What is Based Rollup that can inherit Ethereum’s liveness?

Author: 0X Natalie 0XNATALIE, Source: Author's Blog 0X Natalie 0XNATALIE

With the completion of the Cancun upgrade and the reduction of L2 Gas fees, the market's focus has returned to L2 again. Among the Rollup L2 solutions, there are currently mainly idol types: Optimistic Rollup and ZK Rollup. Optimistic Rollup benefits from its mature market application and involves most of the market's contributions. However, both Optimistic Rollup and ZK Rollup have some problems. In order to solve these constraints and further optimize efficiency and decentralization, Based Rollup came into being. It not only simplifies technical complexity and reduces transaction delays, but is also the only solution that fully inherits Ethereum's liveness. Among all known projects, only ZK Rollup team Taiko is currently developing a solution based on Based Rollup.

Problems with Existing Rollups

Optimistic rollups require a challenge window of several thousand days, usually 7 days, to resolve potential pitfalls when confirming transactions. This behavior-waiting design causes funds to take thousands of days before they can be withdrawn, undermining the entire transaction process. And during the peak of the Ethereum network, Optimistic Rollup involves high gas fees when processing fraud proofs. Although ZK Rollup can provide faster transaction confirmation times and reduce transaction data storage on the chain to save fees, it consumes a lot of computing resources and time in the process of generating zero-knowledge proofs, resulting in costs and transaction processing speed (TPS) being affected.

In short, the technical complexity of Optimistic Rollup and ZK Rollup requires them to maintain a complex set of infrastructure and security mechanisms to process and verify L2 transactions, which has a negative impact on transaction costs and network efficiency.

Rollup-based solution

Justin Drake, a researcher at the Ethereum Foundation, proposed Based Rollup in March 2023, which can effectively overcome these problems. Based Rollup, also known as L1-sequenced Rollup, is a Rollup that is fully driven by the basic L1. This design allows L1 proposers to collaborate with L2 searchers and builders without permission, including Rollup direct blocks in L1 blocks, and evenly giving priority to L1 validators in sorting rights. The consensus layer, data availability layer, and settlement layer based on Rollup are all Ethereum, and only the execution layer is built on the Rollup network, which is responsible for handling the execution and status updates of transactions. It is worth noting that Based Rollup solves the Rollup efficiency problem from the perspective of sorting, and Optimistic Rollup and ZK Rollup are classified differently from the perspective of verification. Because of the different dimensions, it does not conflict with the classification of OP and ZK. On the contrary, if Optimistic Rollup or ZK Rollup gives the sorting right priority to L1 validators, it can be called Based Rollup. Based Rollup inherits its security and activity by transferring the responsibility of transaction sorting to L1, while optimizing the performance of L2. It is the only Rollup solution that inherits 100% activity of Ethereum. This design brings the following advantages: Inheritance of activity: The security and decentralization of Based Rollup are exactly the same as Ethereum, and no additional security mechanism or consensus algorithm is required to ensure the validity and order of transactions. In contrast, Rollup with an escape hatch mechanism is safer, faster and more convenient. In a Rollup with an escape hatch mechanism, if the Rollup fails or is attacked, users can safely return their funds to L1 through the escape hatch, but they must wait for a period of time to guarantee settlement.

Challenges Based on Rollup

Although Based Rollup can solve some of the shortcomings of the current Rollup solution, the technology also faces some challenges:

• Income restrictions: Relying on L1's sorting limits the opportunity to obtain MEV, and most of Based Rollup's MEV will flow to L1 validators. Based Rollup itself cannot directly batch materials.

• Sorting flexibility: Delegating sorting tasks to L1 may reduce sorting flexibility, affecting the implementation of specific transaction sorting strategies and fast transaction confirmation. For example, L1's sorting decision may be that miners choose to prioritize certain transactions to maximize their own interests, so if you want to implement an FCFS (First-Come First-Served) mechanism sorting similar to Arbitrum in Based Rollup, additional technical support (such as EigenLayer) is required.

Building Rollup-based projects

Since the concept of Based Rollup has only been proposed for a year, it is a relatively new concept, and its theoretical and implementation details are still in the exploration and improvement stage, so there are few projects building Based Rollup. Currently, the similar project is Taiko. Taiko is an L2 that uses ZK Rollup technology and has developed Type-1 zkEVM, providing complete opcodes and functions with Ethereum, ensuring high compatibility with the existing Ethereum ecosystem. Soon after the Rollup concept was proposed, Taiko began to build a validator based on Rollup to sort transactions on Ethereum, and used Ethereum as a settlement and data sharing layer and consensus mechanism to simplify the Rollup structure. On January 15, 2024, Taiko launched the Katla testnet, implementing Based Contestable Rollup (BCR), a Based Rollup that incorporates the dispute resolution process (similar to the fraud proof system) into the transaction verification workflow.

Future Outlook

Although the development of Based Rollup may require more time and resources, as well as dual verification of the market and technology. But in the long run, Based Rollup's enhanced security, centralized characteristics, simplified structure and goal consistency will gain an advantage in market competition. Especially in the field of DeFi, Based Rollup has developed faster transaction confirmation speed and preferential transaction costs, which has significant potential advantages. It is believed that with the continuous improvement of technology and the gradual recognition of the market, Based Rollup is expected to gain a place in the Rollup L2 solution market.