Modular blockchains: revolution or an overhyped crypto market trend
Replacing classic monolithic blockchains such as Bitcoin, Ethereum, and Solana are next-generation decentralized networks with different architectures, designed to solve industry problems such as scalability, composability, and system upgradability. This new architecture is called a "modular blockchain."
What is a modular blockchain?
A modular blockchain is a decentralized network with a multi-layer architecture. Each level or layer of a modular blockchain is responsible for specific functions, for example:
- Transaction execution;
- Computation and verification;
- Achieving consensus between network validators;
Most often, a modular blockchain comprises two layers: the consensus layer and the execution layer.
The first ensures interaction between nodes that process transactions.
On the second layer, transactions are executed and verified. It is at the execution layer of a modular blockchain that many well-known technologies are implemented, such as rollups (batch transaction processing) and sharding (splitting the network into parallel working modules).
In some modular blockchains, such as Celestia, there is also a data availability (DA) layer. This layer ensures and manages access to data for network nodes.
How is a modular blockchain different from a monolithic one?
Monolithic blockchains got their name because they perform all operations on a single layer, leading to network congestion and, in turn, high fees and slow transactions. A good example is the Ethereum blockchain, where, due to high transaction volume in 2024, the fee for a regular ETH transfer reached $40.
A modular blockchain avoids congestion because each function is handled by a separate layer. This approach provides high throughput and scalability for blockchain networks.
Another distinctive feature of a modular blockchain is the ability to implement individual upgrades without changing the entire system. In monolithic blockchains, launching an update often requires a fork (intervention in the core protocol code). In a modular blockchain, individual layers can be updated while leaving others unchanged.
Modular blockchains also offer greater development flexibility than monolithic ones, making it easier to build high-performance decentralized networks. In addition, modular blockchains are more adaptive, as they allow faster testing and implementation of new features within an existing network.
Examples of modular blockchains
1. NEAR Protocol
NEAR Protocol is currently the largest modular blockchain on the cryptocurrency market.
As of May 2026, NEAR Protocol's market capitalization exceeds $1.6 billion, ranking it 43rd among all crypto projects. However, compared to the peak reached in early 2022, its market cap has fallen nearly 7 times.
2. Arbitrum
Arbitrum is the second-largest modular blockchain, with a market capitalization of over $750 million, ranking it among the top 70 crypto projects. However, since its peak, its market cap has declined more than 7 times.
3. Immutable
The Immutable project was originally developed as a second-layer solution for Ethereum, but was later classified within the modular blockchain segment after implementing rollup technology (batch transactions). However, Immutable does not directly use modular blockchain technologies; it uses them only indirectly.
Although once considered a promising project focused on the blockchain gaming market, the platform is now showing disappointing performance: over the past two years, its market capitalization has fallen more than 10 times, down to $335 million.
4. Celestia
The first network in crypto market history that was originally designed as a modular blockchain.
Celestia was also the first modular blockchain to introduce the DA (data availability) layer. This approach allows nodes to access only fragments of data rather than the entire block, reducing computational requirements and improving performance.
Celestia is among the top four modular blockchains by market capitalization, with a market cap of $317 million. However, compared to its peak at the end of 2024, this figure has dropped more than 10 times. As of May 2026, Celestia's native cryptocurrency (TIA) ranks only 111th on CoinMarketCap.
5. Starknet
Along with Immutable, Starknet was initially part of the Ethereum scaling solutions (layer 2 segment).
However, after launch, a multi-component architecture was implemented in Starknet, enabling it to be classified as a modular blockchain.
Starknet is currently not performing well due to both the overall market downturn and inflated investor expectations prior to launch that were not met.
Since listing, Starknet's market capitalization has dropped more than 8 times to $232 million. At present, it is not even among the top 100 cryptocurrencies.
Conclusion
The first modular blockchains began appearing only in 2023, and as of May 2026, their number slightly exceeds 30. Despite their innovative nature, modular blockchains are currently not as popular as monolithic ones and are showing negative performance amid the overall decline of the cryptocurrency market.
The total market capitalization of modular blockchains is still only about $3.8 billion. For comparison, MemeCore — the second-largest memecoin — has a market cap comparable to the entire modular blockchain segment.