Introduction

Uniswap has announced the launch of “Unichain,” now live on mainnet, Uniswap Labs’ own Layer 2 blockchain. This announcement follows a series of significant developments in the L2 space—such as Kraken’s “Ink” and Sony’s “Soneium”—which underscore the growing importance of L2 blockchains in scaling distributed ecosystems.

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At Blockdaemon, we are proud to be at the forefront of providing institutional-grade blockchain infrastructure, including cutting-edge L2 technologies and sequencing solutions. Our approach is designed to support early-stage L2 networks while facilitating the transition from centralized to shared sequencing models. This ensures that diverse L2 projects can achieve high performance without compromising ethical responsibility or compliance.

Below is an overview of our approach to sequencing, L2 partnerships, and how we address the potential conflicts between performance and compliance.

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Sequencing Models: Early-Stage, Shared, and Decentralized

Early-Stage L2 Sequencers

Early-stage L2 networks often rely on a centralized approach for rapid block production under a single entity's control. Blockdaemon’s experience running Optimism (OP) nodes—including R&D full-stack initiatives with OP sequencers, verifiers, and experimentation with the Cannon Fault Proof Virtual Machine—has given us valuable insights into the capabilities required for supporting these networks as they evolve.

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Our partnership with Coinbase to run nodes for Basechain highlights our capability in providing highly performant and reliable infrastructure. Through these partnerships, Blockdaemon delivers institutional-grade reliability, security, and scalability to L2 protocols.

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Shared Sequencers

Shared sequencing involves multiple operators managing sequencing duties for several L2 networks, thereby improving network resilience and efficiency. Blockdaemon has partnered with Espresso Systems as one of 20 operators testing their shared sequencer technology—a move towards collaborative innovation and scalability.

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We have plans to expand into additional L2 testnets, including being an operator of Aztec’s sequencer. This is important particularly as the growth of enterprise L2s presents opportunities to showcase our trusted, scalable infrastructure for decentralized and shared sequencer models.

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At Blockdameon, we collaborate to drive cutting-edge research in the Layer 2 and sequencer spaces. For example, our Innovation Team’s R&D members partner with entities like the Proposer-Builder Separation Foundation to research optimizing Proposer-Builder Separation in L2s and to consider what effects this might have on centralization, censorship, and adoption of different approaches to sequencers. This includes examining how shared sequencers can lead to distributed block building or partial block auctions, which aim to decentralize the node setup.

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Distinguishing Between Optimistic and Zero-Knowledge L2s

Layer 2 networks generally fall into two categories: Optimistic Rollups and Zero-Knowledge (ZK) Rollups.

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• Optimistic Rollups: These L2s assume transactions are valid by default and require fraud proofs only if a challenge arises. This approach is often used in early-stage L2s as it is easier to implement and requires less computational complexity. Examples include Optimism and Arbitrum.
• Zero-Knowledge Rollups: ZK Rollups generate cryptographic proofs (validity proofs) for every state transition, ensuring immediate verification. These rollups offer enhanced security and scalability, making them suitable for projects seeking greater decentralization. Examples include zkSync and Starknet.

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Blockdaemon's expertise allows us to support both types of L2 networks, providing tailored sequencing solutions that cater to the specific requirements of Optimistic and ZK Rollups as they transition from centralized to decentralized models.

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Based Sequencers and Pre-Confirmations

Looking to the future, based sequencers represent an innovative approach that integrates decentralization with enhanced transaction feedback mechanisms. Based sequencers involve using decentralized Layer 1 validators as the sequencer model for Layer 2 chains, maintaining L1 security guarantees while offering fast pre-confirmations and new methods of cross-chain composability to users. This combination aims to provide the benefits of a decentralized infrastructure with an optimized user experience.

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By exploring based sequencing technologies, we aspire to support seamless pre-confirmations that uphold security standards while enhancing overall L2 performance. As more enterprise and TradFi players enter the L2 space, the based rollup technology stack will require seasoned infrastructure providers such as Blockdaemon to lead and strike a balance between performance, compliance, and user experience.

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Confidential Computing: TEEs and Beyond

Confidential computing and Trusted Execution Environments (TEEs) such as Intel SGX are emerging as essential components for L2 scalability and security, especially for applications like multi-proving systems, ZK-coprocessors, and secure block building. TEEs, for example, provide verifiable execution environments that help mitigate the risk of centralized control and foster greater trust among participants by ensuring that critical computations are executed securely and cannot be tampered with. Blockdaemon’s expertise in confidential computing spans Intel Nitro and SGX, and allows us to deliver secure infrastructure that meets institutional standards for compliance and data privacy, capable of supporting technologies like Flashbot’s SAUVE and Rollup-Boost, addressing innovative and critical issues like Maximal Extractable Value (MEV).

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Navigating Conflicts: Performance vs. Ethical Sequencing

Balancing performance with ethical responsibility while scaling blockchain capabilities is a key challenge in the L2 ecosystem. On one hand, high-performance sequencing often requires centralized control, which can compromise transparency and raise issues around fairness. On the other hand, decentralized approaches that promote fairness may introduce latency and lower efficiency.

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Through our engineering experience and expertise, Blockdaemon is able to address this tension by:

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• Shared Sequencing Models: Collaborating with emergent L2 protocols to implement shared sequencers that optimize both scalability and resilience.
• Privacy and Transparency: Utilizing TEEs for multi-proving systems, ensuring that block building follows transparent policies while mitigating against toxic MEV and without compromising performance.
• Pre-Confirmations: Exploring technologies to offer transaction feedback without sacrificing compliance.

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Conclusion

Blockdaemon's institutional-grade sequencing strategy is built on the pillars of high performance, ethical practices, and compliance. By combining early-stage, shared, and based sequencing models with cutting-edge technologies like TEEs and pre-confirmations, we can provide the reliability and transparency needed for the evolving L2 landscape.

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