Rollups: Is It All About Speed? Or Are We Forgetting Something?

Innovation in blockchain technology is largely driven by a singular goal: decentralization.

After all, if the broad decentralization of data wasn’t the primary goal of all of this work, everybody could just share a giant spreadsheet on a centralized database somewhere à la Web2. That would be much faster and easier than any sort of distributed ledger solution.

Herein lies the problem: People want to use distributed technology, but with the conveniences of a centralized service. User demands create an insatiable craving for more speed and efficiency.

The centralized elements that are implemented to achieve this level of performance are often quietly tucked away, like a skeleton in the closet, to be dealt with — hopefully — at a later date. 

The two goals of decentralization and speed seem to be diametrically opposed. You often can’t get one without sacrificing the other.

Layer-2 rollups are touted as a potential solution to this conflict, but the emphasis in development and demand — at least for now — seems to fall squarely on the side of faster transactions, sweeping the problem of centralization under the rug. It’s a sort of “we’ll cross that layer-2 bridge when we get to it” attitude.

DBA co-founder Jon Charbonneau and Flashbots Product Steward Robert Miller spoke to Blockworks about the problem of focusing on speed at the expense of decentralization on the Bell Curve podcast.

Charbonneau suggests that in the near future, “there’s going to be meaningful pressure to decentralize, whether that is on a technical/social level” or “on a regulatory level.”

“There are probably some [regulatory] questions when you’re the only person operating this thing,” he quips.

The simplest way to increase decentralization, Charbonneau says, is to “strap a consensus set on there.”

“You have some form of PBS — some form of auction between these validators who are on the rollups — and we know that’s a system that works reasonably well.” 

“So my guess is we start to see that across a lot of roll-ups over the next year, plus.”

Let’s do this at the speed of light

Miller presents the challenge of squaring tools for decentralization like “existing consensus sets, auctions like PBS, which generally take a little bit more latency” with the “desire for super-low block times on rollups.”

“As far as the latency,” Charbonneau replies, “I understand that some rollups care a lot more about that than I care about that.”

“Low latency, certainly well below Ethereum L1 block times — yeah — users want that. Does it have to be 300 milliseconds, 400 milliseconds? No, I don’t really think it does.”

“I think it’s fine if your blocks are a second or whatever,” he says. 

“I really don’t notice the difference, quite frankly, as a user. I don’t get the obsession with, ‘let’s do this literally at the speed of light.’”

Too close for comfort

Of course, certain MEV participants are obsessed with shaving milliseconds off transaction times to edge out competitors in pursuit of profit, which can lead to another problem.

Read more: MEV: Who Should Profit From a Protocol’s Economic Activity?

Miller points out one key issue in the latency game that derives from a simple fact: The closer participants are to each other, the quicker the network experience will be. “If you have an ordering protocol on your rollup that incentivizes latency gains,” he says, “the structure of the market you’re incentivizing is all actors to eventually co-locate in one place.”

“You may not get a rollup that has a single sequencer controlled by a single party,” he says, “but you may get a rollup that is controlled by a single data center in a single jurisdiction somewhere subject to a single set of laws, which is a huge surface area for regulation risk.”

“It’s only one step worse than having a single sequencer — having your entire chain co-locating in a single Amazon or similar data center somewhere else within the world.”

“What we really want,” Miller continues, is “to have these systems geographically distributed across the world in many different places, such that no single sequencer is able to impose its utility function on the network and arbitrarily censor a set of transactions.”

“I don’t know what is the best, but I do worry that this desire that users have for super-fast block times,” he says, “would lead to geographically centralized chains, which would lead to censorship over time.” 

“And that’s sort of what I’m seeing in the future.”

Get the day’s top crypto news and insights delivered to your email every evening. Subscribe to Blockworks’ free newsletter now.

Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from Blockworks Research’s Daily Debrief.

Can’t wait? Get our news the fastest way possible. Join us on Telegram and follow us on Google News.