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Native Rollups: Ethereum’s Answer to the Scalability Challenge

by Drop Gorn
November 23, 2024
in Crypto
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Native Rollups: Ethereum’s Answer to the Scalability Challenge
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  • Gnosis founder Martin Köppelmann says Ethereum needs to distance itself from centralized layer 2s like Base and adopt native rollups
  • Native rollups are layer-2 networks built to Ethereum’s native security standards, offering security, composability, and economic alignment with Ethereum’s ethos
  • Implementing 128 native rollups could solve liquidity fragmentation and return Ethereum to its original sharding vision, according to Köppelmann

Ethereum is at a crossroads. While layer 2 rollups offer a path to scalability, some rollups like Base are more centralized and threaten Ethereum’s core values. Gnosis founder Martin Köppelmann argues Ethereum should instead embrace native rollups – decentralized layer 2s built to Ethereum’s standards. But not all developers agree native rollups are the definitive solution. This article explores the debate around native rollups and their potential to get Ethereum back on track.

What are Native Rollups?

Native rollups are layer 2 networks that adhere to Ethereum’s security model. This means they are uncensorable, composable with Ethereum, and keep extracted value on the mainnet. Native rollups would be governed by Ethereum developers, have synchronous reading to layer 1, and use Ethereum for data availability.

According to Köppelmann, native rollups could solve liquidity fragmentation on Ethereum by implementing sharding through layer 2 technology. They provide the security of Ethereum while improving scalability through rollups.

The Downsides of Centralized Rollups

Many current rollups like Base are centralized – they rely on a centralized sequencer controlled by a single company like Coinbase. Köppelmann argues these rollups have misaligned incentives. They can determine transaction fees and capture value that would otherwise accrue to Ethereum.

Centralized sequencers also raise censorship risks. They can block transactions and manipulate protocols built on the rollup. Ethereum founder Vitalik Buterin has argued centralized sequencers undermine the core values of blockchain networks.

Do Native Rollups Offer a Solution?

Köppelmann wants Ethereum to deploy 128 native rollups to form a fully decentralized layer 2 ecosystem aligned with Ethereum’s ethos. This web of rollups would bring back the original sharding vision and avoid fragmentation across many proprietary networks.

However, some developers question whether the distinction between native and centralized rollups is meaningful. Rollups with centralized sequencers can still post data back to Ethereum. The terminology may be more marketing than a technical difference.

Others note native rollups have downsides too. They are slower and less optimized for user experience compared to centralized networks. Plasma constructions that minimize on-chain data may be better scaling solutions.

The Road Ahead

While views differ on the best path forward, there is agreement on the need to move away from fragmented proprietary rollups. Ethereum’s priority should be maximizing composability between applications while retaining censorship resistance and decentralization. Native rollups are one option to consider as Ethereum seeks to scale without compromising its core values.

Conclusion

Ethereum stands at a turning point as rollups reshape layer 2. While scaling is crucial, decentralized principles and composability shouldn’t be sacrificed. As Ethereum charts its future course, robust debate over solutions like native rollups will help guide the network to make informed choices. By upholding its defining values, Ethereum can continue pushing the frontiers of Web3 innovation.

Tags: BaseCoinbaseethereumGnosisMartin Köppelmann
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