Interpreting the Rollups Strategy: Why don't mainstream Layer 2 solutions decentralize the sequencer? What makes the introduction of Stack a solution?

Why do existing Layer 1 Rollups such as Arbitrum, Optimism, zkSync, and Starknet not open source and decentralize their important sequencer, but instead release their own network construction framework Stack? Cryptocurrency researcher Haotian points out that the reason is not technical but rather driven by interests.

Development Strategy of Layer2 Centralized Sequencer

Background: Rollup Sequencer

Most mainstream Layer2 solutions in the Ethereum ecosystem outsource the computational demands of smart contracts to external servers. These external servers, whether in terms of hardware or quantity, usually offer better performance. As a result, Layer2 networks can complete contract computations at a faster speed and then settle the results on Ethereum through fraud proofs or zero-knowledge proofs.

Among these servers, the Sequencer is responsible for receiving, sorting, calculating, and packaging transaction contents, and then uploading the necessary information to Ethereum. It plays a role similar to an Ethereum node.

Currently, mainstream Layer2 solutions include Arbitrum, Optimism, zkSync, and Starknet. Due to the need for rapid iteration and security considerations, these solutions are currently running with centralized sequencers. The plan is to open up and decentralize them once the technology matures.

Issues Caused by Centralized Sequencers

On Ethereum, when users submit transactions to the Mempool, they have to wait for miners to select and include their transactions in the blocks based on gas fees or their own rules. During this process, users' transactions may be affected by miner-extracted value (MEV) manipulation.

In theory, Layer2 sequencers receive transaction information and fairly sort and package transactions based on Nonce, timestamp, gas fee price, and other algorithms. This should make them more secure and cost-effective than Ethereum.

However, due to the centralization of existing sequencers, they have greater power. There is a lot of uncertainty regarding whether sequencers will engage in malicious behavior, insert transactions, or manipulate MEV, which creates a greater possibility of a "dark forest" compared to Ethereum.

Challenges of Decentralizing Sequencers

There are two main reasons why Layer2 projects currently have little incentive to decentralize sequencers:

• Security Concerns: Sequencers are a core component of Layer2. If a fully decentralized sequencer is adopted from the beginning, there would be a higher risk of potential failures, which would impact user experience and hinder early project development.
• Financial Interests: When a project grows to a certain scale, transaction volume and associated profits also increase. By controlling the sequencer, the project team can not only control gas fee pricing but also charge other hidden fees at will. Therefore, the team is less willing to promote decentralization and give up control.

In practice, many Layer2 projects have already attempted to decentralize sequencers. For example, Metis has implemented a decentralized sequencer network and uses token economics based on proof of stake (POS) to ensure the normal operation of malicious nodes, achieving a "hard decentralization" of sequencers.

Compromise Solution: Trust Assumption through Multiple Layer2 Ecosystem Strategy

However, Haotian believes that although the current mainstream Rollup solutions use centralized sequencers, they may still be trustworthy.

Arbitrum, Optimism, zkSync, and Starknet all choose to open up their own network construction frameworks, aiming to create a multi-network ecosystem and share critical technological components.

• Arbitrum introduces Arbitrum Orbit
• Optimism introduces OP Stack
• zkSync introduces ZK Stack
• Starknet introduces Starknet Stack

By sharing the core sequencer, a multi-chain combination framework is created. Then, through multisignature mechanisms, governance voting, and other means, the development of sequencers can be collectively governed, achieving a form of social consensus as a transition period toward true decentralization of sequencers.

By attracting other projects to join the ecosystem, such as OP Stack's ecosystem, which includes well-known projects like OP Mainnet, Base, opBNB, Zora, Mantle, Celo, and Debank, market trust in their sequencers can be strengthened, even though it is not truly decentralized.

Such soft-decentralized solutions require a certain level of market trust in the projects to be feasible. Therefore, only mainstream Layer2 projects adopt this approach.

Project Strategy from Decentralizing Sequencers

Both soft decentralization and hard decentralization are strategies to gain market trust through decentralization. The former is suitable for large projects that have already gained significant market trust and are reluctant to give up their advantages, while the latter is suitable for small projects that have not received much market attention and are catching up with mainstream technology.

By understanding the differences in these technical approaches, it becomes clear why Layer2 project teams are slow to promote the decentralization of sequencers and the underlying motivations behind the construction frameworks. This understanding helps make more accurate judgments and even predict trends in the crypto market and projects.