The Coordination Layer for Sustainable Rollup Revenue
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About this video
Chain Abstraction Day at EthCC 2024 in Brussels on July 10th, bringing together NEAR and Agoric for our third installment in the year-long series.
Speaker: AJ Park, Radius
AJ from Radius discusses the innovative approaches to overcoming liquidity fragmentation and decentralizing sequencers in the rollup ecosystem. Discover how chain abstraction can enhance user experience and explore the coordination mechanisms essential for the future of scalable rollups.
Takeaways: • Liquidity Fragmentation Challenge: Rollups face significant issues with liquidity fragmentation, which requires efficient coordination and sequencing solutions. • Centralized vs. Decentralized Sequencers: While centralized sequencers offer simplicity, decentralizing sequencers is crucial for scalability, censorship resistance, and overall network health. • Coordination Mechanisms: Effective coordination between multiple sequencers, including leader and follower roles, is essential for maintaining liveness and high performance in rollups. • Revenue Models for Rollups: Protecting users from malicious behavior and ensuring fair transaction inclusion can improve user retention and open up additional revenue streams. • Shared Sequencing Layer: The concept of a shared sequencing layer allows for cross-rollup transactions and arbitrage, increasing the potential for profit and user engagement.
Timestamps: 0:49 - Rollup Proliferation and Sequencer Challenge Discussing the growth of rollups and the need for sequencers. 1:45 - Operational Costs of Sequencers Understanding the cost implications of running sequencers. 2:52 - Centralized vs. Decentralized Sequencers The debate over centralized versus decentralized sequencers. 4:46 - Coordination Mechanism for Rollups Explaining the necessary coordination between sequencers and users. 6:03 - Properties of Decentralization Diving into censorship resistance, liveness, and safety. 7:00 - Revenue Models and User Protection How to create sustainable revenue models while protecting users. 8:00 - Shared Sequencing Layer Concept Introducing the shared sequencing layer and its benefits. 9:00 - Radius Coordination Layer Overview of Radius's approach to building a block space network.
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Transcript
1,333 wordsCaptions as YouTube publishes them, usually machine-generated, so product and people names can be misheard.
- 0:08
yeah this is AJ um cound of radius uh my talks actually about the wops and the coordination layout to help wops sustain in economical way but um I think that the approach the that the chain obstruction has to provide better user experience can be used also to solve the big problem that rollup area has which is the fragmentation or liquidity fragmentation so I'm really excited to
- 0:41
be here okay okay so um we all know that there will be a millions of rollups coming um thanks to the mature rollup SDK and uh rollup as service providers uh we can easily deploy our own rollups and then enjoy our flexibility and scalability um but compared to the smart contract there there is one thing that you should um need to come up um to solve uh which is the you need to run a
- 1:18
sequencer node to keep the latest State Of Your World of network which means that the running sequences um uh needs to be uh covered like it's kind of a operational cost that you need to cover so you need to some somehow robust Revenue model to cover this operational cost um if you uh if you use this the roller better service providers you usually end up with these centralized sequences but uh my question is are we
- 1:51
actually okay with these centralized sequences some people that we are okay because even though these centralized sequences stop working for like a for more than 14 hours 40 hours there's no impact on this rollups but I don't think that's um that's uh I don't think centralized sequen is okay so it's I I think it's time to decentralize sequences so but um decentralized uh for rollups is kind of
- 2:20
different from uh decentralized on uh Bas layer such as um Nea or ethereum because um when we think of why we came up with this concept of rollups is uh we need a scalability so when we when you think of about this decentralization we also um put this scalability on the top of priority so um I will explain what kind of approach the radius has the to do bring this decentralizing
- 2:52
decentralized sequences for wops and then we put the scalability on top of the our priority so before going uh into deep about um the whole Revenue model and uh rollup I'd like to uh briefly uh tell you about the what happen when you create transitions on rollup uh to be ended up confirming the on base layer for finality when you send uh your transitions uh sequences on rollup and then sequencer make a block and then this blog will be go to a builder and relay and then finally um L1
- 3:31
base layer proposal uh to confirm the the uh the transitions for finality so I we think that this coordination mechanism is kind of needed because there are so so many entities for your transitions to be uh to confirm um uh on layer one based layer so okay so um there are three properties for decentralization censorship resistance Liv and safety I will go um one by one um first sensorship resistance um it's
- 4:05
kind of a coordination between a user and a sequencer for rollup um because it's kind of a centralized sequencer or there should be only one single sequencer for scalability um we can use encrypted mle so um even though there is one only single sequencer this sequencer cannot see your content while confirming the order of transactions so that's why we can get a sensorship resistance so and
- 4:29
then also um after this sequencer get transactions from your user this sequencer needs to issue pre-confirmation saying that your transactions will be included in a specific index of next block so that's how we can get our censorship resistance stuff um another one is livess um as I said before um some rops actually stopped for stop working for many hours so liveness is the most um requirement that these rollups actually
- 5:02
wants to have so um liess is kind of a coordination mechanism between multiple sequences in uh uh sequence sets so which means that as I said before we uh radius use this leader based sequencing for scalability uh and a high performance for rollups there's only there are multiple sequences in a sequencer set and one leader is one sequencer is going to be elected randomly as a leader so this leader builds block and issue pre
- 5:34
confirmation for users and then followers just to keep track about this uh the whole transition and pre-confirmation just in case this leader stop working so that's how we guarantee this liveness and then we this uh this this is kind of um we can guarantee the high performance because only leader take care of the old the Transitions and then pre confirmation thing and then um we think that this bft
- 6:00
kind of consensus mechanism is somehow compromised scalability for rollups so um um because that we use the the encrypted mle just crash fault tolerance is only needed um consensus mechanism for this so that's why we can uh get a high performance for that another one is safety I'm not going to details about that but safety means that um like a just for example if if a sequence issue of pre confirmation to user there is no guarantee that um
- 6:34
thater one proposal is going to include your transactions so um we use this based sequencing based sequencing concept is that to make L you want based layer proposer to become sequencer for rollups so they can guarantee the inclusion of the whole transactions when they issue this pre-confirmation for users so that's how we guarantee sensorship resent livess and uh safety so this decentralized sequencing thing is kind
- 7:05
of really important because current Revenue model for rollup is actually from the the users transitions transition fee which means that we need to uh protect these users from any malicious behavior such as censorship censorship or front running s attack so that's how we prevent user uh attrition from happening and then also we can come up with some kind of additional Revenue model that um we can apply this share the sequencing
- 7:39
concept actually radius is known as like a Shar the sequencing layer but it's more than we um developed um couple of more uh sequencing Solutions other than shared sequences so um shared sequencing it's kind of a coordination between one Shar the sequencer and sequencers for multiple rollups which means means that this one Shar sequencer is going to build a block for these rollups and then
- 8:04
make sure that uh cross rollup transitions actually included in a specific uh these multiple rollups uh simultaneously so we can guarantee automic inclusion and then couple up with additional mechanism we can also guarantee automic execution so uh such as like flash LA or any any kind of um cross roll of Arbitrage can have happen with this one so which means that we can provide much more additional uh user scenario such as cross roll of transfer
- 8:36
so there should be many transitions so um which means that rops can get more much more profit from that so this is my last uh slide that this is the uh radius um coordination layer I'm not I didn't go in uh details about that but actually we um are we are right now make uh building this block space Network connecting um Builders which is kind of sophisticated actor to build rollups to generate much
- 9:08
more higher profit and rollups uh block space so these rollups can generate much more profits while selling their BL space to builders and also they can protect users from these malicious attacks such as the the censorship and um harmful M stuff okay uh that's it um thank you for listening