The image I used as the banner for this article was created by the beautiful folks at Spire Labs. It provides a great visual overview of how different Layer 2 solutions utilize Ethereum's infrastructure. In this article, I will be expanding on Native and Based Rollups to give you a complete picture of how these architectures work and fit together. Spire Labs The Rollup Landscape: Four Key Components Any Layer 2 solution has four critical components, as shown in the left column of the image: Settlement - Where the final state is recorded and secured


Data Availability (DA) - Where transaction data is stored


Sequencing - Who decides the order of transactions


Execution - Who processes the transactions Settlement - Where the final state is recorded and secured Settlement - Where the final state is recorded and secured Settlement Data Availability (DA) - Where transaction data is stored Data Availability (DA) - Where transaction data is stored Data Availability (DA) Sequencing - Who decides the order of transactions Sequencing - Who decides the order of transactions Sequencing Execution - Who processes the transactions Execution - Who processes the transactions Execution Traditional L2s might use Ethereum for settlement and DA, but handle sequencing and execution independently. The "Based" and "Native" approaches aim to leverage more of Ethereum's infrastructure for increased security. Based Rollups: Ethereum-Powered Sequencing What Are Based Rollups? Based Rollups use Ethereum not just for settlement and data availability, but also for transaction sequencing. This means the order of transactions in a Based Rollup is determined directly by Ethereum's validators rather than by a separate sequencer. How Based Rollups Work Transaction Submission: Users submit transactions directly to Ethereum L1


Ethereum Sequencing: Ethereum miners/validators determine transaction order


Data Storage: Transaction data gets stored on Ethereum (in calldata or blobs)


Off-Chain Execution: The transactions are still executed off-chain by the rollup


State Commitment: The results are posted back to Ethereum for settlement Transaction Submission: Users submit transactions directly to Ethereum L1 Transaction Submission: Users submit transactions directly to Ethereum L1 Ethereum Sequencing: Ethereum miners/validators determine transaction order Ethereum Sequencing: Ethereum miners/validators determine transaction order Data Storage: Transaction data gets stored on Ethereum (in calldata or blobs) Data Storage: Transaction data gets stored on Ethereum (in calldata or blobs) Off-Chain Execution: The transactions are still executed off-chain by the rollup Off-Chain Execution: The transactions are still executed off-chain by the rollup State Commitment: The results are posted back to Ethereum for settlement State Commitment: The results are posted back to Ethereum for settlement Benefits of Based Rollups Censorship Resistance: No separate sequencer means no single point of control for transaction ordering


MEV Protection: Leverages Ethereum's MEV (Maximal Extractable Value) protections


Quick Soft Confirmations: Transactions gain some security as soon as they appear in the Ethereum mempool


Permissionless: Anyone can submit transactions without going through a controlled sequencer Censorship Resistance: No separate sequencer means no single point of control for transaction ordering Censorship Resistance: No separate sequencer means no single point of control for transaction ordering MEV Protection: Leverages Ethereum's MEV (Maximal Extractable Value) protections MEV Protection: Leverages Ethereum's MEV (Maximal Extractable Value) protections Quick Soft Confirmations: Transactions gain some security as soon as they appear in the Ethereum mempool Quick Soft Confirmations: Transactions gain some security as soon as they appear in the Ethereum mempool Permissionless: Anyone can submit transactions without going through a controlled sequencer Permissionless: Anyone can submit transactions without going through a controlled sequencer Challenges of Based Rollups Higher Latency: Transactions must wait for Ethereum block times


Higher Costs: Every transaction pays for Ethereum gas directly


Limited Throughput: Bounded by Ethereum's transaction capacity Higher Latency: Transactions must wait for Ethereum block times Higher Latency: Transactions must wait for Ethereum block times Higher Costs: Every transaction pays for Ethereum gas directly Higher Costs: Every transaction pays for Ethereum gas directly Limited Throughput: Bounded by Ethereum's transaction capacity Limited Throughput: Bounded by Ethereum's transaction capacity Native Rollups: Ethereum-Powered Execution What Are Native Rollups? Native Rollups use Ethereum not just for settlement and data availability, but for execution verification through the proposed EXECUTE precompile. This means the processing of transactions is directly verified by Ethereum validators. execution proposed How Native Rollups Work Off-Chain Sequencing: Transactions can be sequenced by a separate entity


Data Storage: Transaction data gets stored on Ethereum


Native Execution Verification: The EXECUTE precompile verifies state transitions


Settlement: Results are secured by Ethereum's consensus Off-Chain Sequencing: Transactions can be sequenced by a separate entity Off-Chain Sequencing: Transactions can be sequenced by a separate entity Off-Chain Sequencing Data Storage: Transaction data gets stored on Ethereum Data Storage: Transaction data gets stored on Ethereum Data Storage Native Execution Verification: The EXECUTE precompile verifies state transitions Native Execution Verification: The EXECUTE precompile verifies state transitions Native Execution Verification Settlement: Results are secured by Ethereum's consensus Settlement: Results are secured by Ethereum's consensus Settlement Benefits of Native Rollups Benefits of Native Rollups Full Security Inheritance: Rollup security is equivalent to Ethereum's


No Security Councils: Eliminates need for trusted operators or multisigs


Automatic EVM Compatibility: Native rollups automatically stay compatible with Ethereum upgrades


Simplified Development: Much simpler to build and maintain Full Security Inheritance: Rollup security is equivalent to Ethereum's Full Security Inheritance: Rollup security is equivalent to Ethereum's Full Security Inheritance No Security Councils: Eliminates need for trusted operators or multisigs No Security Councils: Eliminates need for trusted operators or multisigs No Security Councils Automatic EVM Compatibility: Native rollups automatically stay compatible with Ethereum upgrades Automatic EVM Compatibility: Native rollups automatically stay compatible with Ethereum upgrades Automatic EVM Compatibility Simplified Development: Much simpler to build and maintain Simplified Development: Much simpler to build and maintain Simplified Development Challenges of Native Rollups Challenges of Native Rollups Requires Ethereum Protocol Changes: The EXECUTE precompile must be added to Ethereum


Potentially Higher Costs: Native verification may be more expensive than optimized custom solutions


Potentially Limited Customization: Must follow Ethereum's execution rules Requires Ethereum Protocol Changes: The EXECUTE precompile must be added to Ethereum Requires Ethereum Protocol Changes: The EXECUTE precompile must be added to Ethereum Requires Ethereum Protocol Changes Potentially Higher Costs: Native verification may be more expensive than optimized custom solutions Potentially Higher Costs: Native verification may be more expensive than optimized custom solutions Potentially Higher Costs Potentially Limited Customization: Must follow Ethereum's execution rules Potentially Limited Customization: Must follow Ethereum's execution rules Potentially Limited Customization Ultra Sound Rollups: Based + Native Ultra Sound Rollups: Based + Native Ideally, what we want are what Ethereum researcher Justin Drake called "Ultra Sound Rollups". These are L2 solutions that are both Based AND Native. These would use Ethereum for all four critical components: Settlement on Ethereum


Data availability on Ethereum


Sequencing by Ethereum


Execution verified by Ethereum (via the EXECUTE precompile) Settlement on Ethereum Settlement on Ethereum Data availability on Ethereum Data availability on Ethereum Sequencing by Ethereum Sequencing by Ethereum Execution verified by Ethereum (via the EXECUTE precompile) Execution verified by Ethereum (via the EXECUTE precompile) This represents maximum security and decentralization, though likely with tradeoffs in performance and cost. However, these would more closely mirror the Ethereum L1 architecture in terms of security and decentralization than other options. The Spectrum of Trust The Spectrum of Trust What's fascinating about this approach is how it creates a spectrum of trust: Traditional L2s: Trust the sequencers, execution mechanisms, and security councils


Based Rollups: Trust the execution, but sequencing is secured by Ethereum


Native Rollups: Trust the sequencing, but execution is secured by Ethereum


Ultra Sound Rollups: Both sequencing and execution secured by Ethereum Traditional L2s: Trust the sequencers, execution mechanisms, and security councils Traditional L2s: Trust the sequencers, execution mechanisms, and security councils Traditional L2s Based Rollups: Trust the execution, but sequencing is secured by Ethereum Based Rollups: Trust the execution, but sequencing is secured by Ethereum Based Rollups Native Rollups: Trust the sequencing, but execution is secured by Ethereum Native Rollups: Trust the sequencing, but execution is secured by Ethereum Native Rollups Ultra Sound Rollups: Both sequencing and execution secured by Ethereum Ultra Sound Rollups: Both sequencing and execution secured by Ethereum Ultra Sound Rollups Practical Implications Practical Implications For Users For Users Security Choice: Can choose the L2 with the right balance of security vs performance


Consistent Experience: Native rollups will behave exactly like Ethereum


MEV Protection: Based rollups offer better protection against transaction manipulation Security Choice: Can choose the L2 with the right balance of security vs performance Security Choice: Can choose the L2 with the right balance of security vs performance Security Choice Consistent Experience: Native rollups will behave exactly like Ethereum Consistent Experience: Native rollups will behave exactly like Ethereum Consistent Experience MEV Protection: Based rollups offer better protection against transaction manipulation MEV Protection: Based rollups offer better protection against transaction manipulation MEV Protection For Developers For Developers Simplified Stack: Native rollups dramatically simplify the tech stack needed to run an L2


Sequencing Options: Can choose between the censorship resistance of Based sequencing or the performance of dedicated sequencers


Migration Path: Existing rollups could gradually adopt Based or Native components Simplified Stack: Native rollups dramatically simplify the tech stack needed to run an L2 Simplified Stack: Native rollups dramatically simplify the tech stack needed to run an L2 Simplified Stack Sequencing Options: Can choose between the censorship resistance of Based sequencing or the performance of dedicated sequencers Sequencing Options: Can choose between the censorship resistance of Based sequencing or the performance of dedicated sequencers Sequencing Options Migration Path: Existing rollups could gradually adopt Based or Native components Migration Path: Existing rollups could gradually adopt Based or Native components Migration Path The Future Landscape The Future Landscape As you can see from the Spire Labs diagram, there is a clear progression toward "more Ethereum" - with rollups leveraging more of Ethereum's infrastructure for increased security guarantees. This evolution depicts what the endgame of the Ethereum L2-centric roadmap would look like. A future where Layer 2s are not separate systems, but rather extensions of Ethereum itself, with different configurations of which components are based on Ethereum's infrastructure. Whether a rollup chooses to be Based, Native, or both will likely depend on its specific use case: High-Security Applications: Might choose Ultra Sound Rollups (Both Based + Native)


Performance-Focused Applications: Might use selectively Based OR Native components


Custom Applications: Might use traditional rollup architecture with specialized components High-Security Applications: Might choose Ultra Sound Rollups (Both Based + Native) High-Security Applications: Might choose Ultra Sound Rollups (Both Based + Native) High-Security Applications Performance-Focused Applications: Might use selectively Based OR Native components Performance-Focused Applications: Might use selectively Based OR Native components Performance-Focused Applications Custom Applications: Might use traditional rollup architecture with specialized components Custom Applications: Might use traditional rollup architecture with specialized components Custom Applications By understanding these architectural choices, users and developers can make more informed decisions about which L2 solutions best meet their needs for security, decentralization, cost, and performance. Hope you found this helpful.

Ethereum

Every

READ THIS: The Complete Guide to Based and Native Rollups

About Author

Comments

TOPICS

THIS ARTICLE WAS FEATURED IN

Related Stories

A Beginner's Guide to Reading and Writing Smart Contracts on Explorers

Art Basel Miami 2023: Sustainability, Impact, Web3 Innovations, and the Fusion of Art with Purpose

How to Setup a CI/CD Pipeline with GitHub Actions

How to set up NetSuite Token-based Authentication (TBA) in Laravel

Based Post-Capitalism: Layer 2 and 3 Chains as Foundations for New Economies

(1/100) Crypto Countdown: Golem

A Beginner's Guide to Reading and Writing Smart Contracts on Explorers

Art Basel Miami 2023: Sustainability, Impact, Web3 Innovations, and the Fusion of Art with Purpose

How to Setup a CI/CD Pipeline with GitHub Actions

How to set up NetSuite Token-based Authentication (TBA) in Laravel

Based Post-Capitalism: Layer 2 and 3 Chains as Foundations for New Economies

(1/100) Crypto Countdown: Golem

Light-Mode

Classic

Newspaper

Minty

Dark-Mode

Neon Noir

Minty

HN StartUps