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Could ‘Based Rollups’ Solve Ethereum’s Layer-2 Problem?

Published

7 месяцев ago

12 февраля, 2025

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The Ethereum community has been in turmoil over the past few weeks, with members raising the alarm that the chain will lose its competitive edge if it doesn’t address some core design issues.

A key focus of the outrage has been layer-2 fragmentation. In recent years, Ethereum has embraced a layer-2 scaling roadmap—a plan that encouraged the development of third-party auxiliary networks called «layer-2 rollups»—to help scale the base Ethereum ecosystem. Offloading activity to these upstart networks has helped bring down fees and improve speeds for end-users, but it has led to a massive, deeply fragmented ecosystem of layer 2s.

While layer-2 networks all post data back down to Ethereum, they often struggle to communicate directly with one another, meaning passing assets and data between them can become expensive and cumbersome. There’s also the risk of centralized sequencers: reliance on company-controlled black boxes to pass transaction data between blockchain layers.

As layer-2 chains continue to proliferate, some Ethereum developers are pushing rollup tech that takes a new approach to security and interoperability: “based rollups.»

Based rollups

Based rollups differ from most existing rollups because they shift execution duties—such as processing transactions—back to Ethereum’s layer-1 rather than handling them on a separate layer-2 network.

When someone transacts on a layer-2 rollup, their transaction is processed through a component called a “sequencer.” The sequencer batches multiple transactions and submits them to Ethereum for settlement. In most rollups today, this sequencer is centralized, meaning a single entity (usually the company that built the rollup) controls the ordering and posting of transactions.

Centralized sequencers are currently a topic of debate in the Ethereum community. While sequencers provide efficiency and generate revenue for rollup operators by strategically ordering transactions, they also introduce a single point of failure. A malfunctioning or malicious sequencer can delay or manipulate transactions, raising concerns about censorship and reliability.

Based rollups avoid this vulnerability by using Ethereum’s built-in sequencing—its massive community of validators—rather than a single centralized sequencer.

The layer-2 roadmap evolution

In 2022, Ethereum co-founder Vitalik Buterin laid out his vision for a rollup-centric roadmap. The plan proposed using layer-2 rollups to side-step the base chain’s high fees and slow transaction speeds.

Different rollups employ different strategies for keeping down costs and boosting speeds, but they are all designed to uphold decentralization and security—meaning (in theory) the networks shouldn’t be centrally run, and the transactions they shepherd to Ethereum are free from tampering.

Rollups like Optimism, Arbitrum, Base, zkSync, and Blast have quickly grown to support larger transaction volumes than Ethereum itself. According to L2Beat, there are currently 140 live layer-2 networks, but the experience of operating between them—passing assets and other data between networks—has become clunky. As Ethereum becomes bigger and layer-2 networks become more integral to its functioning, improving communication between layer-2s—in other words, improving «composability»—has become more important than ever.

Because based rollups share the sequencer from the layer-1 chain (sometimes referred to as the layer-1 «proposer»), they can call on smart contracts on other based rollups within seconds, making it easier to access and exchange data across layer-2s.

“They effectively share a sequencer with each other and also with the layer-1 and that allows the sequencer now to coordinate messages passing between different based rollups, whereas normally message passing happens in an asynchronous fashion,” said Ben Fisch, the CEO of Espresso Systems, in an interview with CoinDesk.

Since based rollups all use Ethereum’s built-in sequencing, they can interact with one another instantly, in blockchain terms—all within the same Ethereum block.1

“You could have, in the span of one Ethereum block, a based rollup withdraw assets, do something in the layer-1, deposit the assets back, do something in the layer-2 and withdraw assets again,” Fisch told CoinDesk.

Some drawbacks

A few projects are looking to use based technology, but only one based rollup, Taiko, is currently live.

While rollups like Taiko present clear benefits, they will need to overcome some technical hurdles before they can be more widely adopted.

One major challenge is proof generation. When a based rollup submits transaction data to Ethereum, it must generate and publish proofs every 12 seconds—matching Ethereum’s block time. Currently, layer-2 rollups use two types of proof systems: zero-knowledge (ZK) proofs, which finalize in minutes, and optimistic proofs, which take up to seven days to suss out potential fraud.

For based rollups to function efficiently, proof generation speeds would need to align with Ethereum’s block time—a significant technical leap. However, Fisch says a breakthrough on this front could be «imminent. «

The other pitfall is Ethereum’s block producers, or «layer-1 proposers.» In based rollups, these proposers take over the role of sequencing transactions. But their primary motivation isn’t necessarily fairness—it’s profit

“Layer-1 proposers are not trusted entities that are working in the interest of the layer-2, they are economically motivated to make as much money as they can,” Fisch said. “So they may confirm some transactions for end users, and then see an MEV opportunity, which causes them to publish something totally different.”

MEV, or maximal extractable value, refers to the practice of reordering transactions to maximize profit, often at the expense of regular users. If proposers manipulate transactions, it could create instability in based rollups. To address this, developers are working on solutions like based pre-confirmations, which aim to add economic incentives for proposers to act in the interest of rollups.

So while based rollups may present a promising way to reduce fragmentation between layer-2s, they’re not a miracle fix. “My personal opinion is that based rollups are one part of the solution, they are not the only solution, and not all layer-2s necessarily should or will be based,” Fisch said.

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London Stock Exchange Unveils Blockchain-Based Platform for Private Funds

Published

2 часа ago

15 сентября, 2025

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The London Stock Exchange Group (LSEG) said it facilitated the first transaction on a new blockchain-based platform for private funds.

LSEG’s Digital Markets Infrastructure (DMI), built using Microsoft Azure, is designed to use blockchain technology across the full lifecycle of an asset, from issuance to settlement, with greater scale and efficiencies than existing systems, according to a Monday announcement.

Investment manager MembersCap and digital asset exchange Archax were onboarded as DMI’s first clients and conducted the first transaction, which raised money for MembersCap’s MCM Fund 1.

LSEG said it will ensure DMI works with current market services in blockchain technology as well as traditional finance (TradFi).

DMI and its first transaction are «significant milestones demonstrating the appetite for end-to-end, interoperable, regulated financial markets» blockchain technology, Dark Hajdukovic, LSEG’s head of digital markets infrastructure, said in the statement.

TradFi exchanges in numerous markets have been embedding blockchain technology into their platforms as a means of increasing efficiency and reducing costs. Last week, the Nasdaq filed a proposal with the U.S. Securities and Exchange Commission (SEC) to tokenize stocks on its exchange for trading on the blockchain with trades assigned the same priority as the legacy method.

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Bitcoin Cohorts Return to Net Selling as Market Continues to Consolidate

Published

2 часа ago

15 сентября, 2025

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Glassnode data shows that all wallet cohorts have returned to distribution mode, with a net selling of bitcoin, according to the Accumulation Trend Score breakdown by wallet cohort.

This metric disaggregates the Accumulation Trend Score to show the relative behavior of different groups of wallet. It measures the strength of accumulation for each balance size based on both the entities’ size and the volume of coins acquired over the past 15 days. (For more details on the methodology, see this Academy entry.)

A value closer to 1 signals accumulation by that cohort.
A value closer to 0 signals distribution.

Exchanges, miners and other similar entities are excluded from the calculation.

Currently, all cohorts, from wallets holding less than one bitcoin to those holding more than 10,000, are net sellers. This follows last week’s rally, when some whales — most notably the 10-100 BTC and 1,000-10,000 BTC cohorts were buying. They have since flipped back to selling.

Bitcoin was recently hovering near $117,000 after Asia’s trading session pushed it up from $115,000 dollars over the weekend. Over the past three months, Asia has consistently driven bitcoin roughly 10 percent higher, according to Velo data. In contrast, the European trading session has been marked by pullbacks, which has been seen on Monday so far. In addition, bitcoin is down more than 10% in the EU market over the past three months.

Overall, the market remains in consolidation, a trend likely to persist through September. On current data, the $107,000 marked at the start of September still appears to be the most probable bottom.

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Memecoins Under Pressure as SHIB, Dogecoin Slide After Shibarium Loses $2.4M in Hack

Published

3 часа ago

15 сентября, 2025

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Top meme tokens traded under pressure as a multimillion dollar hack of Shiba Inu’s layer-2 network, Shibarium, dented investor confidence in joke cryptocurrencies.

On Sunday, Shibarium fell victim to a flash loan attack on its validator system, which drained about $2.4 million in ether (ETH) and SHIB. The CoinDesk Memecoin Index has dropped 6.6% in the past 24 hours. The broader market CoinDesk 20 Index (CD20) is down just 2.3%.

The attacker borrowed 4.6 million BONE, the governance token for the Shiba Inu ecosystem, often linked to the decentralized exchange (DEX) ShibaSwap, through a flash loan to gain control of the majority of validator keys. The keys act as gatekeepers of the network, confirming transactions and ensuring security.

With that control, the attacker was able to game the system into approving unauthorized transactions and walk away with a large amount of crypto assets from the bridge that connects Shibarium with the Ethereum blockchain. The process is akin to someone temporarily taking over a bank’s security system to approve unauthorized withdrawals. A flash loan is a loan raised with no upfront collateral and returns the borrowed assets within the same blockchain transaction.

The Shiba inu team was able to prevent a bigger, more serious breach because the BONE tokens used to gain control were reportedly tied to validator 1 and remained locked by the staking rules.

Nevertheless, markets reacted negatively breach, which again underscores the perennial security issues with blockchain technology.

Memecoins drop, broader market bid

SHIB fell by the most in three weeks on Sunday (UTC), losing 4% $0.00001369, and has continued to weaken to trade recently at $0.00001359. The cryptocurrency experienced considerable volatility throughout the 23-hour trading window ended Sept. 15 at 02:00 UTC, with the aggregate range encompassing $0.000006191, a 4% oscillation from peak to trough.

The session commenced with pre-dawn fragility as SHIB retreated from $0.000014156 to establish a pivotal trough of $0.000013547 at 14:00 UTC. Volume of 1.064 trillion tokens surpassed the 24-hour mean, signaling robust distribution pressure and prospective capitulation, according to CoinDesk Research’s technical analysis model.

The BONE token, which initially doubled to over 36 cents, is now down over 2% on a 24-hour basis, trading at around 20 cents.

According to the technical analysis model:

SHIB established a critical underpinning at $0.000013547 during elevated volume selling pressure exceeding 1.064 trillion tokens.
The token constructed successive higher lows and consolidation parameters between $0.000013600-$0.000013780.
Recovery momentum is demonstrated by ascending channel formations with sustained higher lows, indicating potential continuation towards the $0.000014000 resistance.
Volume patterns exceeded 24-hour averages during the decline phase, confirming potential capitulation levels.
Terminal hour trading exhibited decisive upward momentum with 1% appreciation, confirming a breach above the resistance threshold.

Large DOGE transfers add to bearish sentiment

Meanwhile, SHIB’s peer dogecoin (DOGE) fell 4% to 27.80 cents on Sunday and has since lost further 5% to 27.36 cents, according CoinDesk data.

A massive transfer of DOGE to a centralized exchange likely added to the bearish mood in the market. According to Whale Alert, crypto exchange OKX received 119,306,143 DOGE, worth over $34 million, from an unknown wallet. Such large transfers are typically associated with an intention to liquidate holdings.