Espresso lands $28M to become marketplace for shared sequencing

The funding round was led by a16z crypto, and will be used by the team to continue product development and team scaling

article-image

Espresso Systems and Adobe Stock modified by Blockworks

share

Espresso Systems, a blockchain scaling and privacy infrastructure company most widely known for its shared sequencer solution, has secured $28 million in a Series B funding round led by a16z crypto.

This latest funding will be used to continue product development, broaden investments in the rollup ecosystem and scale the Espresso Systems team.

Sequencers on layer-2 scaling solutions create blocks by ordering and processing transactions in a mempool. These processed transactions are then sent to a virtual machine.

Today, most sequencers are run by rollups in their own execution environments, which can introduce trust assumptions and centralization concerns.

Read more: Offchain Labs’ Goldfeder talks Timeboost, transaction ordering and more

To combat this, Espresso Systems has introduced what it calls the shared sequencer network. This is a chain-agnostic, distributed consensus system that rollups can use to ensure that no one single authority can order transactions.

Ben Fisch, the CEO of Espresso Systems, told Blockworks that “shared sequencing enables rollup users to regain the experience of being on one Ethereum chain, while turning this into a decentralized marketplace for shared sequencing preserves the sovereignty and independence of individual rollups.”

Espresso’s specialized proof-of-stake system, HotShot, acts as a distributed consensus system that multiple different rollups can use. This means that the sequencer itself will no longer be bundled within its own software stack. 

Read more: First shared sequencer tech to go live on Polygon zkEVM testnet

“From an economic perspective, a sequencer that purchases the right to produce blocks for multiple rollups at the same time can generate surplus revenue, which comes from enabling interactions across rollups that wouldn’t exist otherwise, and that surplus value flows back to rollups participating in the marketplace,” Fisch said.

So far, Espresso’s technology has been integrated via the Gibraltar testnet with popular scaling solutions, including Optimism, Polygon zkEVM and most recently, Arbitrum. A fifth testnet is anticipated to be released in April.

Read more: Espresso Sequencer’s fourth testnet launch integrates with Arbitrum

“In April, we’ll be releasing our fifth testnet — Cappuccino. Cappuccino will be further decentralized, include various robustness enhancements and set the stage for the Espresso marketplace. The evolution from Espresso as a single decentralized shared sequencer to a marketplace for shared sequencing is critical to rollup sovereignty and value capture,” Fisch said.

In addition to the fifth testnet, the Espresso team is looking to incorporate new features and integrations into its infrastructure solutions.

“Apart from the HotShot finality gadget, we are also hard at work on the Espresso marketplace, which will enable rollups to sell sequencing timeslots to shared sequencers through a combinatorial auction,” Fisch said. “The marketplace will also give special participation rights to Ethereum layer-1 proposers so that based rollups can utilize Espresso as well. Preconfirmation software will also enable shared sequencers to make slashable commitments to satisfy more complex cross-chain user intents.”


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Tags

Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report HL cover.jpg

Research

It's increasingly apparent that orderbooks represent the most efficient model for perpetual trading, with the primary obstacle being that the most popular blockchains are ill-suited for hosting a fully onchain orderbook. Hyperliquid is a perpetual trading protocol built on its own L1 that aims to replicate the user experience of centralized exchanges while offering a fully onchain orderbook.

article-image

Bitcoin and ether lost around 3% and 5% over 24-hours, respectively, erasing Monday’s gains, after the first day of spot ETF trading in Hong Kong left much to be desired

article-image

There’s some truth to the EIGEN concerns popping up on Crypto Twitter

article-image

Despite ordinal volume dipping following the Bitcoin halving due to high network fees, the latest Motoko Sentinel collection saw an increase in its trading volume

article-image

The 43-page white paper explained the new token, with claims set to start on May 10

article-image

Not everyone with “cryptographer” in their title has the training or expertise to write cryptographic code that’s used by real people to protect real things

article-image

Custodia’s battle is the latest of several crypto-centric cases that may set the tone for how the industry interacts with regulators