Modular Summit 3: The Turning Point for the Modular Ecosystem

Modular Summit 3 marks the beginning of the most pivotal time period in the evolution of the modular ecosystem since its inception.

With the theme around the entire week in Brussels being "say the quiet part out loud" or "keep it real," it's clear that throughout the second half of this year, teams within the modular ecosystem are on the ropes to ship.

I went into Modular Summit with several questions which were thoroughly answered over the three-day event. Let's start with the first one:

Where does modularity go from here?

The theme of the third annual modular summit was around expansion. A term coined by NoSleepJon, "Modular Expansion," is about growing the pie and expanding the number of quality teams collaborating within.

Needless to say, the entire modular ecosystem is poised for further growth and adoption. The sentiment of the community feels less like an intellectual "kumbaya" than in February of this year and more like a growing ecosystem of builders pushing each other to ship.

Sometimes periods of market downturns lead to an odd phenomenon of trauma bonding where the tightness of a certain community becomes extremely strong. We will remember who was around this year. Next year, the modular ecosystem will have a ton more liquid assets rather than just a handful, as we have now.

On a more technical level, the increasing number of app-specific rollups was especially apparent. This trend is something I'm particularly bullish on accelerating even faster.

We had many convos about design architectures of based rollups, sovereign rollups, epheremal rollups, and even bitcoin L2s.

However, the core thesis remained strong:

We had many convos about design architectures of based rollups, sovereign rollups, ephemeral rollups, and even Bitcoin L2s.

However, the core thesis remained strong:

The line between apps and chains is becoming increasingly blurred. We should think of rollups as microservices with specific use cases. We should lower the barrier of entry for creating and experimenting with new rollups. We should create faster feedback loops.

We will see more and more experimentation happening month over month.

Now, for the question everyone and their mother was asking during the week...

What is going to spark development at the application level?
My thesis for development at the application level is that it will likely be driven by the maturation of the modular infrastructure stack. I put out a tweet saying that I believe that we actually need more infrastructure to reach a place where developers can build really great apps.

Some people agreed, some, well, not so much.

Generally, I think that as more projects recognize the benefits of modularity—such as scalability, flexibility, and specialization—we can expect this trend of apps being launched as chains to continue.

I also think that after ETHCC there will be some VCs who decide to launch and/or allocate capital to investing in builders who are building apps. In addition to this, I expect the UX to improve significantly with wallets and with chain abstraction solutions.

Chain abstraction allows developers to hide away the complexities of underlying modular blockchains and simplify the process of using onchain apps for users.

The modular mullet of the chain abstraction frontend paired up with the modular blockchain backend will start to become more and more real for all of us interacting onchain.

This will be a massive UX lift for the entire space and truly allow apps to appeal to non-crypto native users.

Now, onto the modular stack itself...

Which parts of the stack will see significant expansion?

We will see new DA layers come online very soon, and the demand for DA will continue as more and more apps launch chains.

Rollup frameworks are becoming much more mature as well. We're seeing new, custom rollup stacks launching, which provide a more hands-on experience than a typical RaaS.

Shared sequencers are also being worked on and shipped extremely quickly. I expect the teams building these to bring them online and functional sooner than we expect.

Another idea which has been confirmed in Brussels is that the next-gen VM space is accelerating.

There are a lot of teams working to bring novel execution layers to the modular stack. Specifically, the SVM on Ethereum race has heatened up dramatically.

Teams are shipping testnets and mainnets of novel VM designs.

Also, other ecosystems like Bitcoin and Solana are increasingly adopting modularity for scaling. Both ecosystems are scaling with rollups, or their own form of horizontal scaling with a different nomenclature.

This shift indicates a wider acceptance of modularity across different ecosystems.

Finally...

Is ZK going to eat the modular stack?

Arguably one of the most exciting ideas of the modular stack is the "ZK-ification" of it. I asked a few panelists about this and many of the answers laid around the idea of verifiable computation being extremely important for modular systems. With many different, outsourced parts there can be more trust assumptions or risks involved.

ZK is a massive help here.

The rapid advancement of ZKVMs and sped-up timelines to mainnet was particularly impressive. While ZK technology won't necessarily "eat" the modular stack, it will certainly play a pivotal role in its evolution.

Right now, the cost and proving times are a bit too high, but every month for the recent past there has been successful work to get them down.

ZKVMs are going to play a massive role in building the modular puzzle. Where we currently are facing a fragmentation problem, one promise of ZKVMs is to allow for intent-centric interoperability with faster finality and better guarantees.

These two ideas are not mutually exclusive, as I previously thought.

Overall, the future of ZK looks bright within the modular stack. After all, we're all just trying to build more L2beat green pizzas, arent we?

Modular Summit was a fantastic event to cap off an otherwise hectic ETHCC week. The level of intellectual discourse, productive conversations, and generally amazing vibe was something to be grateful for.

Thanks to everyone who made it amazing and everyone who I had the chance to speak with in Brussels. Looking forward to MS4!