Originally written by Messari - Stephanie Dunbar
Original compilation: BlockTurbo
Rollups have long been an important initiative in scaling Ethereum. By executing transactions on a separate chain and posting compressed batches of results back to Ethereum, transaction throughput is significantly cheaper and more performant than L1.
Common rollups, such as Optimism Mainnet and Arbitrum One, enable smart contract applications to be deployed on L2 permissionlessly. However, simply returning to Layer 1 is not a panacea solution for scaling. Generic L2 ends up facing:
Congestion intensifies as applications compete for rollup space
There is a risk of liquidity breakage and cross-chain bridging between rollups that do not share public infrastructure
Increased overhead for developers deploying applications across multiple chains
Effort wasted developing a constantly updated L2 instead of contributing to a free and open infrastructure
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Rollup Ecosystem Centered on Ethereum
To address these challenges, a growing narrative in Ethereum scaling revolves around a composable Rollup ecosystem with shared infrastructure. The Ethereum-centric Rollup ecosystem will benefit from a customizable execution environment, simplified cross-chain communication, and a path to profitability for application and ecosystem developers.
At least four Ethereum scaling projects have taken this approach so far, each with its own culture, value accrual mechanism, and technical design.
While most projects have yet to publish their full implementation details, most of them, including Arbitrum, zkSync, and Starknet, intend to extract value by using their general-purpose L2 as a settlement layer on which L3 can be deployed. Others such as Polygon may enforce MATIC token staking to use the shared infrastructure of individual instances of their zkEVM.
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Hyperlink Guide
Superchain Superchain is a collection of Ethereum-aligned chains built using the OP Stack, the software that underpins the Optimism ecosystem. This includes the general Optimism Mainnet L2 and any chain that uses open source code to build a customizable modular chain. Chains built using the OP Stack and managed by the Optimism Collective are called OP Chains. They can be application-specific, generic, or whatever their community wants.
At a high level, Superchain will have the following characteristics:
Bridge on L1 (chain factory) to start and manage OP chains
Collective governance through Optimism Collective
A marketplace for shared ordering protocols that will provide atomic cross-chain composability for opt-in OP chains
Messaging layer for OP chains that do not share a sequencer set
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Chain Factory and Governance
Every OP Chain will be connected to Chain Factory, a bridge smart contract on Ethereum L1. The bridge will be managed by the Optimism Collective. Therefore, OP Chains will share the security derived from the Ethereum consensus and the social decision-making of the Optimism community.
The bridge will contain all configuration information related to the chain (chain ID, gas limit, etc.), unlocking the following features:
Operational nodes on any given OP chain will be able to deterministically derive the state of all OP chains in the hyperchain
The contract address of the chain will be able to be calculated before deployment, allowing activities on the chain before joining the super chain. This may be useful for testing or experimenting with the execution environment before plugging it into the proof system.
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to sort
Hyperchain envisions a network of interconnected OP-chains, some of which will share a set of orderers. The decision to self-sort, leverage Optimism Collectives sorters, or enlist the services of a decentralized set of sorters will be at the discretion of each OP chain. A market for third-party decentralized ordering protocols is expected to emerge.
Self-sequencing introduces a new revenue model where developers earn fees and MEV from the chains they publish. A decentralized orderer will serve multiple rollups simultaneously and use cryptoeconomic incentives to hold operators accountable. A shared orderer enables atomic and trust-minimized cross-chain rollup communication as nodes produce blocks on each chain simultaneously. This is a key interoperability improvement for messaging layers such as IBC that rely on asynchronous cross-chain messaging. Other expected benefits of shared sequencers include:
Since there is no intermediate bridge or messaging layer, the attack surface is smaller.
When bridging, neither party has to worry about chain reorganization.
Reduce costs by eliminating the need for cross-chain consensus verification.
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Derivation: rollup operation
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Proof: Withdrawal and Bridging
The proof system is critical when withdrawing assets to L1 or bridging to other chains, as it is used to ensure that the external chain and the internal rollup agree on the state of the asset in both systems. Superchain will eventually use the Cannon fraud proof engine to handle L1 withdrawal disputes. Additionally, due to its modular design, Hyperchain will be able to support multiple redundant proof implementations simultaneously. This includes proof of implementation validity if desired by the Optimism community.
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Super chain progress
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progressive decentralization
In the process, Superchain will have various components decentralized. That is, the upgradeability of the chain factory, the realization of decentralized sorting, and the realization of the proof system.
Hyperchains will always require some form of decentralized governance. This will initially include a Chain Factory Upgradability Security Committee, but in the future, the Optimism mainnet may take on a new role of coordinating and managing the Hyperchain.
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future adjustment
The OP Stack initially provides secure defaults that must be followed by an OP Chain in order to be part of the Hyperchain. Chains that replace standard modules with experimental modules are considered hacks. However, in the future, Hyperchain may contain hacked chains as determined by Optimism governance. These may include:
Exchange Execution Layer
Swap out the data availability layer
Using Multiple Proof Systems Simultaneously
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competition analysis
Optimism was one of the first projects to address the composable ethereum rollup ecosystem, and a number of L2 competitors have announced their own projects in recent months. While each project has a different design, value capture mechanism, and culture, the proliferation of the rollup ecosystem is a key narrative and infrastructure unlock for future application development on Ethereum.
Composable multi-chain ecosystems are only now appearing in the Ethereum ecosystem, but when you narrow it down, the idea is not new. At a high level, they can be broken down into three different models:
Lisk (with shared security)
Fractal expansion
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Application Chain Ecosystem
Ethereum’s early successors, Cosmos and Polkadot, set out to alleviate network congestion and lead to the emergence of interoperable appchains, each with their own communities and use cases. Lisk is built using common development frameworks (Cosmos SDK and Substrate) and trust-minimized messaging protocols (IBC and XCM).
Polkadot: Polkadot can be said to be a pioneer in scaling. It is one of the first examples of a network that separates execution from consensus and data availability, and features shared security by its main chain validators. Users of these chains do not pay fees to Polkadot main chain validators, nor are they required to use DOT as a fee token. Polkadot captures value from developers, as parachains require DOTs to be bonded nearly two years in advance, while parathreads operate on a pay-as-you-go basis. Most Polkadot-based chains crowdfund DOTs from their communities in order to have enough connections to join the ecosystem. Moonbeam was the winner of the first parachain auction in late 2021, procuring over $210 million in DOT at todays prices. Crowdfunding such a large amount of money is a heavy burden on the community until product market fit has been proven.
Cosmos: Until recently, all chains in the Cosmos ecosystem were required to bootstrap their own validator set. But last month, the Cosmos Hub adopted Replicated Security, and consumer chains can optionally use the Cosmos Hub validator set. The Cosmos Hub extracts value through a custom allocation of transaction fees and token inflation. Consumer chains can choose ATOMs, native tokens, or any other tokens (such as stablecoins) as transaction fees.
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Fractal Expansion Ecosystem
Fractal scaling refers to projects that primarily focus on interconnected networks that rollup over L3 using an L2 settlement layer. However, this does not preclude these projects from eventually offering permissionless rollup on L2. Doing so will ultimately depend on the projects licensing model.
Before diving into this type of rollup ecosystem, a quick recap of the main frameworks used to build rollups:
Ethereum-centric: Rollup SDK to build smart contract rollups, settlements to Ethereum-based chains (Ethereum L1 or L2, etc.).
Cosmos-centric: The sovereignty or settlement rollup is built using a modified version of the Cosmos SDK. Most of these chains use Celestia-based rollup and benefit from messaging via IBC.
However, there are no strict and fast rules for the rollup framework. The ultimate goal of most rollup SDKs is a customizable, chain-agnostic solution.
For the purposes of this analysis, an Ethereum-centric rollup that settles to L2 and a Cosmos-centric rollup that settles to a rollup on Celestia are considered to be the same basic business model. Both extract value by enforcing the use of intermediate or settlement layers to bring value to their respective protocols through bridging and batch submission fees.
Projects that provide rollup settlement layers act as a service that relieves developers of the need to plug in underlying consensus and data availability layers. The value proposition of a Cosmos-centric rollup settlement layer includes:
As a shared liquidity center, Celestia L1 does not manage tokens.
In addition to IBCs default trust-minimized bridge, a shared orderer service (an additional revenue source) is provided.
Many, such as Eclipse and Saga, provide codeless rollup deployment services to further simplify the build process.
On the other hand, the main appeal of the emerging settlement layers offered on Ethereum (such as Arbitrum Orbit, Starknet L3s, and zkSync Hyperchain) is the cheaper inter-rollup bridge compared to a standalone rollup connected to Ethereum L1. This is because existing Ethereum-based rollups (which do not share a sequencer set) must bridge down one layer before bridging to another chain. For end users, L3>L2>L3 must be cheaper than L2>L1>L2.
Arbitrum Orbit (and then Starknet and zkSync Hyperchain) will capture value by forcing a steady stream of builders who pay the protocol to settle on its chain. Anyone is free to customize and launch rollups using the Nitro rollup SDK, as long as they rely on the general Arbitrum chains (One and Nova) for settlement. This translates into revenue from rollup developers to the Arbitrum collator (currently operated by OffChain Labs, but subject to change at the DAOs discretion). Rollups built with Nitro will also be able to launch on Ethereum L1 as their own L2, but this requires explicit DAO permission. Arbitrum is effectively treating the usage of its codebase as a service where its community controls who they get value from.
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L2 Rollup Ecosystem
While L1 settlement is certainly possible for rollups built on Ethereum, whether the rollups ecosystem does so ultimately depends on the projects permissioning model. So far, Superchain has been on its own path, providing L1 settlement for the rollup ecosystem centered on Ethereum. Sovereign Labs and Polygon also seem to be creating an L2 rollup ecosystem, but the details of their implementation are thus far from clear.
Sovereign: Sovereign Labs is building the Sovereign SDK; a Cosmos-centric rollup SDK specifically for ZK-rollups. Chains built using the Sovereign SDK are designed to be natively interoperable and will adapt to any existing L1. Its unclear how the protocol intends to extract value from the ecosystem its developing in, but the Sovereign codebase currently uses the Apache 2.0 license, meaning anyone is free to use or modify its code.
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Where Hyperchain Comes in
Hyperchain exists in a market with a variety of emerging competitors and methods of extracting value. Hyperchain is different in that it captures value not from individual users or developers, but from service providers in exchange for the right to participate in its ecosystem. This revenue will be used to support public goods of the network. Superchains opt-in ordering model will likely involve an auction, where potential orderers will be required to pay for ordering rights and earn their share of the fees. The sequencer may also need to share a portion of the fee income with the RPGF.
Rollups will be able to deploy permissionlessly to L1, L2 or wherever they like using the OP Stack. By adding to Ethereum, OP Stack benefits from battle-tested code and existing user and developer base. Thus, the OP Stack can both increase the growth rate of builders and broaden the scope of designs they build.
To opt-in to the hyperchain is to opt-in to the collective governance of the chain factory and use bridging L1 and access to trust-minimized cross-chain messaging. A potential downside of this model is that the decision to upgrade the bridge rests in the hands of the wider OP community. This is likely to be a key driver of participation in governance and thus usage of OP tokens, and fits into the collective modus operandi of Optimism. However, OP chains that disagree with approved governance decisions will be required to leave or swallow changes to the rollup ecosystem. Not all developers are willing to sacrifice this level of sovereignty over their chains.
The hyperchain policy is by far the most permissive in the competitive rollup ecosystem. This, combined with the availability of the OP Stack, led to early success, as Optimisms codebase was the most forked of any L2. Before the launch of Superchain, the landscape of OP Stack was already expanding. It will likely grow even more as the no-code platform Conduit evolves to launch and manage the OP chain.
Summarize
Summarize
The Optimism community is embarking on a multi-year journey to build Hyperchain, an interconnected rollup ecosystem centered on Ethereum. The value proposition of Superchain is the sustainable expansion of Ethereum, combined with common infrastructure and community-based decision-making. Hyperchain aims to deliver maximum value to opt-in developers, not to find ways to extract value. With RPGF from sequencing revenue, this should lead to a surge of composable new applications and business models. For end users, this looks like a cost-effective computing platform for financial use cases and other similar applications. In the world of probability, the larger the range of possibilities, the better, and the super chain may provide broad opportunities and potential.
