While fragmented blockspace has enabled more users to onboard into crypto, it has also created a number of issues, namely illiquidity and fragmented liquidity. Having multiple blockchains constrains composable blockspace by making it necessarily difficult to transfer data and state across chains.

Layer 2s are another important topic when discussing fragmented blockspace and modularity of blockchains. Optimism and Arbitrum popularized optimistic rollups, and Starkware has processed billions of dollars in volume on StarkEx (the custom L2 built for dYdX), establishing a strong proof of concept for L2s. As more Layer 1s and decentralized applications use L2s for execution environments, interoperability between chains becomes more of a necessity to enable scaling.

At this point in crypto’s life cycle, it is abundantly clear that the future is multi-chain, where different blockchains compete for market share and attract new sets of builders, helping create new ecosystems in which communities thrive. Some protocols, which may be native to another chain, are increasingly looking to interact with those communities and capture revenues derived from that chain’s activity (Such as Opensea).

The importance of composable blockspace

Jevon’s paradox is the idea that when technological progress increases the efficiency of a commodity, the falling costs increase demand for the commodity. Blockchains and blockspace follow a very similar paradigm: the more reliable blockspace available, the more applications and demand there is for the network. Following the development of Ethereum, new primitives like AMMs, stablecoins, and NFTs were developed and found product market fit.

In this way, new use cases for cross-chain applications will ensue from the availability of more blockspace. Imagine a world where your favorite dapps accept currency from any blockchain, transactions are executed on rollups creating cheaper fees, and unified liquidity creates financial markets with deep liquidity and offers execution at the best prices.

Blockchains are not just distributed computing environments, but also social networks that come with their own set of beliefs and tradeoffs. While additional blockchains are not the only way to increase blockspace, they create an entirely new design space for developers to build applications and downstream user experiences. In addition to the importance of blockspace itself, the composability of the blockspace is increasingly important in our environment today as it allows for a more streamlined use of applications. The future will be multi-chain and bridges are the first stage in composing this fabric of blockchains.