Shared Sequencers: The Quest for Decentralization Continues
No one has fully decentralized their sequencers yet
eamesBot/Shutterstock modified by Blockworks
Rollups are relatively new tools in the quest to scale Ethereum’s ecosystem that seem to be garnering attention in blockchain developer circles lately. In the quest to reduce fragility and centralization, key tools in the ecosystem — called sequencers — stand out as a particular point of vulnerability.
The innovation of blockchain rollups offers speed and efficiency by taking over certain tasks and lightening the burden on layer-1 networks, but current technical priorities and limitations tend to leave decentralization further down the priority list.
Host Dan Smith explains, “If we look at the reality of rollups today, we find that they’re mostly siloed and centralized.”
A sequencer performs the specialized task of processing and ordering transactions in blocks for them to be added to a particular chain. Every rollup essentially runs its own proprietary sequencing solution, for now. Bowen explains the purpose of a “shared sequencer” network:
“You can have this decentralized block production at the sequencing layer of a rollup, but it can be utilized by one or more rollups rather than each rollup having its own kind of decentralization process.”
Fisch comments, “if we just focus on the rollups that exist today, no one has fully decentralized their sequencers and no rollups are interoperable with each other.”
“When it comes to ordering data and making it available, Ethereum is inefficient and expensive,” he says, “and so naturally, every project that was building a rollup found it more convenient and cheaper to run its own centralized sequencer.”
Bowen says, “There should be more rollups than there are now. Now we have like a handful, you know, five to ten.”
“If we want to have more,” he says, “we don’t want to continually have this phased approach” where every developer builds their own centralized sequencer. “We view this as fundamentally unscalable.”
By making a shared sequencer mechanism available to developers at a rollup’s inception, developers can build the tool in a decentralized state from the get-go, he suggests.
“We think about modularity as this kind of economic specialization,” Bowen says. Rollup developers have to focus on such a broad variety of tasks — decentralization is simply not very high on the list of priorities. “We can provide that as a service to you because it’s not your focus — but it could be our focus.”
Fisch advocates a “heterogeneous system,” where “there is a strong network effect of having all rollups share a common sequence.”
“The value,” Fisch says, “is in everyone sharing a common protocol that’s doing the right thing to enable what they need. And that is the benefit of shared sequencing.”
“We’re trying to get a lot of rollups to share this common infrastructure.”
Of course, economic incentives have to be considered, Fisch points out. “Will rollups running on a shared sequencer be able to see as much value accrual as they would have on their own?”
That’s a problem, he says, that “needs to be addressed through economic mechanism designs and allocation of value that’s being generated by the sequencer.”
“As long as each rollup has the governance to be able to decide whether or not to continue using the sequencer,” he says, “then it has leverage in deciding whether to opt-in to a fair protocol or not.”
Minimize the monopoly
“We want to minimize monopolistic actors within the system,” Bowen says.
“If you wanted to be a Google, how did you make money? Well, you made a network of facts and then you became the centralized point of ingress for the internet, essentially. That’s a very valuable monopolistic position to hold.”
“If the shared sequencer network is extracting rent for you,” Bowen asks, “if you don’t think you’re getting your value, it should be relatively easy for you to leave, right?”
“Fundamentally, we don’t want to be ‘capturing,’” he says. “We’re trying to move from this Web2 world where you say, ‘I’m going to establish a thing. I am going to honeypot users, and then I’m going to extract rent.’”
“The relatively standard phased approach — we don’t want that.”
“I would rather buy that as an off-the-shelf service.” Bowen says.
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