Why Modular Design Is the Answer to Scalable DeFi
Last updated
Last updated
The early days of decentralized finance were shaped by protocols that did everything at once. They handled execution, settlement, logic and data storage in a single place. This worked when the number of users was small and the infrastructure was relatively simple. But as demand grew, the cracks became impossible to ignore.
Gas fees exploded. Transaction queues ballooned. And for many, interacting with DeFi became costly and frustrating. Bridging between chains, managing approvals, switching wallets, basic interactions turned into complex workflows.
That’s where modular design steps in, not as a nice-to-have, but as a necessity.
Modularity is a design principle rooted in breaking down a complex system into smaller, independent and interchangeable parts. Each part, or “module,” has a distinct function and interacts with others through well-defined interfaces.
In software, this leads to better maintainability, scalability and adaptability. In decentralized finance (DeFi), modularity allows individual protocols or infrastructure components to specialize in one function, whether execution, settlement or data availability, while working seamlessly as a whole.
Think of it like building with Lego blocks instead of pouring a single slab of concrete. Each piece can be removed, improved or replaced without disrupting the entire structure.
We’ve seen monoliths hit their limits before, especially in Web2. Tech giants like Amazon, Netflix and Google shifted to microservice architectures to scale faster, ship independently and solve issues without breaking everything else.
DeFi can follow a similar path, where protocols specialize and plug into one another seamlessly.
A modular DeFi system separates core functions into specialized components:
Execution Layer: Optimized for speed and low latency. Examples include high-throughput rollups like Arbitrum and zkSync.
Settlement Layer: Anchored on security and finality, like Ethereum L1.
Data Availability Layer: Systems like Celestia or EigenDA reduce onchain bloat and keep costs low by offloading raw data.
Security Layer: Shared sequencers, fraud proofs and validator networks provide integrity across modules.
Instead of a single chain doing everything, these layers communicate via standardized interfaces. That means better performance without compromising security or decentralization.
Modularity isn’t just a dev conversation, it directly impacts how users experience DeFi. With composable architecture, frontends and interfaces can abstract away backend complexity, letting users benefit from the best parts of the ecosystem without juggling tabs, chains or bridges.
Consider a typical DeFi user journey today:
Switch networks in MetaMask
Find the right bridge
Approve a token multiple times
Wait for confirmations
Manually input contract addresses
Now imagine the modular equivalent:
You initiate a single transaction
The system routes it through the most efficient path (e.g., bridging via AggLayer or CrossCurve, swapping via multiple DEXs, settling on L2)
You receive your result, fast, cost-efficiently and without leaving the interface
This is what modular infrastructure makes possible.
Let’s look at how modularity is already improving DeFi today:
1. Cross-Chain Swaps CrossCurve (a Haust partner) and similar protocols enable swaps that span chains behind the scenes. Users get a unified experience, even though the underlying liquidity is fragmented.
2. Automated Yield Routing Protocols like SuperFormfy use modular logic to route capital through the highest-yielding strategies, no manual rebalancing required.
3. Shared Security Networks EigenLayer enables protocols to leverage Ethereum’s validator set without bootstrapping their own. This reduces risk and speeds up launch time.
4. Data Availability Scaling Approaches like Near DA reduce costs for rollups by allowing them to offload data storage and focus on execution.
5. Protocols to Ecosystems Monolithic protocols tend to become self-contained ecosystems with high entry barriers and limited interoperability. Modular systems, on the other hand, are collaborative by design:
A DEX doesn’t need to build its own yield optimizer.
A bridge protocol can focus only on security and routing.
A vault system can plug into multiple liquidity sources without native integration.
Each layer focuses on doing one thing extremely well, and the rest of the stack benefits from that specialization. The whole system becomes more efficient, flexible and resilient.
With each market cycle, DeFi gets stress-tested. Gas spikes, rug pulls, liquidity crunches, all expose which protocols are duct-taped together and which are truly modular.
A modular design makes upgrades less painful. When a new execution layer comes out, the rest of the system doesn’t need to break. When a vault strategy gets deprecated, it can be swapped out without rewriting the entire application.
It means protocols can adapt to user needs, market trends and infrastructure shifts without starting from scratch.
At Haust, we’re aligning with this modular ethos. Our architecture is built to connect with external protocols, integrate new modules easily and prioritize user flows that adapt to the infrastructure, not fight it.
Whether it’s routing through optimal DEX liquidity, using account abstraction to streamline access or working with omnichain solutions for cross-network execution, we see modularity as the long-term design path.
And this applies not only to DeFi. One area where this principle is becoming even more important is in our work with AI agents.
As agent architectures evolve rapidly, staying locked into a fixed structure is a liability. With a modular AI agent framework, we can integrate newer models and swap out components without breaking the overall system. A new foundation model comes out, the old one is “out.” The same principles we apply in DeFi, flexibility, adaptability, composability, now power how we’re building agents for real-world automation.
Some core principles we’re building on:
Interoperability first: No closed loops. Haust connects to what’s best.
UX through logic: The user doesn’t need to know what chain they’re on, just that it works and it’s secure.
Composable vaults and routes: Yield strategies built to evolve as the ecosystem does.
We’re not here to rebuild the entire stack. We’re here to connect what already works, and make it seamless.
Because modularity isn’t just a DeFi pattern. It’s a foundation for everything we’re building next.