Soon after, Fuel launched beta-1 of a testnet for developers, where developers may publish any contract without permission or whitelisting, and users can engage with the deployed contract.&nbsp; Fuel and Celestia are "blood brothers" in that they share a co-founder, John Adler, who was also an early supporter of Optimistic Rollup.Although the two development teams are generally autonomous of one another, they share key individuals; therefore, the two modular blockchains are technically complimentary. Fuel is pitched as a modular execution layer, while Celestia, which does not execute and solely deals with data availability and consensus, is designed for data availability and ordering.Fuel V1 was the first Optimistic Rollup on the Ethereum main network, implemented in late 2020, and was initially an L2 scale-up solution for a single Ethereum. However, pure L2 is severely limited by the performance of the main network, and even if the executive layer is partitioned out, it still cannot fulfill the goal of total scaling.Fuel is not pleased with this, and is attempting to optimize the base layer through the modular implementation layer, as well as enhance the L2 implementation state, in order to achieve true capacity growth. Fuel's creators see it as a "decentralized coordination hub" for exploring increased composability.<h2>Modular execution layer</h2>As we all know, blockchain is primarily used for three purposes: enforcement, consensus, and data availability.<ul><li>Execute: To update the status, execute a transaction.</li><li>Consensus: Define the state and ensure that all blockchain nodes have the same state.</li><li>Data availability: Making sure the block data is posted to the network.</li></ul>The three components of data, consensus, and execution are all mixed together in a network in a monolithic blockchain, and everything from validation to transaction execution must go via nodes. As a result, if nodes desire to retain the global replication state, they cannot assure network efficiency.To achieve decentralization, Ethereum, for example, demands that the hardware operating the complete node accept consumer hardware so that anybody may become a node. Users may demonstrate the chain's de-trust by running a complete node and confirming themselves. At the sacrifice of network scalability, security is ensured.Currently, the Rollup approach in Layer 2 capacity expansion mostly overcomes certain issues by breaking apart the execution layer. Calculations are moved to off-chain processing and execution; however, transaction data remains on the main chain, and Rollup does not enhance data availability, which means that Gas prices on Rollup continue to climb owing to main network congestion.Furthermore, Optimistic Rollup incurs the cost of state maintenance (storage) and execution expenses on L2, in addition to the cost of a primary network layer to publish data. However, Rollup is not currently concerned with the optimization state.Block space will no longer be a precious resource in the modular era, and the base layer will begin to supply additional storage space, therefore, data will no longer be a problem. And state and execution will soon become new bottlenecks.<h2>Fuel comes in</h2>As a result of the aforementioned issues, Fuel proposes the modular execution layer approach.First, deal with scalability difficulties such as light client and fraud prevention. Fuel follows a strategy similar to Optimistic Rollup. Most nodes are honest by default. As a result, when an assertion is published, it does not need the accompanying evidence of its validity but instead uses the technique of fraud proof to secure the right L2 network consensus. Assuming the blockchain is genuine, the light client merely gets the block header and verifies the transaction without receiving all the blocks.Light clients are less computationally intensive than complete nodes since they do not need to operate 24/7 and do not communicate directly with the chain.<img src="https://cdn.builder.news/news/11eda2e6950a4a2c8e59028438497b73.jpg" alt="light node fraud validity proof" title="light node fraud validity proof" width="600" height="278" class="lykafe0">Source: SubstackSecond, the new virtual machine FuelVM enhances EVM's inefficient and unproductive execution environment. FuelVM analyzes scalability from the standpoint of a modular execution layer, as opposed to a Rollup focused on expanding a certain base layer, such as Ethereum. Encourage computation over data and reduce the usage of state.Fuel is centered on being an execution component in a modular blockchain, which implies that the Fuel chain does not handle consensus or retain blockchain data. Fuel interfaces with other chains for consensus and data availability in operational blockchains, such as Ethereum or Celestia.In other words, Fuel is not content to be the L2 of any one blockchain, merely "painless" cost reduction, but more flexible and comprehensive, may also become L2, side chain, or even a state channel. Celestia, for example, stresses "pluggable" flexibility.<h2>Use cases of Fuel</h2><img src="https://cdn.builder.news/news/11eda2e6950a522e8e59028438497b73.jpg" alt="fuel use case" title="fuel use case" width="600" height="332" class="lykafe1">Source: Fuel<h3>Either as a Rollup or as L2</h3>Fuel's modular execution layer design is comparable to L2, with Rollup as the primary Rollup deployed on Ethereum. The technological architecture of Fuel, on the other hand, differs from the Rollup of Zk and OP, yet it may be utilized as a validity or fraud-proof mechanism. Furthermore, Rollup is presently built for a monolithic blockchain architecture, therefore, it has restrictions, while Fuel can maximize the bandwidth potential of a one-tier primary network.<h3>As a Layer 1</h3>Running all components as a full L1 is part of fuel technology. Consensus, data availability, settlement, and execution are examples of these components. Proof of permission and proof of interest using the Tendermint-BFT style are common setups to run in this mode. However, the company claims that even if it works in principle as L1, it will be confined to the test network since Fuel is intended to improve current blockchains as a high-performance execution layer.<h3>As a route for status information</h3>FuelVM is a VM architecture with deterministic state systems, making it ideal for multi-party channel architectures in which all parties must explicitly grasp the actual state of the system at each communication step or window. However, no out-of-the-box channel setup based on Fuel technology is presently available.<h3>As a secondary chain</h3>Fuel technology also allows for functioning as a backup to current L1s. This signifies that there is a communication link between L1 and Fuel. The side chain will manage data availability in this architecture, while layer 1 will handle settlement. You may also run it in a semi-provable mode, which allows you to employ proof of fraud to assure improved validity by utilizing Layer 1 as an arbitrator.<h2>Execute transactions concurrently</h2>The benefits of fuel technology may be summed in three words: Parallel transaction support; an improved virtual machine called FuelVM; and Sway, a more developer-friendly specialized programming language.<img src="https://cdn.builder.news/news/11eda2e6950a59128e59028438497b73.jpg" alt="fuel selling points" title="fuel selling points" width="600" height="428" class="lykafe2">Source: FuelFuel and Starkware are technologically comparable in that they both produce their own specialized programming languages and new and more efficient virtual machines. When Starkware announced intentions to release Cairo1.0, Fuel co-founder John Adler quipped that many of Cairo's features and capabilities, Sway, had already been deployed.Parallel execution is becoming more prevalent in L1. Parallel execution is used by certain new public chains, such as Aptos, Sui, and Linera of the Move language system. In contrast, EVMs based on Ethereum employ sequential execution.The EVM conducts one transaction at a time in sequential execution, putting the others on hold until the trade is completed, and the block status is not changed, even though the two deals are independent. While this method of execution serves specialized use cases such as flash lending, it is inefficient and unscalable in general.Parallel execution allows transactions to be partitioned over many processor cores, increasing resource usage. Increasing hardware resources in a high-throughput chain directly correlates to the number of transactions that can be processed. The validator node may assign extra cores to accommodate the higher transaction load during high-frequency activity. The network may achieve better throughput during times of heavy demand thanks to the dynamic scaling of computer resources. Furthermore, parallel execution reduces transaction confirmation latency, so transactions do not have to wait dozens or hundreds of blocks or pay exorbitant fees for priority confirmation.Fuel is focused on being an execution layer in a modular blockchain, which implies that the Fuel chain does not handle consensus or store blockchain data. Fuel communicates with other chains for consensus and data availability in functional blockchains, such as Ethereum or Celestia.The UTXO model is used by Fuel to create forced access lists, which are lists that control access to the same portion of state. The approach is built on the idea of normative transaction ordering. The ordering of transactions in blocks simplifies detecting the correlation between transactions significantly in this scheme. Fuel has created a new virtual machine, FuelVM, as well as a new language, Sway, to implement this design.<h2>Sway, a new programming language</h2>Sway is a unique programming language created by Fuel that preserves the advantages of smart contract languages such as Solidity in the development environment while adopting the paradigm created in the Rust tool ecosystem.Sway, like Rust's borrow checker and security first semantics, emphasizes compile-time analysis and security. It also contains the syntax of Rust, therefore, it is very performant. Of course, Sway isn't general, and the objective is to improve VM support.FuelVM seeks to decrease the inefficient processing of standard blockchain VM designs while expanding developers' possible design area.FuelVM builds on the foundation of EVM. The primary distinctions are as follows:Instead of local context memory, FuelVM has a globally distributed memory architecture. FuelVM is intended for fraud detection. FuelVM contains many native assets (ETH is the sole native asset in Ethereum). In Fuel, every contract may cast its native UTXo-based asset and get native-level calls and optimizations by using a simple asset opcode.Bottom linesFuel has now announced the start of the grant program, online test network, SwaySwap, and other ecological initiatives but has not declared the main network's online time, which is likely to be in early 2023 at the earliest.In addition to the "modular implementation layer" notion suggested by Fuel, a growing number of two-layer expansion methods have emerged to present a more flexible implementation layer approach. Boba Network, for example, recently introduced the notion of a "multi-chain execution layer" to create a multi-chain ecosystem with Layer 1 EVM-compatible blockchains and announced agreements with L1, such as Moonbeam, Fantom, Avalanche, and others.AltLayer, a Rollup temporary execution layer scheme that recently received $7.2 million in initial investment, also offered the notion of "Rollup as a service" from the standpoint of developing dApps and building a transitory execution layer system powered by Optimistic Rollup. For example, prior to the consumptive event NFT Drop, developers may launch a temporary execution layer, and after the casting is complete, the asset is resolved at L1, and the execution layer is destroyed.Modularity is quickly becoming one of the industry's most cutting-edge trends, with many new initiatives springing up around the execution layer, data availability, and other aspects that might elevate blockchain user experience to new heights.<div class="pr-block-special">Disclaimer: This article is intended for and only to be used for reference purposes only. No such information provided constitutes advice or a recommendation that any investment or trading strategy is suitable for any specific name.</div>

Fuel Labs, a modular Blockchain Fuel developer, announced the closure of an $80 million fundraising round headed by Blockchain Capital and Stratos Technologies in early September last year. 

Fuel and the modular execution layer