The modular blockchain movement is picking up major steam. Countless new entrants are presenting innovative solutions designed to help us reach a maximum state of decentralization, security, and scalability. The tech is powerful, original, and, most importantly, compatible. Soon enough, developers will have the power to build complex, scalable dApps uncompromised by the limits of conventional blockchain infrastructure.

As we continue building bridges between layers through technical integrations, it is crucial to also foster off-chain collaboration to sustain this growth. As architects of the modular movement, we must ask ourselves: How can we optimize our systems to not only facilitate our individual advancement but our collective progress as well? 

Facilitating a culture of ongoing, constructive discourse is paramount if we are to succeed. Decentralized governance will need to evolve within the modular paradigm to support this collaborative and sustainable growth.

Decentralized governance in a modular paradigm

The rise of blockchain modularity begs a new set of questions and considerations around what constitutes optimal blockchain governance. While similar on- and off-chain mechanisms as monolithic blockchains can be used at the protocol level, results can create a ripple effect through a modular ecosystem. 

In this new paradigm, decentralized governance has the potential to look radically different and it will certainly be more complex. For the modular thesis to succeed, a mechanism that helps to maintain a level of congruence between different layers of the stack must be established. 

We are dealing with nascent technologies that will undergo plenty of iterations as systems are refined and software becomes more sophisticated. As the technology progresses, more consideration must be paid to how this constellation of different players come together to build something truly powerful. 

We are at an early enough stage that we are yet to really see what such a scenario might look like, but it is one we need to anticipate. Creating sustainable alignment between those systems will determine how viable blockchain modularity can truly be.

How should a protocol’s decentralized governance frameworks evolve to strike a balance between its own community and the collective interests of the modular ecosystem? One place to look for inspiration is in the governance of open-source software, which has evolved over decades. 

Drawing lessons from web2

When a monolithic blockchain upgrades, the whole stack moves as one. While the monolithic chains may tout this as an advantage, they are arguably closer to the “closed source” paradigms of web2 than many care to admit. Developers must conform to new infrastructure, regardless of whether it is optimal for their dApp (Yes, they could choose to fork, but this comes with its own risks and limitations).

Within a modular paradigm, developers have a greater degree of choice over how their dApp is composed at every layer, giving them greater autonomy over what they create. Developing open and collaborative infrastructure fosters greater resiliency and trust among the developers who elect to build on it. In this regard, modularity shares strong parallels with the open-source approach to software development. 

Linux is a prime example. An open-source framework with decades of tooling, libraries, and resources, Linux is effectively one of the greatest demonstrations of decentralized software we have seen in our time. It is upgraded by a global community, free from shutdown risks, and versatile in building a variety of applications. 

Just as the open source movement has played an essential role in the global technological infrastructure of today, the modular approach is a natural and essential part of the evolution of the web3 landscape. And the drawbacks are similar—when a modular protocol upgrades, the stack risks fragmentation if not planned and governed effectively. However, the ubiquity and success of open-source software prove that effective governance is possible. It is simply a matter of collaboration in its design.

More governance, not less

On a macro level, we must remind ourselves that modular layers are inherently interdependent; they cannot stand alone. This means communication and cooperation are fundamental to the progress of this movement. That being said, modularity will arguably require more governance, not less. 

Stability comes from culture. Off-chain governance must perpetually create a culture that rewards rational and reasonable discourse, whether technical or public. It must center around a shared purpose and vision of what the technology is ultimately being built for. All decisions must orbit around that purpose. 

Imagine a system of decentralized off-chain governance that existed between different modular protocols as well—a soft-power social framework that helps establish a level of consensus around shared goals and objectives. A system to determine mutual benefit and continued compatibility without coming at the expense of innovation or decentralization. 

Strong systems must exist at the ecosystem level of every protocol. Environments where levels of debate, consensus, and action can be reached within a decentralized community. It could help foster greater alignment both within and between protocols as these technologies evolve.

On-chain governance has a distinct role here as well, as developers need a system that is as reliable and enforceable at the dApp level, as the protocol level. We are actively experimenting with developing on-chain governance mechanisms that can help dApp developers make these upgradability decisions. While in very early iterations, the intent is to address the complexities of the upgrading process within a modular framework. It is an experiment in what developers need to consider when the foundation beneath them shifts.

Blockchain modularity won’t succeed unless we commit to collaboration

Blockchain modularity is rapidly gaining momentum as an alternative to the monolithic framework as the industry standard. More and more protocols have been developed at every level of the stack, promising more efficient and scalable solutions that can power the most sophisticated of dApps. 

The modular paradigm is necessarily underpinned by a more collaborative approach to decentralized technology where it was previously considered more competitive. For it to succeed, we need to begin asking critical questions about how we collaborate effectively and optimally to reach our shared goals.

Felipe Argento is a Cartesi co-founder and advisor at the Cartesi Foundation, a non-profit organization dedicated to supporting the Cartesi technology and the decentralization of the Cartesi ecosystem. Since 2018 when Felipe joined Cartesi, Felipe has been focused on L2 research and application. Initially, Felipe led the blockchain engineering team, making notable contributions to the architecture and design of Cartesi Rollups while leading the on-chain implementation team. Prior to Cartesi, Felipe was a co-founder and Advisor of GoBlock, which provides consulting services and develops applications for blockchain technology, and was a software engineer focusing on blockchain applications for clean energy, carbon credit, and energy futures in a partnership with Brazilian energy companies.