Ethereum's Rollup-Centric Roadmap: Challenges and Solutions

Ethereum's rollup-centric roadmap has led to fragmented and separated blockchains, which has caused a lack of value transfer between rollups. As a solution, shared sequencer mechanisms such as Espresso, Astria, and Radius have emerged. However, these solutions introduce new trust assumptions, as such layers need their own security set, according to Taiko.

Crossroads

Ethereum has prioritized decentralization from its inception, which comes with certain constraints on user experience. These constraints arise from the challenges of designing a decentralized distributed system, such as dealing with global state and sequential execution. In contrast, other Layer 1 (L1) blockchains have opted for speed and low cost by sacrificing some decentralization. This has resulted in higher hardware requirements for their validators compared to Ethereum.

To address these issues, Ethereum adopted a rollup-centric roadmap four years ago, outsourcing execution to rollups to make the network more user-friendly until scalability upgrades like history expiration and statelessness are implemented. This approach has enabled Ethereum to achieve an average of 250 transactions per second (TPS) daily.

Shared Sequencing Layers

Currently, rollups use centralized sequencers, which pose risks of censorship, liveness, and Miner Extractable Value (MEV) extraction. Shared sequencers offer a decentralized alternative, providing finality, decentralization, fast transactions, and cross-chain atomicity. However, shared sequencers introduce an honesty assumption, requiring that at least half of the validators are honest. If this assumption fails, the network may lose liveness, affecting fast finality and transaction certification.

Shared sequencing layers create a marketplace where rollups can sell their blockspace to the highest bidders, redistributing MEV among all participating rollups. However, this system requires a large number of participating rollups to maintain its network effect. If a significant participant leaves, it disrupts MEV distribution and affects the network's overall value.

Neutral Composability: Be Based

Ethereum is considered the most credible neutral layer for building decentralized applications. Rollups that use Ethereum as their sequencing layer, known as “based rollups,” benefit from full composability with Ethereum and other based rollups. However, based rollups face challenges such as a 12-second block time, which limits transaction speed. Solutions like based preconfirmations and faster Ethereum block times are being explored to address these issues.

Based Preconfirmations

Based preconfirmations involve using a subset of Ethereum's validators to provide fast transaction confirmations to Layer 2 (L2) users. This approach is currently being tested successfully on the Helder testnet, enabling lightning-fast transactions on Taiko. However, based preconfirmations do not inherit Ethereum's full liveness and security, relying instead on a credible commitment from the current Ethereum proposer.

Faster Blocks

Faster block times on Ethereum would benefit based rollups by reducing the time required for transaction finality. The Single Slot Finality (SSF) consensus mechanism is being considered, which could finalize each slot in a few seconds. However, SSF is vulnerable to 33% inactivity leakage, posing a risk to network stability.

Despite the potential benefits of faster block times, Ethereum has chosen to prioritize decentralization and maintain support for solo home stakers. This decision aligns with Ethereum's long-term vision but requires careful consideration and community consensus.

Conclusion

As rollups become more popular, fragmentation and isolation pose significant challenges. Shared sequencing layers offer a solution for fast finality and cross-chain composability but introduce new trust assumptions. Based rollups, on the other hand, use Ethereum's existing infrastructure but face challenges with block times and revenue models.

Future solutions like based preconfirmations and faster L1 block times aim to improve the user experience without compromising Ethereum's alignment. The goal is to create a scalable, decentralized, and user-friendly ecosystem that stays true to Ethereum's vision.

The choice to be based or not is more than a technical decision; it reflects the direction of decentralized rollup frameworks.

Source: Taiko