Blockchain & Cryptocurrency Glossary

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Execution Layer

1 min read
Pronunciation
[ek-si-kyoo-shuhn ley-er]
Analogy
In a modular computer system, the execution layer is like the Central Processing Unit (CPU). It's the part that does all the calculations and runs the programs (smart contracts). It doesn't store all the data permanently (that might be a separate hard drive - data availability layer) or decide which programs to run in what order (that might be an operating system component - consensus layer); it just focuses on doing the computational work.
Definition
In a modular blockchain architecture, the component or layer responsible for executing transactions and smart contracts, thereby changing the state of the blockchain. It processes computations but may rely on other layers for consensus and data availability.
Key Points Intro
The execution layer is where transactions are processed and state changes occur in a modular blockchain.
Key Points

Responsible for computation and state transitions (e.g., running smart contracts).

In a modular system, it can be separated from consensus, data availability, and settlement layers.

Layer 2 rollups are often considered execution layers that settle on a Layer 1.

Optimizing the execution layer can lead to higher transaction throughput and lower gas fees for users.

Example
In Ethereum's post-Merge, modular architecture, the Ethereum Virtual Machine (EVM) and the client software that processes transactions (like Geth or Nethermind) form the execution layer. Layer 2 solutions like Arbitrum or Optimism also act as execution layers, processing transactions before submitting summaries to the Ethereum L1.
Technical Deep Dive
Execution layers can vary widely in their design, from EVM-compatible environments to entirely new virtual machines optimized for specific tasks (e.g., Solana's Sealevel or MoveVM). When decoupled, an execution layer typically receives ordered transactions from a consensus layer, executes them, and then outputs state changes. It relies on a data availability layer to ensure that the data needed to verify state transitions is accessible. The state root from the execution layer is then often committed to a settlement layer for finality.
Caveat
The precise responsibilities and boundaries of an 'execution layer' can differ based on the specific modular architecture. It's important to understand how it interacts with other layers, especially regarding security and data handling.

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