6.2 Modular Execution Layers for Subnets

First introduced in platforms like Avalanche and further popularized by ecosystems such as Celestia and Ethereum’s rollup roadmap, modular execution layers enable blockchain networks to optimize smart contract performance while offering support for multiple virtual machines (VMs). These include the Ethereum Virtual Machine (EVM), WebAssembly (WASM), and MoveVM, each tailored for different technical needs and security models.

From Monolithic to Modular: The Architectural Shift

Legacy blockchain architectures, including Bitcoin and early Ethereum, operate as monolithic systems—each node processes all functions, from transaction validation and smart contract execution to consensus and data storage. While secure, this approach lacks scalability and often results in network congestion, high fees, and reduced throughput.

In contrast, modular blockchains distribute these functions across specialized layers:

• Execution Layer: Processes transactions and runs smart contracts.

• Consensus Layer: Ensures agreement on the state of the chain.

• Data Availability Layer: Guarantees that transaction data is accessible.

• Settlement Layer: Finalizes and bridges transaction results.

This model allows each layer to optimize independently, enabling faster innovation and targeted performance improvements.

Modular Execution Layers in Subnets

In blockchain subnet architectures—such as those used by Avalanche—modular execution layers allow each subnet to deploy a custom virtual machine, select a specific consensus algorithm, and define application-specific governance. These execution environments can function independently while maintaining interoperability with the broader network.

By supporting multiple smart contract execution environments, modular subnets unlock performance and security enhancements that traditional blockchains cannot provide.

Support for Multiple Smart Contract Execution Environments

1. Ethereum Virtual Machine (EVM) Compatibility

The EVM is the most widely adopted execution environment for smart contracts, powering Ethereum and many EVM-compatible Layer 1 and Layer 2 chains. In subnets, EVM compatibility enables:

• Seamless migration of dApps from Ethereum

• Familiar development environments for Solidity developers

• Access to tools like MetaMask, Truffle, and Hardhat

This interoperability lowers the barrier for developers and fosters a more inclusive, cross-platform dApp ecosystem.

2. WebAssembly (WASM) Integration

WASM is a high-performance execution format that allows smart contracts to run at near-native speed. Benefits include:

• Support for multiple programming languages (e.g., Rust, C++, Go)

• Improved computational efficiency

• Cross-platform compatibility

WASM is particularly suitable for compute-intensive applications such as on-chain gaming, AI logic, or complex DeFi simulations.

3. MoveVM for Secure Asset Management

MoveVM runs the Move programming language, originally developed by Facebook’s Libra project. Move introduces a resource-oriented programming model, where digital assets are treated as linear resources—they cannot be duplicated or discarded accidentally. Key advantages:

• Prevents double-spending

• Enhances smart contract auditability

• Improves security for asset management

This makes MoveVM ideal for sectors requiring strict asset control, such as finance, insurance, or tokenized real-world assets (RWAs).

Advantages of Modular Execution for Subnets

Capability	Impact
Enhanced Flexibility	Developers can choose EVM, WASM, or MoveVM based on use case—no one-size-fits-all constraint
Performance Optimization	WASM supports near-native speed; execution subnets can scale independently
Security Reinforcement	MoveVM prevents common vulnerabilities (e.g., reentrancy, asset misuse)
Ecosystem Interoperability	EVM support allows cross-chain dApps and shared tooling

This flexibility fosters innovation at the infrastructure layer, encouraging developers to build highly specialized subnets for sectors like DeFi, gaming, supply chains, and AI.

Adoption in Practice: Avalanche and Beyond

Avalanche

Avalanche’s Subnet model allows for independent execution environments:

• Subnets can be deployed with custom VMs, including Avalanche’s own Avalanche Virtual Machine (AVM).

• Validators must also validate the Primary Network, staking a minimum of 2,000 AVAX, ensuring shared security.

• Over 50 subnets are active as of Q1 2025, covering use cases from DeFi ecosystems to regulated finance.

Celestia

Celestia modularizes consensus and data availability, enabling developers to build sovereign rollups that post transaction data to Celestia but run their own execution logic.

Ethereum

Ethereum’s roadmap has shifted toward a rollup-centric model, encouraging developers to deploy custom execution layers as Optimistic or ZK Rollups, inheriting Ethereum’s security while scaling independently.

Use Case Applications

DeFi and Asset Tokenization

Execution subnets running MoveVM can securely handle tokenized securities or stablecoins with fine-grained access controls.

Gaming and Virtual Economies

WASM-powered subnets provide low-latency environments for managing NFTs, in-game economies, and high-speed transactions.

AI and High-Performance Compute

Subnets can host execution layers that validate AI computations or train models off-chain, reporting outcomes via verifiable smart contracts.

Technical Considerations and Trade-Offs

Challenge	Implication
Cross-VM Communication	Requires standardization for dApps to operate across subnets with different VMs
Security Complexity	Each VM has its own threat model and must be independently audited
User Experience	Fragmentation may confuse users unless unified interfaces and wallets are used
Infrastructure Overhead	Maintaining multiple VMs increases node resource requirements

These challenges are being addressed through universal wallet integrations, multi-VM toolchains, and shared sequencer architectures.

The combination of modular execution layers and subnet architecture represents a pivotal shift in blockchain infrastructure. By supporting EVM, WASM, and MoveVM within the same ecosystem, networks can achieve a balance between developer freedom, execution performance, and network security.