Rollup Sequencers Are Centralized — And That’s Fine

Blockchain

Centralization: the hideous enemy of freedom and progress within the realm of distributed ledger know-how. It usually rears its head as quickly as builders encounter scaling challenges.

In decentralized protocols, the quickest strategy to transfer from level A to level B usually mockingly includes resorting to some form of centralized mechanism. Overlook beliefs like censorship-resistance and independence, devs would possibly cry out, we simply need this factor to be fast and low-cost!

The hunt for additional decentralization within the blockchain area continues, however for some parts, Stephane Gosselin says, centralization won’t be such a foul factor, in any case.

The previous co-founder and chief architect of Flashbots and founding father of Frontier Analysis spoke to Blockworks on the Bell Curve podcast about layer-2 rollups and the way centralized sequencers won’t be the issue that many worry.

All rollup sequencers are centralized

Let’s get one reality out of the way in which to start with: All layer-2 rollups on Ethereum — each single one in every of them — use centralized sequencers.

The sequencer’s job is to course of and order transactions into blocks to be added to the chain. It’s cheaper, sooner and simpler for rollup suppliers to keep up their very own proprietary centralized sequencer system than to farm out the job.

“I’m nonetheless not satisfied that that’s a foul factor,” says Gosselin, “I don’t suppose it’s a achieved deal to say that, truly, first in, first out sequencers on a layer-2 are a foul factor.”

The standard argument in opposition to rollup centralization, Gosselin says, is that it creates a “latency sport” that attracts centralization towards a selected geographic area. Being concentrated in a specific place leaves a rollup vulnerable to censorship and oppressive regulation wherever the rollup is deployed, Gosselin says.

“However, nonetheless, the query is like, is that truly dangerous?”

Ethereum has been designed, Gosselin says, as a maximally decentralized layer-1 with comparatively little financial exercise on the bottom layer. Its aim is to settle information with out what he describes as “rivalry” — demand for selecting a selected place — which takes place inside layer-2s as an alternative.

“When you’ve got an structure the place the layer-1 is barely settling information blobs and there isn’t rivalry, and you’ve got all of the exercise within layer-2s, it reduces the centralization stress on the layer-1 considerably.”

Cross-chain messaging to the rescue

Cross-chain messaging may save the day, Gosselin says, offering censorship-resistance between layers when wanted. “You could have some strategy to push messages out from the layer-2 again into the layer-1, or possibly for it to be interpreted by another spin-up of that layer-2 some place else.”

By way of a messaging mechanic like IBC, Gosselin says layer-2s would stay censorship-resistant and non-custodial as a result of particular person rollup individuals can “exit their state and bridge it over to another roll-up in another jurisdiction.”

Host Mike Ippolito factors out that in such a scenario, customers would expertise important “market disruption.”

“There could be a time period the place we’d should migrate the property and every part down into the primary chain and again up onto one other rollup.”

The looming risk of disruption, Ippolito says, may “forestall TVL and exercise from migrating as much as the rollups as a lot as they in any other case would.”

Gosselin concurs, noting, “the opposite argument is, properly, in case you have a way for the state to have the ability to exit again to the layer-1,” he says, “then you’ve got loads of rivalry on the layer-1.”

“And so you’ve got all the identical centralization stress on the layer-1,” he says.

“I don’t suppose, by any means, it’s completely solved.”

“On the finish of the day, sure, you’re going to have trade-offs in these totally different execution environments,” Gosselin admits, however finally, app builders simply need an interface for connecting and mechanically deploying their companies.

“These shared sequencers or decentralized block builders, cross-chain bridges, are all in the identical sport of attempting to construct and supply these companies,” he says.

“There’s so many various methods to construct these items — and it’s not clear to me the place it’s going to go.”