The Ethereum community is currently facing significant challenges as concerns grow about the platform’s future competitiveness. Recent discussions have highlighted critical design issues that need urgent attention, particularly regarding layer-2 fragmentation.
Understanding Layer-2 Fragmentation
In recent years, Ethereum has adopted a layer-2 scaling strategy, encouraging the development of auxiliary networks known as “layer-2 rollups.” These rollups have been instrumental in alleviating network congestion by offloading transactions from the main Ethereum chain. While this approach has successfully reduced fees and improved transaction speeds, it has inadvertently resulted in a fragmented landscape of layer-2 solutions.
One of the primary issues plaguing this fragmented ecosystem is the lack of interoperability among various layer-2 networks. Although these networks post their data back to Ethereum’s main chain, transferring assets and information between them can be cumbersome and costly. Moreover, the reliance on centralized sequencers—entities that control the ordering and posting of transactions—raises concerns about security, efficiency, and censorship.
Introducing Based Rollups
To address these issues, some Ethereum developers are advocating for a new class of rollups known as “based rollups.” Unlike traditional rollups, based rollups shift execution responsibilities back to Ethereum’s layer-1, allowing for greater security and interoperability.
In conventional layer-2 rollups, transactions are processed by a centralized component called a “sequencer,” which batches multiple transactions before submitting them to Ethereum. While this model offers efficiency, it also creates a single point of failure. If a sequencer malfunctions or acts maliciously, it can disrupt the entire network, leading to potential transaction delays or censorship.
In contrast, based rollups utilize Ethereum’s extensive network of validators for sequencing, reducing the risk associated with centralized control. This decentralized approach enhances transaction reliability and minimizes the chances of manipulation.
The Evolution of Ethereum’s Layer-2 Roadmap
Vitalik Buterin, one of Ethereum’s co-founders, outlined a rollup-centric roadmap in 2022 aimed at mitigating the high fees and slow transaction speeds of the base chain. This vision promotes the use of layer-2 rollups to facilitate a more scalable and efficient Ethereum ecosystem.
While various rollups like Optimism, Arbitrum, Base, zkSync, and Blast have emerged, the experience of navigating between these networks has become increasingly complicated. With around 140 active layer-2 networks, facilitating seamless communication—known as “composability”—between them has become essential for Ethereum’s continued growth and user experience.
Based rollups improve composability by sharing a sequencer with the main Ethereum chain. This allows them to make smart contract calls across different rollups almost instantaneously. As Ben Fisch, CEO of Espresso Systems, explains, “They effectively share a sequencer with each other and also with the layer-1, which allows for coordinated message passing between different based rollups.”
The Potential of Instant Interaction
With the shared sequencer model, based rollups can interact within the same Ethereum block, enabling rapid transactions. For instance, in one block, a user could withdraw assets, perform an operation on the layer-1 chain, deposit the assets back, conduct another transaction on layer-2, and withdraw again—all with minimal delay.
Challenges Ahead for Based Rollups
Despite the advantages presented by based rollups, several challenges must be addressed before widespread adoption can occur. Currently, only one based rollup, Taiko, is operational, and others are still in development.
A significant hurdle is proof generation. Based rollups need to produce and publish proofs every 12 seconds to align with Ethereum’s block time. Traditional layer-2 rollups typically utilize zero-knowledge (ZK) proofs, which can take minutes to finalize, or optimistic proofs, which may take days to verify potential fraud. For based rollups to function optimally, advancements in proof generation speed are necessary, though Fisch believes breakthroughs could be on the horizon.
Another concern involves Ethereum’s layer-1 proposers, who take over the role of sequencing transactions in based rollups. Motivated by profit rather than fairness, these proposers could potentially manipulate transaction ordering for their gain, introducing instability. To combat this, developers are exploring solutions like based pre-confirmations, which incentivize proposers to prioritize the interests of rollups.
While based rollups offer a promising avenue for reducing fragmentation in the Ethereum ecosystem, they are not a panacea. As Fisch summarizes, “Based rollups are one part of the solution; they are not the only solution, and not all layer-2s necessarily should or will be based.”
In conclusion, as Ethereum continues to evolve, the exploration of innovative technologies like based rollups could play a crucial role in enhancing the platform’s scalability, security, and interoperability. The road ahead is filled with potential, but it will require collaboration, creativity, and technical advancements to fully realize the benefits of a unified layer-2 ecosystem.
