TL;DR
- Leaders of Ethereum layer 2 networks are embracing based and native rollups to enhance the network’s security and decentralization.
- The transition may reduce revenue for layer 2 projects but benefit Ethereum’s base layer.
- Projects like Base and Taiko are adopting standards like FABRIC to address interoperability challenges.
In a bid to unify and strengthen Ethereum’s security, leaders of major layer 2 (L2) solutions like Base, Optimism, and Arbitrum are backing the implementation of “based” and “native” rollups. This technological shift aims to move block-building processes from centralized sequencers to Ethereum validators, enhancing decentralization, reducing fragmentation, and fostering greater network cohesion while addressing scalability challenges in a rapidly evolving and increasingly competitive blockchain landscape.
Jesse Pollak, the head of Base, expressed his commitment to this transition during a recent meeting with Ethereum developers, stating that based rollups are a “powerful and flexible tool” that will strengthen Ethereum’s base layer connection. Similarly, Ben Jones, director of the Optimism Foundation, emphasized the importance of this collaboration, calling it a pivotal moment for the ecosystem:
“It’s wartime.”
Proposed in March 2023 by Ethereum developer Justin Drake, based rollups transfer the transaction sequencing process to all Ethereum validators, boosting decentralization. However, this change comes with a trade-off: transaction confirmations would take 12 seconds instead of the near-instant one-second confirmations currently offered by many layer 2 solutions.
An Economic Sacrifice for Ethereum’s Future
This shift does not come without financial costs. According to Dune Analytics, Arbitrum and Base have generated $210 million and $96.2 million, respectively, through their centralized sequencers. These revenues are likely to decline significantly under the new model. Despite this, the migration could redirect earnings to Ethereum’s base layer and potentially boost ETH’s price, which is currently hovering around $3,065 per token.
In addition, native rollups—a complementary innovation—aim to optimize transaction execution at the base layer, improving the ecosystem’s composability, scalability, and interoperability. Taiko, one of the first projects to adopt these approaches, has been at the forefront of this evolution. Taiko CEO Daniel Wang highlighted that adopting standards like FABRIC will enable a comprehensive solution to Ethereum’s fragmentation issues.
The move toward based and native rollups represents an ambitious bet on Ethereum’s future. While it demands short-term sacrifices from layer 2 solutions, it promises a stronger, more decentralized network capable of handling increased demand, ensuring security, and supporting the global blockchain industry’s long-term growth potential.
