Make Ethereum Feel Like Ethereum Again: Based Scrolls Explained.

Ethereum's bundle-centric layer-2 roadmap has successfully bought congestion and exciting gas fees to the base layer – but at the cost of creating a decentralized ecosystem.

Designed to scale the network, L2s have become small islands in themselves, each with its own rules, systems and barriers.

Liquidity is siloed, users are stuck bridging between L2, and developers are forced to choose whether they want to build on Base, Arbitrum, or Starknet.

But in the last year or so, the community has started talking more and more about embedded coils as a possible solution to the problem. As the reputation suggests, established abstractions enable interoperability and integration and allow the concept of DeFi Summer's Money Legos to take off on L2s (which refers to interoperable DeFi protocols). In short, if they get everything they promise, established abstracts will make the Ethereum ecosystem feel like Ethereum again.

An important problem that based coils try to solve is the use of individual serializers on L2s – serializers are the engines that order transactions on the blockchain.

Learn about the L2 scaling roadmap for the first time from Vitalik [Buterin’s] The blog post was somewhat difficult for me to accept because it came with businesses,” blockchain engineer Teddy Knox told the magazine.

“Like L1 where you have a very large committee of nodes validating Ethereum, L2s have a central chain that has special permission to follow L2 blocks in their original form.”

Centralized chain breaks Ethereum L2s

Although centralized sequences can work very quickly and make their operators a lot of money, they contribute to the isolation of different L2s. Transactions on one of the L2 chains cannot easily be synchronized to interact with other L2s, and this inability to communicate is a major factor in the Ethereum roadmap FUD this year. (Interaction between L2s can still be achieved by other methods without a shared sequence, but this will be “asynchronous”, meaning not real-time).

Base rolls (not to be confused with Coinbase's L2 Base), proposed by Ethereum researcher Justin Drake, promise to solve this fragmentation issue.

Unlike traditional coils, based coils push the transaction sequence to Ethereum L1, which was the case before L2s were supported.

Daniel Wang, co-founder of Tyco Labs, said: “The decentralized approach not only secures Ethereum, but also contributes to its revenue and ecosystem connectivity, allowing for deep integration with the Ethereum mainnet and supporting the sustainability of the network by encouraging cheap and fast transactions.” With the first established package in production.

Tyco is returning about five times as much revenue to Ethereum as other blockchains with centralized series.

Integrated and based package

This sounds very promising, but as with anything, there are many problems.

For users to enjoy the benefits of based rolls, other L2s must also be accepted. In Tyco's case, they're working with the Nethermind Rollup Surge chain, which is specifically designed to allow users to bridge back and forth with Tyco without going through Ethereum.

But even though they are based on the same technology, the two coils still cannot be combined in the same way, Wang told Cointelegraph at DevCon.

“You have to have real-time validations to verify both changes at the same time,” he said. I don't think we're there yet, and we, as a project, can't wait for that to happen before we start.

Advantages and disadvantages of centralized series

When operated by a single entity or a small group, the chain can order transactions linked to a decentralized consensus or Ethereum's 12-second latency.

Sacrificing decentralization for many L2 networks was worth it to provide a transaction volume that Ethereum's L1 couldn't match, though it brought its own risks.

“If the series has to be taken down … it's going to impact performance, or they're going to be very successful in censoring your marketing if it doesn't have any other features,” explains Knox.

Using centralized ordering brings back many of the issues that decentralization and blockchain tried to fix in the first place, such as censorship and single points of failure – a big issue with MEV (Maximum Extractable Value) exploitation.

But such concerns only keep Ethereum ideas at night, for ordinary users, the biggest problem is switching between L2.

Duncan Townsend, a smart contract engineer at 0x, said the current process of linking funds from one Ethereum L2 to another is “not a great experience.”

“Unless you use an off-chain abstraction protocol, the cross-chain user experience in DeFi is bad,” he explains. “If you have fundamentals, you have the ability to integrate. It doesn't matter what chain your tokens are on; you can get them cheap and on demand on any chain you want.

If packages share this established sequencing framework, tokens and assets should be able to directly interact with each other without relying on a separate integration mechanism, allowing for native interoperability between packages.

Challenges in receiving established rolls

Based summaries use Ethereum's verifier network to sequence transactions across multiple L2s, resulting in a decentralized transaction sequence, creating a more unified and efficient ecosystem. Developers can develop DApps that work on all participating L2s.

However, getting existing L2s to agree to give up serial income will not be easy.

“There's a big hurdle to overcome in the action of established sequencing, which is that all these L2 sequencers are making a ton of money,” Townsend said.

According to data from Dune Analytics, ZKsync, the ZK-rollup, has received a cumulative payout of approximately 40,500 ETH ($125.5 million) since November 20. Optimistic Package Competitor Base received 20,904 ETH ($64.7 million), Arbittrum has 62,001 ETH ($192 million), while Optimistic received 6,916 ETH ($21.5 million).

Do you really want to give up that income from ideology?

Based rolls are good for Ethereum.

Although Wang is certainly speculative, he says established summaries contribute to the protection of Ethereum's underlying coverage because L2 activity reduces L1 activity, thereby reducing verifiers' income.

“Based summaries provide additional fees, tips, and MEV opportunities to L1 validators, which encourages more validators to secure the Ethereum chain. This ultimately makes all established summaries more secure,” says Taikou's Wang.

According to Growthepie data, Tyco is the highest paying Ethereum chain among the pack. In the year In the 30 days through Nov. 21, Tyco paid $1.29 million in gas bills, more than five times that of Arbitrum, which ranks second.

This makes it more profitable to be a validator and encourages crowding, which reduces the circulating supply of ETH and can help the price in the long run.

The Future of Ethereum: Fixed Rolls or Splits?

Established citations offer a possible solution to unifying the Ethereum ecosystem, but a sequential return to the main chain could also address old problems.

The main transaction for established bundles is limited by Ethereum's current 12-second block time, Wang said. Arbitrum works in less than a second.

“We are working with partners on pre-confirmation[transactions]which will not depend on short L1 block times to provide the best transaction experience for users. Users will see their transactions included in the block almost instantly,” says Wang.

The Ethereum network inevitably remains fragmented without a focus on interoperability, such as base pooling, while DeFi processors such as Solana continue to evolve as a unified layer-1, providing a more seamless experience for users.

“Essentially, ‘how big can we make the individual chains and individual wraps in terms of the transaction, and how fast can we adjust the flow when it needs to move from A to B? It can get there faster, and the user doesn't have to wait,” Knox said.

Townsend said established aggregations are “certainly” a solution to unifying the ecosystem, but it's still a novel concept, and an active ecosystem doesn't yet exist.

“You have this hurdle of persuading these L2 series to give up part of their income stream to set up and participate in this interconnected ecosystem,” Townsend said.

John Yun

Yohan Yun is a multimedia journalist who has been reporting on blockchain since 2017. He has contributed as an editor to crypto media outlet Forkast and covered Asian technology stories as an assistant reporter for Bloomberg BNA and Forbes. He spends his free time cooking and experimenting with new recipes.