Equilibrium Infra Bulletin #26: Sequencing Marketplace Designs, Verifiable FHE, Empirical Analysis of EIP-4844 and more...
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🔍 Espresso’s Design For Sequencing Marketplace
⚡️ Topic Summary
Almost all rollups today run their own (isolated) sequencers and most are centralized. Shared sequencing is the idea of one sequencer acting as the proposer for multiple rollups for a given slot, enabling atomic composability for cross-rollup transactions. Espresso is building a marketplace that gives rollups the option (but not the obligation) to sell their sequencing rights for a specific slot to external sequencers. This design also aims to improve censorship resistance by having a decentralized set of sequencers bid on each slot and there are guardrails to prevent the same sequencer from winning each round, such as using a combinatorial lottery (rather than a combinatorial auction).
A shared sequencer that obtains sequencing rights for multiple rollups can create additional value by facilitating atomic cross-rollup transactions. This additional value trickles down to participating rollups and is higher or equal to the value of each rollup sequencing in isolation. Another primary goal of the marketplace is to ensure that participating rollups maintain sovereignty, which is achieved through the opt-in nature of the marketplace and each rollup setting a reserve price - the minimum price at which they are willing to sell their sequencing rights to a specific slot.
Besides the marketplace, Espresso also aims to offer a Hotshot finality gadget to rollups that provide pre-confirmations or “soft finality” for users much faster than the Ethereum finality (~15 mins). It’s implemented as an EigenLayer restaking contract and in theory, could achieve the security of Ethereum finality if all L1 validators opted in (although this is very unlikely). Nodes participating in HotShot consensus also contribute to Tiramisu, Espresso's data availability layer.
🤔 Our Thoughts
Marketplaces can be powerful in matching the desires of buyers & sellers, and the concept already exists or is being developed across several areas of blockchain networks. An existing example is the marketplace around block-building, and an emergent one is the general-purpose (ZK) proof markets that teams like Gevulot are working on. EigenLayer can also be described as a marketplace for decentralized trust, where infra and middleware builders are buying security from Ethereum stakers who opt-in to more slashing conditions through restaking.
The downside of a market approach is that the process of matching buyers and sellers can become complex - especially as the number of possible solutions grows. In Espresso’s case, the number of participating rollups does increase the theoretical range of possible solutions (bundles of rollups for sequencers to bid on), but in practice, the set of solutions to solve over would be much lower. An optimal outcome from the shared sequencer’s POV would be to bid on a bundle of all participating rollups as they can create additional value from settling cross-rollup transactions. However, some limitations include implementation issues (shared sequencer is not properly set up to sequence all kinds of rollups) and a too high reserve price (set by the rollups) making it economically infeasible to bid on.
Matching is done to maximize the total value to rollups (source) While this proposed design contains a lot of details, Espresso aims to release a simple version of the marketplace (planned for Q2 2024). The additional nuances are in place to reduce the risk of anti-monopolization, add stability, and increase the efficiency of the marketplace, but they also add complexity. It will be interesting to see how many of these make it into the final production-ready implementation.
💡 Research, Articles & Other Things of Interest
📚 Verifiable FHE Bootstrapping using SNARKs - Zama has managed to prove FHE bootstrapping for the first time - the most expensive step in an FHE operation. This is a major step in showing that verifiable FHE is possible (even if it’s still impractical).
📚 Modular vs. Monolithic Is Dead - Avi from Nil dives into whether horizontal or vertical scaling is better for Ethereum scalability.
📚 Empirical Analysis of the Impact of EIP-4844 on Ethereum's Ecosystem - Some effects from EIP-4844 include a significant increase in the total data size posted by rollups as well as a substantial reduction in total fees paid by rollups and the price per MiB for data availability.
📚 Multidimensional gas pricing - Vitalik’s newest article covers whether more granular resource pricing on Ethereum would make sense.
🔥 News From Our Partners
📢 Arcium (formerly Elusiv) unveils their new product - a (parallelized) general-purpose confidential computing network that leverages a combination of modern cryptography solutions. Equilibrium Group invested in the Elusiv seed round and our in-house MPC expert Michael has been advising them with the MPC implementation.
🤌 Personal Recommendations From Our Team
📚 Reading: Lives and Opinions of Eminent Philosophers - Diogenes Laertius: a collection of biographical sketches and philosophical doctrines of more than 70 prominent philosophers of ancient Greece, including Socrates, Plato, Aristotle, Epicurus, and many others.
🎧 Listening: Haken - Affinity: The album is hard to categorize as it contains a mix of genres, but it quickly led to a discussion internally around the complexity of music, whether novelty is good, and some bands that lost their touch through complacency.
💡 Other: Hackers discover how to reprogram NES Tetris from within the game, which could help high-score chasers avoid game-ending crashes.