

The difference between Sovereign Rollup and Smart Contract Rollup is:

• Smart Contract Rollup transactions are verified by smart contracts in the settlement layer. Sovereign Rollup transactions are verified by nodes of Sovereign Rollup.

• Nodes in Sovereign Rollup have sovereignty compared to Smart Contract Rollup. In Sovereign Rollup, transaction ordering and validity are managed by the Rollup's own network, not relying on a separate settlement layer.

Currently, Rollkit and Sovereign SDK provide frameworks for deploying Sovereign Rollup testnets on Celestia.

3. Exploring Modular Solutions in the Blockchain Ecosystem

1. Execution Layer Modularization

Before introducing execution layer modularization, we should understand what Rollup technology is.

Currently, execution layer modularization technology mainly relies on RolLUP is a scalability solution that operates off-chain on Layer 1. This solution executes transactions off-chain, meaning it occupies less block space and is one of Ethereum's important scalability solutions. After executing transactions, it sends a batch of transaction data or execution proofs to Layer 1 for settlement. Rollup technology provides a scalability solution for Layer 1 networks while maintaining decentralization and security. For example, in Ethereum, Rollup technology can further improve performance and privacy by using ZK-Rollup or Optimistic Rollup. - ZK-Rollup uses zero-knowledge proofs to verify the correctness of packaged transactions, ensuring transaction security and privacy. - Optimistic Rollup assumes the validity of transactions before submitting the transaction state to the Ethereum main chain. During the challenge period, anyone can calculate fraud proofs to verify transactions. ### 1.1 Ethereum Layer 2: Building Future Scalability Solutions Initially, Ethereum adopted sidechains and sharding technologies for scalability. However, sidechains sacrifice some decentralization and security to achieve high throughput. The development of Layer 2 Rollups has been faster than expected, providing significant extensions and more after implementing Proto-Danksharding. This means that there is no longer a need for "shard chains," which have been removed from Ethereum's roadmap. Ethereum delegates off-chain execution to Layer 2 based on Rollup technology to reduce the main chain's burden. EVM provides a standardized and secure execution environment for smart contracts executed on the Rollup layer. Some Rollup solutions are designed with EVM compatibility in mind, allowing smart contracts executed on the Rollup layer to leverage EVM features and functionalities like OP Mainnet, Arbitrum One, and Polygon zkEVM. ### 1.2 B² Network: Pioneering Bitcoin ZK-Rollup B² Network is the first ZK-Rollup on Bitcoin, enhancing transaction speed without compromising security. Utilizing Rollup technology, B² Network provides a platform for running Turing-complete smart contracts for off-chain transactions, improving transaction efficiency and minimizing costs. As shown in the diagram, B² Network's ZK-Rollup Layer adopts the zkEVM solution, responsible for executing user transactions within the Layer 2 network and outputting related proofs. Unlike other Rollups, B² Network's ZK-Rollup consists of multiple components, including Account Abstraction Module, RPC Service, Mempool, Sequencers, zkEVM, Aggregators, Synchronizers, and Prover. The Account Abstraction Module implements native account abstraction, allowing users to program higher security and better user experience into their accounts flexibly. zkEVM is EVM-compatible and helps developers migrate DApps from other EVM-compatible chains to B² Network. Synchronizers ensure information synchronization from B² nodes to the Rollup layer, including sequence information, Bitcoin transaction data, and other details. B² nodes act as off-chain validators, executing unique functions within the B² network. The Bitcoin Committer module in B² nodes constructs a data structure to record B² Rollup data and generates a "B² ciphertext" Tapscript. Subsequently, the Bitcoin Committer sends a UTXO of one satoshi to a Taproot address containing the $B^{2}$ ciphertext, and the Rollup data is written into Bitcoin. Additionally, the Bitcoin Committer sets a time-locked challenge, allowing challengers to question the commitment of zk proofs. If there are no challengers or the challenge fails during the time lock period, the Rollup is eventually confirmed on Bitcoin; if the challenge succeeds, the Rollup is rolled back. Whether Ethereum or Bitcoin, fundamentally, Layer 1 is a single chain that receives extended data from Layer 2. In most cases, Layer 2 capacity also depends on Layer 1 capacity. Therefore, the implementation of Layer 1 and Layer 2 stacks is not ideal for scalability. When Layer 1 reaches its throughput limit, Layer 2 is also affected, leading to increased transaction fees and longer confirmation times, impacting the efficiency and user experience of the entire system. ### 2. DA Layer Modularization In addition to Celestia's DA solution being favored by Layer 2s, other innovative solutions focusing on DA have emerged, playing a crucial role in the entire blockchain ecosystem. #### 2.1 EigenDA: Empowering Rollup Technology EigenDA is a secure, high-throughput, and decentralized DA service inspired by Danksharding. Rollup can publish data to EigenDA, enabling lower transaction costs, higher transaction throughput, and secure composability throughout the EigenLayer ecosystem. When Ethereum Rollup builds decentralized temporary data storage, data storage can be directly handled by EigenDA operators. Operators participate in network operations, responsible for processing, verifying, and storing data. EigenDA can scale horizontally with the increase in staking and operators. EigenDA combines with...Rollup technology moves the DA part off-chain to achieve scalability. As a result, actual transaction data no longer needs to be replicated and stored on every node, reducing the bandwidth and storage requirements. On-chain, only metadata related to data availability and accountability mechanisms are processed (accountability stores data off-chain and can verify its integrity and authenticity when necessary).  Figure 7: Basic data flow of EigenDA As shown in the diagram, Rollup writes transaction batches to the DA layer. Unlike systems that use fraud proofs to detect malicious data, EigenDA divides data into blocks and generates KZG commitments and multiple reveal proofs. EigenDA requires nodes to download only a small amount of data [O(1/n)] instead of the entire blob. Rollup's fraud arbitration protocol can also verify whether the blob data matches the KZG commitments provided in the EigenDA proof. During this verification, the Layer 2 chain can ensure that the transaction data of the Rollup state root is not manipulated by sequencers/proposers. ### 2.2 Nubit: The first modular DA solution on Bitcoin Nubit is an extensible, Bitcoin-native DA layer pioneering the future of Bitcoin. It aims to enhance data throughput and availability services to meet the growing needs of the ecosystem. Their vision is to integrate the vast developer community into the Bitcoin ecosystem and provide them with scalable, secure, and decentralized tools. Nubit's team members are professors and doctoral students from UCSB (University of California, Santa Barbara) with outstanding academic reputation and global influence. They excel not only in academic research but also have rich experience in implementing blockchain engineering. The team, along with domo (creator of Brc 20), co-authored a paper on modular indexers, incorporating the design of the DA layer into the indexer structure of the Bitcoin meta protocol, contributing to the establishment and formulation of industry standards. Nubit's core innovations: consensus mechanism, trustless bridging, and data availability, utilize innovative consensus algorithms and the Lightning Network to inherit Bitcoin's fully censorship-resistant properties and improve efficiency with DAS: - **Consensus Mechanism:** Nubit explores an efficient consensus based on PBFT (Practical Byzantine Fault Tolerance) supported by SNARK for signature aggregation. The PBFT scheme combined with zkSNARK technology significantly reduces the communication complexity of verifying signatures between validators, verifying transaction correctness without accessing the entire dataset. - **DAS:** Nubit's DAS is achieved by multiple rounds of random sampling of a small portion of block data. Each successful sampling round increases the likelihood of complete data availability. Once the predetermined confidence level is reached, the block data is considered accessible. - **Trustless Bridge:** Nubit utilizes a Trustless Bridge that leverages the Lightning Network's payment channels. This method is consistent with local Bitcoin payment methods and does not impose additional trust requirements. Compared to existing bridging solutions, it brings lower risks to users.  Figure 8: Basic components of Nubit We further review the complete system lifecycle shown in Figure 8 with a specific use case. Suppose Alice wants to complete a transaction using Nubit's DA service (Nubit supports various data types, including but not limited to ciphertext, Rollup data, etc.). - **Step 1.1:** Alice needs to continue the service by paying gas fees through Nubit's trustless bridge. Specifically, Alice needs to obtain a public challenge, denoted as X(h), from the trustless bridger (X is an encrypted hash function from the hash range of the Verifiable Delay Function (VDF) to the challenge domain, h is the hash value of a block at a certain height). - **Step 1.2 and Step 2:** Alice must obtain the evaluation result R of the VDF relevant to the current round, submit R along with her data and transaction metadata (such as address and nonce) to validators for merging into the memory pool. - **Step 3:** Validators propose the process of blocks and their headers after reaching consensus. The block header includes the commitment to the data and its related Reed-Solomon Coding (RS Code), while the block itself contains raw data, corresponding RS Code, and basic transaction details. - **Step 4:** The lifecycle ends with Alice's data retrieval. Light clients download block headers, while full nodes retrieve blocks and their headers. **Light clients undertake the DAS process to verify data availability. Additionally, after proposing a threshold number of blocks, historical checkpoints are recorded on the Bitcoin blockchain by timestamps. This ensures that the validator set can prevent potential remote attacks and support quick unbonding.** ### 3. Other Solutions In addition to focusing on modular layers, decentralized storage services can provide long-term support for the DA layer. There are also protocols and chains that offer developers customized and full-stack solutions, enabling users to easily build their chains even without code. ### 3.1 EthStorage - Dynamic Decentralized Storage EthStorage is the first modular Layer 2 to implement dynamic decentralized storage, providing DA-driven programmable key-value (KV) storage, extending programmable storage at a cost of 1/100 to 1/1000 to hundreds of TB or even PB. It offers a long-term DA solution for Rollups and opens up new possibilities for fully on-chain applications such as games, social networks, AI, etc.  Figure 9: Application scenarios of EthStorage The founder of EthStorage, Qi Zhou, has been fully dedicated to the Web3 industry since 2018, holding a Ph.D. from the Georgia Institute of Technology and having worked as an engineer at top companies like Google and Facebook. The team has also received support from the Ethereum Foundation. As one of the core features of the Ethereum Cancun upgrade, EIP-4844 (also known as Proto-dank sharding) introduces temporary data blocks (blob) for Layer 2 Rollup storage, enhancing network scalability and security. The network does not need to validate every transaction in a block, only confirming if the attached blob carries the correct data, significantly reducing the cost of Rollups. However, Blob data is only temporarily available, meaning it will be discarded within a few weeks. This has a significant impact: Layer 2 cannot unconditionally derive the latest state from Layer 1. If a certain data segment cannot be retrieved from Layer 1, it may not be able to synchronize the chain through Rollup. **With EthStorage as a long-term DA storage solution, Layer 2 can retrieve complete data from its DA layer at any time.**

Technical features:

• EthStorage can achieve decentralized dynamic storage: Existing decentralized storage solutions can support the uploading of large amounts of data, but they cannot be modified or deleted, only new data can be re-uploaded. EthStorage, through its original key-value storage paradigm, implements CRUD functionality, i.e., create, read, update, and delete stored data, significantly enhancing data management flexibility.

• Layer 2 decentralized solution based on DA layer: EthStorage is a modular storage layer that can run on any blockchain as long as there is an EVM and a DA to reduce storage costs (but many current Layer 1s do not have a DA layer), even on Layer 2.

• Highly integrated with ETH: EthStorage's client is a superset of the Ethereum client Geth, which means that when running nodes for EthStorage, they can still actively participate in any Ethereum process. A node can be both an Ethereum validator node and a data node for EthStorage.

Workflow of EthStorage:

• Users upload their data to the application contract, which then interacts with the EthStorage contract to store the data.

• In the EthStorage Layer 2 network, storage providers receive notifications about data waiting to be stored.

• Storage providers download data from the Ethereum data availability network.

• Storage providers submit storage proofs to Layer 1, proving the existence of a large number of copies in the Layer 2 network.

• EthStorage contract rewards storage providers who successfully submit storage proofs.

3.2 AltLayer - Modular Customized Service

AltLayer provides a versatile, no-code Rollups-as-a-Service (RaaS) service. The RaaS product is designed for the multi-chain and multi-VM world, supporting EVM and WASM. It also supports different Rollup SDKs, such as OP Stack, Arbitrum Orbit, Polygon zkEVM, ZKSync's ZKStack, and Starkware, different shared ordering services (such as Espresso and Radius), different DA layers (such as Celestia, EigenLayer), and many other modular services at different layers of the Rollup stack.

Through AltLayer, a versatile Rollup stack can be achieved. For example, a Rollup designed for applications can be built using Arbitrum Orbit, with Arbitrum One as the DA and settlement layer, while another Rollup designed for general purposes can be built using ZK Stack, with Celestia as the DA layer, and Ethereum as the settlement layer.

Note: You may wonder why the settlement layer can be implemented by OP and Arbitrum? In fact, these Layer 2 Rollup stacks are implementing "interchain" work similar to what Cosmos proposed: OP introduces Superchain, OP Stack as a standardized development stack supporting Optimism technology, integrating different Layer 2 networks to promote interoperability between these networks; Arbitrum proposes the Orbitchain strategy, allowing the creation and deployment of Layer 3 on the Arbitrum mainnet based on Arbitrum Nitro (technology stack), also known as application chains. Orbit Chains can settle directly to Layer 2s or directly to Ethereum.

3.3 Dymension - Full-stack Modular

Dymension is a modular blockchain network based on Cosmos SDK, aimed at ensuring the security and interoperability of RollApps by using the IBC standard.

Dymension divides blockchain functions into multiple layers, with Dymension Hub as the settlement and consensus layer providing security, interoperability, and liquidity for RollApps, and RollApp as the execution layer. The data availability layer is supported by DA providers that developers can choose according to their needs.

The settlement layer (Dymension Hub) maintains the registry of RollApps and relevant information such as state, sequencer list, current active sequencer, execution module checksum, etc. The logic of Rollup services is fixed within the settlement layer, forming a native interoperability hub. Dymension Hub as the settlement layer has the following features:

• Locally providing Rollups services on the settlement layer: Provides the same trust and security assumptions as the underlying layer but with a simpler, more secure, and more efficient design space.

• Communication and transactions: RollApps in Dymension achieve Inter-RollApp communication and transactions on the settlement layer through embedded modules, providing trust-minimized bridging. Additionally, RollApps can communicate with other chains enabled with IBC through the Hub.

• RVM (RollApp Virtual Machine): The settlement layer in Dymension initiates RVM in fraud disputes. RVM can resolve disputes in various execution environments (such as EVM), expanding the ability and flexibility of RollApp execution.

• Anti-censorship: Users who undergo Sequencer review can submit a special transaction to the settlement layer. This transaction is forwarded to the Sequencer and requested to be executed within a specified time frame. If the transaction is not processed within the specified time, the Sequencer will be penalized.

• AMM (Automated Market Maker): Dymension introduces an embedded AMM in the settlement hub, creating a core financial center. It provides shared liquidity for the entire ecosystem.

Comparison of Modular Blockchain Ecosystems

In the previous sections, we delved into modular blockchain systems and numerous representative projects. Now, we will focus on comparing and analyzing different ecosystems, aiming to comprehensively understand modular blockchains.

Conclusion and Outlook

As we have seen, the blockchain ecosystem is evolving towards modularity. In the past blockchain world, each chain operated in isolation, competing with each other, making it difficult for users, developers, and assets to flow between different chains, limiting the overall development and innovation of the ecosystem. In the WEB3 world, the discovery and resolution of issues are a collaborative process. Initially, Bitcoin and Ethereum attracted a lot of attention as single chains, but as the shortcomings of single chains were exposed, modular chains gradually gained attention. Therefore, the explosion of modular chains is not accidental but a necessary development.

Modular blockchains enhance chain flexibility and efficiency by allowing individual components to be independently optimized and customized. However, this architecture also faces challenges such as communication delays and increased complexity of system interactions. In practice, the long-term benefits of modular architecture, such as improved maintainability, reusability, and flexibility, often outweigh its short-term performance losses. In the future, with technological advancements, these issues will find better solutions.

GeekCartel believes that the blockchain ecosystem has a responsibility to provide a reliable foundational layer and common tools throughout the modular stack to facilitate seamless connections between chains, making it easier for users to utilize blockchain technology and attracting more new users to Web3 if the ecosystem can be more harmonious and interconnected.

Six. Further Reading: Restaking Protocol - Injecting Native Security into Heterogeneous Ecosystems

There are currently some Restaking protocols that effectively aggregate dispersed security resources through a restaking mechanism to enhance the overall security of blockchain networks. This process not only addresses the issue of fragmented security resources but also strengthens the network's defense against potential attacks, while providing additional incentives to participants, encouraging more users to participate in network security maintenance. In this way, the Restaking protocol paves new ways to enhance network security and efficiency, effectively promoting the healthy development of the blockchain ecosystem.

1. EigenLayer: Decentralized Ethereum Restaking Protocol

EigenLayer is a protocol built on Ethereum that introduces a Restaking mechanism, which is a new primitive for cryptographic economic security. This primitive allows for the reuse of ETH on the consensus layer, aggregating the security of ETH across all modules, enhancing the security of DApps that depend on these modules. Users who stake native ETH or use liquidity staking tokens (LST) to stake ETH can choose to join the EigenLayer smart contract to restake their ETH or LST, extending cryptographic economic security to other applications on the network for additional rewards.

As Ethereum transitions towards a Rollup-centric roadmap, applications built on Ethereum are significantly expanded.

However, any module that cannot be deployed or proven on the EVM cannot absorb Ethereum's collective trust. Such modules involve processing inputs from outside Ethereum, making their processing unverifiable within Ethereum's internal protocols. These modules include sidechains based on new consensus protocols, data availability layers, new virtual machines, oracle networks, bridges, etc. Typically, such modules need their own distributed verification semantics AVS for validation. Generally, these AVS are either protected by their native tokens or have permissioned properties.

The current AVS ecosystem faces some issues:

• Security trust assumption. Innovators developing AVS must guide a new trust network to achieve security.

• Value leakage. As each AVS develops its own trust pool, users must pay fees to these pools in addition to Ethereum transaction fees. This deviation in fee flow leads to value leakage from Ethereum.

• Capital burden. For most AVSs currently in operation, the capital cost of staking is much higher than any operational costs.

• Low trust model for DApps. The current AVS ecosystem poses a problem where any middleware dependency of a DApp could become a target for attacks.

Figure 10: Comparison of current AVS services and EigenLayer

In EigenLayer's architecture, AVSs are services built on the EigenLayer protocol, leveraging Ethereum's shared security. EigenLayer introduces two novel ways, centralized security achieved through staking and free-market governance, to extend Ethereum's security to any system and eliminate the inefficiencies of existing rigid governance structures:

• Providing collective security through restaking. EigenLayer protects modules by enabling the restaking of ETH instead of their own tokens, offering a new mechanism for collective security. Specifically, Ethereum validators can set their beacon chain withdrawal credentials to the EigenLayer smart contract and choose to join new modules built on EigenLayer. Validators download and run any additional node software required by these modules. These modules can then impose additional forfeiture conditions on the staked ETH of validators who choose to join the modules.

• Open market for rewards. EigenLayer provides an open market mechanism to manage the security provided by validators and how AVSs consume it. EigenLayer creates an environment in the market where modules will need to incentivize validators enough to allocate their restaked ETH to their modules, while validators help determine which modules are worthy of this additional collective security.

By combining these approaches, EigenLayer acts as an open market where AVSs can leverage pooled security provided by Ethereum validators, promoting validators to make more optimized trade-offs between security and performance through reward incentives and penalties.

2. Babylon: Providing Bitcoin Security to Cosmos and other PoS Chains

Babylon is a Layer 1 blockchain founded by Stanford University's Professor David Tse. The team consists of Stanford researchers, experienced developers, and business advisors. Babylon introduces a Bitcoin staking protocol designed as a modular plugin for many different PoS consensus algorithms, providing a primitive for restaking protocols.

Babylon, based on three aspects of Bitcoin - timestamp service, block space, and asset value - can deliver Bitcoin's security to numerous PoS chains (such as Cosmos, Binance Smart Chain, Polkadot, Polygon, and other blockchains with strong, interoperable ecosystems), creating a more robust and unified ecosystem.

Bitcoin timestamp resolves PoS long-range attacks:

Long-range attacks refer to the possibility of launching a forked chain by exploiting validator nodes in a PoS chain who unstake and revert to a historical block where they were still validators. This problem is inherent in PoS systems and cannot be completely resolved solely by improving the consensus mechanism of PoS chains, whether it's Ethereum or Cosmos and other PoS chains.

After introducing Bitcoin timestamps, the on-chain data of PoS chains will be stored in the form of Bitcoin timestamps on the Bitcoin chain. Even if someone tries to create a fork of a PoS chain, the corresponding Bitcoin timestamp will be later than the original chain, rendering the long-range attack ineffective.

Bitcoin staking protocol:

This protocol allows Bitcoin holders to stake their idle Bitcoin to enhance the security of PoS chains and earn rewards in the process.

The core infrastructure of the Bitcoin staking protocol is the Control Plane between Bitcoin and PoS chains, as shown in the following figure.

Figure 11: System architecture with Control plane and Data plane

The Control Plane is implemented in the form of a chain to ensure it is decentralized, secure, censorship-resistant, and scalable. This control plane is responsible for various critical functions, including:

• Providing Bitcoin timestamp services for PoS chains to synchronize with the Bitcoin network.

• Acting as a marketplace, matching Bitcoin staking with PoS chains and tracking staking and validation information, such as the registration and refresh of EOTS keys;

• Recording finality signatures of PoS chains;

By staking their BTC, users can provide validation services for PoS chains, DA layers, oracles, AVSs, etc., and Babylon can now also provide validation services for Altlayer, Nubit&n

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Acknowledgments

In this emerging infrastructure paradigm, there is still much research and work to be done, and there are many areas not covered in this article. If you are interested in any related research topics, please contact Chloe.

Special thanks to Severus and Jiayi for their insightful comments and feedback on this article.

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