Restoring the Essence of Ethereum: A Guide to Rollups in Action

Hey there! Let’s talk about Ethereum and how it’s evolving with the introduction of based rollups. If you’ve been following Ethereum’s journey, you know that L2s have helped reduce congestion and gas fees but have also created a bit of a fragmented ecosystem.

Each L2 is like its own little island, making it hard for liquidity to flow freely and for users to navigate between different L2 solutions like Base, Arbitrum, or Starknet.

But hold on, based rollups might just be the solution we’ve been waiting for. They have the potential to bring back interoperability and composability, allowing different DeFi protocols to seamlessly interact with each other like “Money Legos.” In essence, based rollups could make Ethereum feel like Ethereum again.

The heart of the matter is the use of individual sequencers on L2 networks. These sequencers order transactions, but when they’re centralized, they create isolation between L2s. Based rollups aim to address this issue by shifting transaction sequencing back to the Ethereum L1.

This approach not only provides enhanced security and cohesion but also supports cheaper and faster transactions while contributing to Ethereum’s sustainability. Taiko Labs is one of the pioneers in this space, returning significant revenue to Ethereum with its based rollup solution.

However, there are still some challenges to overcome. For users to fully benefit from based rollups, other L2 networks need to adopt them as well. While the technology is promising, synchronous composability between different rollups is still a work in progress.

Centralized sequencers come with their own pros and cons, offering faster transaction processing but also raising concerns around censorship and single points of failure. While these issues may keep idealists up at night, the real struggle for users is moving funds between L2s.

Overall, based rollups show a lot of potential in making the Ethereum ecosystem more interconnected and user-friendly. With continuous development and adoption, we might just experience a new era of DeFi on Ethereum. Stay tuned for more updates on this exciting journey!