Blockchain technology has soared in popularity, offering decentralized solutions for various industries. Yet, as adoption grows, so do its limitations, particularly around scalability and cost. Here is where based rollups come in—a cutting-edge Layer 2 scaling solution redefining how blockchains handle massive transaction loads. Proposed by Ethereum researcher Justin Drake in 2023, this approach builds on existing rollup technology while sidestepping its inefficiencies.
Based rollups are a type of Layer 2 scaling solution designed to enhance the performance of blockchain networks like Ethereum by leveraging the capabilities of the Layer 1 (L1) blockchain for transaction sequencing. Unlike traditional rollups, which use their own dedicated sequencers to process and organize transactions, based rollups rely on the L1 network itself—specifically its validators, proposers, and searchers—to handle these tasks.
The Basics of Based Rollups
A rollup is a scaling technique that processes transactions on a secondary chain before bundling them into the main blockchain, or Layer 1 (L1). Traditional rollups, like Optimistic and ZK-rollups, require independent sequencers or complex cryptographic proofs. Based rollups, however, take a different route: they utilize Layer 1’s infrastructure directly for transaction sequencing, ensuring greater decentralization and simplicity.
In essence, they rely on Ethereum’s inherent properties—security, liveness, and decentralization—to streamline processes. Instead of adding complexity, based rollups strip it down, delegating sequencing tasks to existing Ethereum validators.
How Based Rollups Operate
Unlike traditional Layer 2 solutions, which require external mechanisms, based rollups integrate seamlessly with Layer 1 systems. Here’s a quick look at how they function:
- Transaction Handling: User transactions are initially grouped on the rollup chain.
- Sequencing: Ethereum’s validators, or “block proposers,” sequence these grouped transactions.
- Batch Submission: Bundled transactions are sent back to Layer 1, where they’re validated and finalized.
- Simplified Validation: By using Ethereum’s consensus model, based rollups avoid the need for additional proof systems.
This approach eliminates the need for custom sequencers, making based rollups a leaner and more accessible solution.
Advantages of Based Rollups
By integrating tightly with Layer 1 blockchains like Ethereum, they provide a host of benefits that address key pain points in the blockchain ecosystem. Below are the standout advantages that make based rollups a compelling choice for developers and users alike.
Decentralization
By leveraging Ethereum’s validator set, based rollups inherit a robust, decentralized framework. Anyone within the Ethereum ecosystem can participate, enhancing transparency and trust.
Cost Efficiency
Traditional rollups often incur high gas fees due to added layers of processing. Based rollups, on the other hand, avoid these costs by using Ethereum’s existing infrastructure. This translates to significant savings for users and developers alike.
Streamlined Architecture
Without extra layers like escape hatches or external consensus mechanisms, based rollups boast a simplified design. This minimalism reduces operational complexity and increases reliability.
Permissionless Participation
The model is inherently inclusive, allowing anyone to add transactions to the next block without needing special permissions.
Challenges on the Horizon
No innovation comes without hurdles, and based rollups are no exception. Here are some pressing concerns:
- Scalability Bottlenecks: Depending on Ethereum for sequencing introduces a ceiling on transaction throughput, limited by the Layer 1 blockchain’s capacity.
- Limited MEV Capture: Maximal Extractable Value (MEV) opportunities flow to Layer 1 validators, reducing potential profits for Layer 2 operators.
- Sequencing Flexibility: Relinquishing control to Layer 1 means less room for custom transaction prioritization or faster confirmations.
While these limitations may seem daunting, ongoing research promises potential solutions, from optimized Layer 1 designs to hybrid models.
Real-World Examples
Among the early adopters of based rollups is Taiko, a Layer 2 protocol blending ZK-rollup principles with this novel framework. Taiko’s testnet, launched in January 2024, demonstrated how based rollups could simplify transaction workflows while maintaining Ethereum compatibility. With its focus on dispute resolution and transaction verification, Taiko showcases the potential of this approach to address pressing blockchain challenges.
Projects like Taiko highlight how based rollups are not just theoretical concepts but practical solutions reshaping blockchain technology.
Comparing Based Rollups with Other Layer 2 Solutions
| Feature | Based Rollups | ZK-Rollups | Optimistic Rollups |
| Proof System | Layer 1 consensus reliance | Zero-knowledge proofs | Fraud proofs |
| Sequencing | Handled by Layer 1 validators | Custom sequencers | Custom sequencers |
| Complexity | Simplified | High | Moderate |
| Decentralization | High | Moderate | Moderate |
| Cost | Lower gas fees | Higher due to proof generation | Moderate |
The Road Ahead for Based Rollups
While still in its infancy, the concept of based rollups is gathering momentum within the blockchain community. Ethereum researchers and developers are actively exploring ways to address its current limitations.
If successful, based rollups could become a cornerstone for scaling decentralized networks without compromising their foundational principles of security and decentralization. While challenges remain, their potential to simplify processes and lower costs makes them a promising development for the future of decentralized technologies.
