<p>Based rollups, also known as L1 Sequenced rollups, have emerged as a promising solution to enhance scalability and efficiency. This article delves into the fundamentals of Based rollups and their implications for the Ethereum ecosystem.</p><h2>Understanding Based: &nbsp;The Future of Rollups</h2><p>Based rollups represent a subset of rollup solutions that leverage the underlying Layer 1 (L1) protocol for sequencing transactions. Unlike traditional rollups that employ their own sequencers, Based rollups rely on Ethereum's sequencing mechanism for transaction ordering. The idea of the based rollup was first introduced as “<strong>Total Anarchy</strong>” by Vitalik in his <a href="https://vitalik.eth.limo/general/2021/01/05/rollup.html">article</a>, meaning <i>anyone can submit a batch at any time.</i> The definition of ‘Based’ was defined by Justin Drake, who proposed the concept in an <a href="https://ethresear.ch/t/based-rollups-superpowers-from-l1-sequencing/15016">EthResearch post</a>.</p><p>&nbsp;</p><p>&nbsp;</p><p>The sequencing process in Based rollups involves multiple actors, including Searchers, Builders, and Proposers. L2 searchers create L2 bundles from users' transactions, which are then sequenced and bundled into full L2 blocks by L1 searchers. These full L2 blocks are included in L1 bundles and submitted to L1 block builders, following a similar process to the Ethereum network.</p><p>&nbsp;</p><figure class="image image_resized" style="width:50%;"><img src="https://strapi.buildbear.io/uploads/Untitled_9_34d2d6b463.png" alt="Untitled (9).png" srcset="https://strapi.buildbear.io/uploads/thumbnail_Untitled_9_34d2d6b463.png 245w,https://strapi.buildbear.io/uploads/small_Untitled_9_34d2d6b463.png 500w," sizes="100vw"><figcaption>Image Source: <a href="https://modular.4pillars.io/">FourPillars</a></figcaption></figure><p>&nbsp;</p><h2>Key Features</h2><p>Here are some key features of based rollup. Current Optimistic rollups like Arbitrum can also use L1 validators for block inclusion, similar to general based rollups.</p><p>&nbsp;</p><ol style="list-style-type:upper-roman;"><li><strong>L1 Sequencing</strong>: The sequencing of rollup blocks is determined by the L1 like Ethereum, allowing the next L1 proposer to collaborate with L1 searchers and builders, and include the next rollup block as part of the next L1 block. This ensures the rollup efficiency from the security and decentralization of the L1 network.</li><li><strong>Decentralization</strong>: Utilize the decentralized infrastructure of the L1 network (like Ethereum) for searchers, builders, and proposers. This simplifies the rollup design and makes it more secure and reliable.</li><li><strong>MEV Handling</strong>: They manage Maximal Extractable Value (MEV) through L1 sequencing, reducing the risk of MEV exploitation and maintaining better liveness compared to other rollups with escape hatches.</li><li><strong>Impact on L1 Stakers</strong>: Based rollups usually have little effect on L1 stakers but can increase their earnings from MEV. If a based rollup uses re-staking for fast finality, L1 stakers can earn even more by participating.</li><li><strong>Liveness</strong>: Offers the same liveness guarantees as the Ethereum network, providing 100% liveness. This is an advantage over non-based rollups, which can experience downtime due to escape hatches and sequencer censorship.</li></ol><p>&nbsp;</p><h2>Architecture</h2><p>Based rollups integrate with the L1 blockchain for security, reducing centralization risks. They use fraud proofs to verify transactions, ensuring network integrity and finality. Projects like Taiko use Based rollups to build scalable and secure applications on Ethereum. By combining L1 and L2 strengths, Based rollups offer improved performance, cost-effectiveness, and security. The four layers of based include:</p><p>&nbsp;</p><figure class="image image_resized" style="width:75%;"><img src="https://strapi.buildbear.io/uploads/ddgg_b14be22b76.png" alt="ddgg.png" srcset="https://strapi.buildbear.io/uploads/thumbnail_ddgg_b14be22b76.png 245w,https://strapi.buildbear.io/uploads/small_ddgg_b14be22b76.png 500w,https://strapi.buildbear.io/uploads/medium_ddgg_b14be22b76.png 750w,https://strapi.buildbear.io/uploads/large_ddgg_b14be22b76.png 1000w," sizes="100vw"></figure><p>&nbsp;</p><p>Ethereum acts as the settlement layer, for posting proofs, providing finality on the chain, and ensuring access to the verified L2 chain state. DA layer ensures that all participants in the network can access the necessary data to reconstruct the state of the rollup. Ethereum can serve as the data availability layer, but based rollups have the flexibility to use off-chain data availability solutions like Celestia or NEAR DA. The &nbsp;Consensus layer on Based relies on Layer1 for consensus and utilizes the L1 validator base to determine transaction order, eliminating the need for a separate consensus mechanism. On the Execution layer transactions are executed off-chain, with the rollup state constructed using the published transaction data, serving as its own Execution Layer.</p><p>&nbsp;</p><h1>Differentiating Based Rollups</h1><p>Compared to other rollup solutions like optimistic and ZK rollups, Based rollups offer several distinct advantages and challenges.</p><h2>Benefits of Based Rollups</h2><ul><li><strong>100% Liveness</strong>: Based rollups ensure continuous operation and responsiveness.</li><li><strong>Simplicity</strong>: They feature a simpler design, reducing technical complexity.</li><li><strong>Reduced Latency</strong>: Transaction processing times are minimized, enhancing user experience.</li><li><strong>Lower Operation Costs</strong>: Operating Based rollups is cost-effective compared to other solutions.</li><li><strong>Interoperability</strong>: They maintain interoperability with Ethereum and other rollup solutions.</li></ul><h2>Challenges with Based Rollups</h2><ul><li><strong>MEV Income Loss</strong>: Due to Ethereum's sequencing, MEV profits flow to L1, impacting L2 incentives.</li><li><strong>Sequencing Flexibility</strong>: Limited flexibility in transaction sequencing strategies.</li><li><strong>Scalability Limitations</strong>: Scalability can be constrained as sequencing and data availability rely on Ethereum.</li></ul><h1>Conclusion</h1><p>Based rollups inherit the decentralization and liveness of Ethereum while optimizing L2 performance by offloading transaction sequencing to L1. They achieve decentralization by allowing anyone to participate in the sequencing process, without native tokens. Despite challenges like MEV income loss and scalability limitations, Based rollups offer a compelling solution for scaling blockchain applications.</p><p>As developers explore innovative solutions to enhance blockchain scalability, Based rollups emerge as a promising avenue. Their integration with Ethereum's infrastructure provides a seamless transition for developers, balancing simplicity, efficiency, and interoperability.</p><h1 style="margin-left:0px;">About BuildBear</h1><p style="margin-left:0px;"><a href="https://www.buildbear.io/">BuildBear</a>&nbsp;is a platform tailored for DApp development and testing. Developers gain the freedom to construct a personalized Private Testnet sandbox across a variety of blockchain networks. The liberty to mint unlimited Native and ERC20 tokens, coupled with rapid transaction times on BuildBear (under 3 seconds!), enhances the DApp development lifecycle manifold. The platform comes equipped with tools and plugins designed for real-time testing and debugging, ensuring developers can keep tabs on intricate blockchain transactions with unparalleled ease.</p><p style="margin-left:0px;"><strong>Connect with us on</strong>&nbsp;<a href="https://twitter.com/_BuildBear">Twitter</a>&nbsp;|&nbsp;<a href="https://www.linkedin.com/company/build-bear/">LinkedIn</a>&nbsp;|&nbsp;<a href="https://t.me/Web3_dApp_Developers">Telegram</a>&nbsp;|&nbsp;<a href="https://github.com/BuildBearLabs">GitHub</a></p><p>&nbsp;</p>

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Based rollups, also known as L1 Sequenced rollups, have emerged as a promising solution to enhance scalability and efficiency. This article delves into the fundamentals of Based rollups and their implications for the Ethereum ecosystem.

A Comprehensive Overview on Based Rollups on Ethereum

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