Based rollups are gaining popularity in the Ethereum community, particularly due to their unique sequencer feature. Unlike traditional layer-2 solutions that rely on a centralized sequencer, based rollups defer execution duties to Ethereum layer-1 validators. This approach, known as “based sequencing,” offers advantages in terms of censorship resistance and interoperability. By using the layer-1 as a sequencer, based rollups ensure liveness guarantees similar to Ethereum layer-1 blocks and eliminate concerns about potential censorship by trusted centralized sequencers.
Another key benefit of based rollups is enhanced interoperability, with proponents like Justin Drake highlighting the concept of “synchronous composability.” This allows for transactions in Ethereum to be sequenced or bridged across different layer-2s simultaneously, enabling smart contracts on based rollups to interact with contracts on the layer-1 in near-instant finality within the same block. This level of composability aligns with the original vision of Ethereum, offering users seamless interoperability and significant cost savings.
Despite the advantages of based rollups, there are some drawbacks to consider. Since execution is now handled by layer-1 block validators, based rollups are limited by the layer-1’s 12-second block time. This constraint may impact the feasibility of features like synchronous composability, as real-time proving within a 12-second slot presents technological challenges. However, advancements in zk proofs and trusted execution environments are helping to address these issues, with projects like Taiko implementing multi-proof solutions.
One potential downside of based rollups is the loss of MEV as a revenue stream, as sequencing rights are no longer centralized. However, alternative methods like auctioning execution tickets to layer-1 block proposers provide a workaround. Additionally, the diminishing significance of MEV revenues compared to congestion fees suggests that the revenue model for rollups may shift towards congestion fees driven by synchronous composability. This aligns with the evolving landscape of blockchain economics, where congestion fees are becoming dominant sources of revenue.
Ultimately, based rollups aim to improve the user experience of Ethereum by reintroducing synchronous composability and layer-1 sequencing transactions. These features were inherent in blockchain networks from the beginning, reflecting a return to the core principles of blockchain technology. While the rollup-centric roadmap has influenced the evolution of layer-2 solutions in recent years, based rollups offer a compelling alternative that leverages the strengths of Ethereum’s layer-1 validators. With ongoing developments in technology and revenue models, based rollups are poised to play a significant role in the future of Ethereum scalability and interoperability.
