Rollups New Solution: More Secure and Efficient Decentralization Sorting

Recently, a solution called Based Rollups has attracted attention in the industry. This solution aims to provide a more secure and efficient Decentralization ordering mechanism for Rollups, especially addressing the decentralization issues of orderers.

As an innovative technological solution, Based Rollups attempts to outsource the sorting function to the first layer network in order to achieve Decentralization of sorting. This not only reduces the risk of excessive centralization of current Rollups sorters but also significantly lowers transaction costs and enhances system activity.

Developers can easily deploy and manage their own Rollups chains based on the Based Rollups architecture, just like deploying smart contracts, while enjoying the security and Decentralization features of Ethereum.

Current Challenges Facing Rollups

Currently, ZK or OP Rollups rely on centralized sequencers to determine the transaction order. This centralized structure brings many risks, including sequencer failures and a decline in user trust, as well as the resulting MEV issues.

To mitigate these risks, many Rollups offer a "lifeboat" mechanism that allows users to exit the Rollups in the event of a sequencer failure. However, this approach increases latency and Gas fees, and may be subject to malicious sequencing, leading to MEV extraction.

Therefore, the industry urgently needs a Rollups solution with a Decentralization sorter.

How Based Rollups Work

In Based Rollups, the proPoSer of the first layer network can collaborate with the searchers and builders of the first layer network to include Rollups blocks in the next first layer network block without permission. This means that the order of the included second layer network blocks and the final ordering of transactions are determined by the proPoSer of the first layer network.

Typically, the first layer network proPoSer does not build the second layer network blocks on its own. Instead, each Based Rollups block is constructed by the second layer network builders, which does not increase the workload of the first layer network proPoSer.

The virtual machine of Based Rollups and the execution agent of Rollups serve as the execution layer to process transactions off-chain, while the order of transactions is determined by the Ethereum consensus layer from the consensus layer onward. Transaction data will also be published on Ethereum, allowing the transaction status to be verified on Ethereum eventually.

Advantages of Based Rollups

1. Inherit the censorship resistance of the first layer network and enhance transaction activity: Based Rollups are operated by Ethereum's first layer network proPoSer and validator nodes, inheriting Ethereum's censorship resistance without the need for an escape pod mechanism. This ensures the activity of transactions and avoids the delays and fairness issues caused by escape pods.

2. Reduce Transaction Costs: Transactions based on Rollups do not require additional Gas fees, nor do they need to verify the signatures of centralized sorters, and there is no need for escape pods or external PoS consensus, further reducing costs.

3. Inherit the decentralization of the first layer network, the system is simpler and more secure: Based Rollups only execute the transaction layer off-chain, while the consensus layer for ordering transactions, the data visibility layer, and the verification layer are all on the first layer network. This reuses the searchers-builders-proPoSer architecture of the first layer network, making the Based Rollups system very simple.

4. Flexible Token Governance: Although the sorting is delegated to the Layer 1 network, Based Rollups can still have governance tokens to collect base fees. Of course, tokenless implementation is also possible, as its correctness and fairness are guaranteed by Ethereum.

Challenges Faced by Based Rollups

MEV income decrease

MEV is an important component of the revenue from traditional Rollups, but most Based Rollups' MEV flows to the first layer network proPoSer, sacrificing the MEV revenue of Based Rollups. However, Based Rollups that hope to capture their own MEV may introduce some bribery mechanisms, such as including auction mechanisms in the first layer network contracts.

The flexibility of sorting is limited, unable to achieve pre-confirmation.

Based Rollups delegate ordering to the first-layer network, which reduces ordering flexibility, making it unable to achieve pre-confirmation and first-come, first-served (FCFS) ordering similar to Arbitrum. To address this issue, researchers have proposed using re-staking for design, where a portion of the first-layer network proPoSer commits to including Based Rollups blocks in the first-layer network blocks they propose in the future.

Improvement Plan

Some projects are attempting to integrate pre-confirmation with Based Rollups through innovative architectures, providing fast (100 milliseconds) confirmation times while retaining all the advantages of Based Rollups. This integration allows Based Rollup to maintain its original advantages, ultimately addressing the liquidity fragmentation issue in Ethereum and promoting a more unified and efficient Rollup ecosystem.

Pre-confirmation mechanism

The pre-confirmation mechanism ensures that the decentralized sequencer can effectively submit transactions to the Layer 1 network. Ethereum validators queue to propose blocks. If the pre-confirmers fail to fulfill their commitments, they will face penalties such as margin cuts to ensure higher reliability.

Quick Confirmation

By integrating pre-confirmation with Based Rollups, Based Rollups can provide a user experience comparable to centralized sequencers, achieving a confirmation time of 100 milliseconds while ensuring its liveness.

Features of the New Architecture

1. Users submit Rollup transactions, which are processed by validators and provide pre-confirmation.
2. Validators re-stake based on additional reduction conditions to ensure reliability.
3. The pre-confirmation penalty mechanism imposes additional reduction conditions on validators to prevent violations of pre-confirmation commitments.
4. Validators propose blocks to the Ethereum Layer 1 network, including the order of pre-confirmed Rollups.
5. The sorter contract accepts Rollup transactions.
6. The relevant treasury collects the congestion fees and contention fees generated by Rollup transactions, increasing the holders'收益。

No Gas Trading Scenario

Some innovative solutions allow users to earn income by locking assets in the Rollup native bridge, generating native yield. This makes it possible to support some application scenarios similar to transactions without Gas fees, which has significant implications for both Web2 and Web3.

Application Chain Based on Based Rollups

Developers can launch application chains based on Based Rollups as easily as deploying smart contracts, inheriting Ethereum's security and Decentralization characteristics. Developers can obtain transaction fees from the application's Rollups chain without having to operate a centralized sequencer, while also enabling cross-chain transactions and interactions.

Transactions by users on this application chain can be quickly confirmed within 100 milliseconds, and the pre-confirmation mechanism ensures that transactions are submitted to the first layer network.

Summary

Based Rollups provide a more secure and efficient solution for Rollups. This decentralized sorting method not only reduces the risks of current centralized sorters but also significantly lowers transaction costs and enhances system activity.

With the integration of the pre-confirmation mechanism and fast confirmation times, Based Rollups will become an ideal choice for various applications, including GameFi, ensuring user experience while guaranteeing transaction finality. In addition, application chains based on Based Rollups allow developers to easily deploy and manage their own Rollups chains without worrying about the operational issues of centralized orderers, while benefiting from Ethereum's security and Decentralization features.