How Are Optimistic Rollups Further Improved By Shared Sequencing?

• Sequencers play a significant role in optimistic rollups, the layer 2 scaling solution for Ethereum. 
• However, their centralized role has led people to research the concept of shared sequencing. 

The launch of Ethereum is considered by many, a major step in directing the flow of cryptocurrencies and the blockchain sector. It came up with the features of smart contracts and dApps, which became the base for decentralized finance (DeFi) and marched on to hold billions of dollars. 

However, as more users and developers, started joining the network, people soon realized the limitations of Ethereum. These were evident from the high transaction fees and slow processing time, which would irritate users and sometimes force them to move over to other networks. 

Realizing this, several enthusiasts started researching possible scaling solutions, and the most promising came in the form of Layer 2 solutions. Among them, Optimistic rollups were the most promising and attracted severe attention. They work by processing transactions off the main chain, bundling several of them (that’s why rollups), and processing them together. 

However, they still rely on the security of the mainchain to verify these transactions and finally execute them. These bundles are considered optimistic, i.e., all the transactions are assumed to be legitimate. A time window is also provided where people can challenge any transaction by solving a fraud-proof, and if accepted, the rollup is re-executed by removing the malicious transaction. 

In these rollups, a sequencer plays a pretty significant role. They are the ones responsible for collecting several transactions, creating a rollup for them, and finally submitting it to the main chain for validation. They also stand to resolve any fraud proofs, and their role can be considered similar to that of validators in a Proof of Stake (PoS) mechanism. 

Sequencers have high levels of control and authority over the rollup chain, which they can misuse to engage in unfair practices. They have control over ordering the transactions, their inclusion, and their execution order. They can willingly, refuse to accept any transaction in the rollup, forcing the user to visit the main chain and pay higher gas fees. 

They can perform front-running, by manipulating the order of transactions and extracting, what is called miner extractable value (MEV). Hence, a sequencer is semi-trusted by the users, to take up their transaction and include it in the roll-up. Although they can’t stop, surely they can delay users access to rollups and themselves earn profits. 

Shared Sequencing

In this concept, several rollups depend on a single sequencer to make the bundle and submit it to the main chain for verification. From the point of view of the sequencer, he can include a set of transactions in multiple rollups. The transactions are grouped and called atomic. The sequencer needs to include all the transactions within this atomic set in multiple rollups or include none. 

From the user’s point of view, the group that holds their transactions has only two fates either success or failure. It will no longer be unnecessarily delayed, bringing extra costs. Users can participate in cross-rollups, by grouping their transactions into multiple rollups, and at least some are executed.

Conclusion

Although the sequencer will practice atomic inclusion, atomic execution is not guaranteed because of the presence of some highly complex transactions common in DeFi. The trust issue still prevails, with users having to trust the sequencer, to be honest and not include malicious transactions, 

Although challenges exist, the concept is still under research and testing and, once done, may hold the potential to revolutionize how these rollups are executed.