Ethereum Gas Fees Have Decreased, What Core Problem is L2 Solving?

Original Author: 0xTodd, Partner at Nothing Research

Looking at the current situation, after gas fees on the Ethereum L1 mainnet dropped to a 5-year low, many projects once again feel that deploying on L1 may not be so bad after all. So, many people may ask, what core problem is L2 solving now?

There is an ancient topic called the blockchain trilemma, and as explained by Vitalik, it means you can only choose two out of three among [Security], [Decentralization], and [Scalability]. Returning to the technical essence, this is the problem that L2 should solve:

First, the state root is placed on L1, maintained by the mainnet for [Security];

Second, effort is made on the sequencer to maintain [Decentralization] as much as possible;

Finally, [Scalability] is cleverly achieved by L2 off-chain.

Different L2 solutions each have their own merits. OP-style Rollup and ZK-style Rollup are well known. Today, let's discuss something different, like Based-Rollup. The Based L2 solution was also proposed early by Vitalik, and L2s like Taiko have been promoting the Based Rollup approach. PS: Note that it is Based, which has nothing to do with Coinbase's Base, and Base is also OP-style.

It is well known that in a standard OP-style L2 system, the sequencer has a lot of power. It can decide whose transactions come first, whose come later, and can even profit from MEV even without malicious intent. This is why projects like Metis have proposed decentralized sequencers.

Different L2 solutions also have different approaches to MEV. For example, Arb advocates for fair treatment of MEV (strictly first come, first served), while OP is more encouraging, seeing MEV as a free market activity, and therefore taxes MEV. However, in any case, L2 sequencers hold a prominent position.

Therefore, Based-Rollup chooses to challenge the sequencer — its concept is to have ETH L1 directly handle sequencing, thus limiting the power of L2 sequencers. Referring to a diagram from @taikoxyz's documentation:

You can see, it's a three-step process:

Step one, the L2 Searcher bundles the L2 transactions and sends them to the L2 Block Builder;

Step two, the L2 Block Builder constructs the block;

Step three, the L1 Searcher includes the L2 block in the block they are building on L1.

And the L1 Searcher and L2 Builder here can be the same person. This is another clever idea of "wearing two hats." In fact, the device performance of the L1 Searcher is redundant, so doing a little extra work to build a Taiko L2 block is no pressure at all.

To use an inappropriate analogy, if we compare ETH and L2 as the relationship between a province and a city, then the idea of Based Rollup is: let the mayor (L2 Builder) concurrently serve as the vice governor (L1 Searcher), thus leveraging L1's resources to secure L2.

From Taiko's TGE to now, it has been exactly a year, and Token Unlock is about to begin. Therefore, over the past year, Taiko has also developed a new concept called Based Booster Rollup/BBR.

Booster Rollup can also serve as a mirror image of L1, which is also a very interesting concept. However, due to space constraints, the analysis of Booster Rollup will be elaborated on in the next article.

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