Original author: Shivam Sharma, Binance Research
Original compilation: Huohuo
The era of L2 Rollup is coming, and activity on Ethereum L2 has reached an all-time high. L2’s average transactions per second (“TPS”) will begin to exceed Ethereum’s in late 2022.
Many of the latest wave of L2 releases have used OP Stack, an open source software development OP Stack that supports Ethereum L2, OP mainnet, and new players such as Base and Zora Network. Optimism envisions combining these Rollups with many Rollups in the future to form a decentralized L2 chain network, that is, a super chain.
This article takes an in-depth look at OP Stack and hyperlink theory, and then explores the growing OP Stack ecosystem, including Base, Zora Network, DeBank Chain, and more. Additionally, infrastructure solutions are explored to make this range of OP Stack chains accessible to developers and builders of all backgrounds.
01 About Optimism
Optimism is the company behind OP Mainnet, an Optimism Rollup similar to the Ethereum Virtual Machine (“EVM”) that has been running since 2021 and is one of the leading Ethereum Layer 2 solutions. As of the writing of this report, the total locked value (TVL) of the OP mainnet exceeds US$2.6 billion, and it occupies the second largest market capitalization position among all Ethereum Layer 2 solutions, with a market share of more than 25%.
In October 2022, Optimism introduced the OP Stack, which is a highly scalable, highly interoperable modular open source blueprint of various types. It also introduces the concept of super chain, which refers to a highly integrated and unified Layer 2 blockchain group built on OP Stack. The next big development is migrating their L2 Rollup to Bedrock.
A brief development timeline of Optimism so far
OP Stack is a standardized, shared and open source development OP Stack that supports the OP main network. It is composed of various software components and builds Optimisms L2 Rollup, which is used to create a shared, interoperable and collaborative L2 blockchain network. OP Stack aims to simplify the construction of L2 blockchain, similar to a supermarket for building L2, allowing builders to easily modify or create modules to meet their specific needs.
Builders can modify existing modules or create new ones to suit their needs, and OP Stack deconstructs and packages different build L2 components into independent modules. Ultimately, Optimism expects highly compatible L2s, called OP chains, that will form part of a super chain.
The Super Chain Theory is Optimisms vision to upgrade its ecosystem to a Super Chain. Hyperchain is conceived as a decentralized network of L2 chains (OP Chains) that share security, communication layers and open source technology Stack (OP Stack). These chains will be standardized and used as interchangeable resources to enhance chain interoperability.
This standardization will enable builders to create applications that target the entire hyperchain, rather than just those running on the underlying chain. It should be noted that the super chain is still a concept and is being continuously improved.
Schematic diagram of super chain
02 The growing OP Stack ecosystem
When Bedrock is released in June 2023, we have already seen many Rollups based on OP Stack. Next, well take a closer look at some of these star projects and major infrastructure projects.
Taking a quick look at the table below, we notice that Base is far ahead in development. In fact, Base’s cumulative number of unique addresses is even higher than OP’s mainnet. Base’s Onchain Summer and integration with Coinbase to gain access to its user base may be some of the key reasons for these relatively high numbers.
Please note that only OP Mainnet, Base, Zora Network, and Public Goods Network are in the mainnet, while the remaining three projects we cover are still in beta.
(1) Projects worthy of attention
Base
Base was one of the first OP Stack L2s announced (initially in February 2023) and launched their public mainnet on August 9th. Base is a general L2 and is the most popular OP Stack chain after the OP mainnet.
Onchain Summer is a month-long launch event that coincides with the launch of Base and has attracted multiple partners, including Coca-Cola, to launch NFT Mint. The event attracted over 268,000 unique wallets from 75 unique series, generating over 700,000 Mint. The close connection with Coinbase enables Base to carry out multiple integrations, providing a convenient entrance for Coinbase users. Base has also launched over 100 dApps, and its ecosystem continues to grow.
In addition, friend.tech is a high-profile SocialFi platform that allows users to trade tokenized keys and has attracted a large number of users and transaction volume. However, it is still in beta and future growth may require attracting non-crypto and Web2 users.
After an initial surge in mid-August, daily trading on friend.tech slowed down significantly until it picked up again in recent weeks
The Base Ecosystem Fund is led by Coinbase Ventures and focuses on supporting early-stage projects including DeFi, fiat on/off-ramp and creator platforms. In addition, the Base team released Pessimism, an open source monitoring system to enhance the security of OP Stack and other EVM-compatible chains, focusing on the detection of protocol threats and security risk mitigation.
Since its mainnet launch in early August, Base’s user metrics have grown significantly throughout September
Based on the cooperation between Optimism and Base, they have reached an economic agreement, Base will donate 2.5% of sequencer’s total revenue or 15% of net profit to Optimism, and have the opportunity to win up to 118 million US dollars in OP Token over the next six years. . Although not explicitly announced, other OP Stack chains may also have similar revenue sharing agreements with Optimism, which shows the importance of shared contributions to the superchain’s collective infrastructure.
Zora Network
Zora Network is a decentralized, permissionless protocol that allows anyone to buy, sell and create NFTs. Additionally, they launched their own OP Stack Layer 2 network to support users and reduce platform costs.
They launched their mainnet on June 21, 2022 to provide a better user experience for NFT transactions as the cost of creating NFTs is less than $0.5 and offer many free Mint options. Compared to Ethereum, OP Stack’s inter-block time is only 2 seconds, allowing Zora Network’s transactions to be confirmed within seconds.
In addition, Zora Network has successfully conducted three rounds of financing, raising a total of $60 million, including a $50 million round led by Haun Ventures in 2022, which valued the company at $600 million. These funds will help promote the development and growth of Zora Network in the NFT field.
Zora user metrics have been growing steadily since late July
Public Goods Network
Public Goods Network (PGN) is an L2 protocol designed specifically to support public goods. Public goods refer to non-excludable and non-rivalrous products or services, such as parks, libraries and road infrastructure, and in the digital realm can include open source software, permissionless data and artificial intelligence models. The development of PGN is led by Gitcoin and SuperModular, and is supported by multiple public goods advocates, forming the Public Goods Alliance, responsible for the management and organization of PGN.
How PGN works PGN documents indicate that the vast majority of net sequencing costs will be used to support public goods projects, so as activity on L2 increases, so will the funding for public good projects. PGN aims to attract various types of dApps to be deployed in its L2, not just projects related to public goods. PGN plans to assess and allocate its fees to public goods projects in the six months to January 2024, with more details to be announced in the coming weeks.
Additionally, PGN plans to leverage Contract Guaranteed Revenue (CSR) after October 2023, which will allow developers to collect a percentage of transaction fees generated by their contracts and support them in creating sustainable business models. CSR may become part of the broader L2 network, and there is even an Ethereum Improvement Proposal (EIP) proposing to introduce CSR on EVMs L2.
PGNs user metrics grew steadily in August. Although new accounts slowed in September, transactions continued to climb
Mode
Mode is positioned to support high-growth L2 networks and empower users and developers with the ability to build world-class applications and expand the ecosystem by directly rewarding them. Revenue sharing incentives play a key role in achieving this goal.
Running an L2 network requires maintaining a sequencer, which is responsible for sorting, processing, and delivering L2 transactions to the L1 main chain. Typically, the transaction fees paid by users belong to the DAO or sequencer operating company. Mode’s goal is to distribute these ordering fees to developers and users of the network, rather than companies.
Mode-based developers will receive a portion of Modes sequencer revenue, based on the transaction fees they charge in deployed contracts. These fees are payable in U.S. dollars and are billed every two weeks. This approach allows developers to receive direct rewards for their work, helping to build predictable and scalable Web3 business models.
Mode encourages users, developers, and protocols to recommend new members to it in order to share a portion of transaction fee revenue. They also provide support to enable developers to build applications and provide integrated development tools. Mode is developing a developer dashboard to provide key metrics and insights to help developers scale more easily. They also plan to integrate multiple external tools and services to help developers build sustainable businesses. Finally, Mode takes a minimalist approach to governance, requiring only the DAO to vote on a few key issues, including deciding how sorting fee revenue is distributed.
Mode has close to 4 million transactions and has more than 36,000 unique accounts
Mode is currently on the public testnet and is expected to last until the end of September. The mainnet is expected to be launched in the fourth quarter of 2023.
DeBank
DeBank is a Web3 portfolio tracking protocol that offers a variety of products, including portfolio tracking systems, social networking services, and NFTs. DeBank Chain is the testnet of their L2 chain based on OP Stack and is expected to be launched in 2024.
The core goal of DeBank Chain is to reduce the transaction costs of user interaction within the DeBank ecosystem. Through the modification of the consensus mechanism, the gas cost of personal transactions has been successfully reduced to better meet the needs of high-frequency social interaction. In addition, DeBank Chain has direct built-in account abstraction capabilities while also generating protocol revenue. Since launching the testnet on August 11, DeBank Chain has recorded more than 2.1 million transactions, covering more than 50,000 unique wallet addresses. In addition, DeBank has attracted more than 250,000 registered users.
Ancient 8 and Ancient 8 Chain
Ancient 8 has been operating as a gaming guild and is cooperating with more than 100 games, aiming to help gamers enter the Web3 world. They introduced Ancient 8 Chain, an Ethereum L2 series focused on gaming. The chain’s testnet was launched on September 15th. Ancient 8s vision is to build a complete gaming ecosystem, including NFT sales, gaming community building, gaming identity and credential creation, and project marketing. They also established the Ancient 8 Collective, which consists of 8 core partners to jointly build the Ancient 8 chain ecosystem. The project has raised $10 million in financing.
Although Ancient 8 Chains testnet has only been launched for a few days, it has already recorded more than 2 million transactions involving nearly 5,000 independent accounts. These statistics demonstrate Ancient 8 Chains popularity and growth in the Web3 gaming space.
The testnet of ancient 8 Chain is still in its early stages
(2) Infrastructure
Conduit
Conduit is a rollup-as-a-service (“RaaS”) platform that allows developers to easily launch their own OP Stack rollups. The Conduit team operates and maintains Conduit so developers can focus on building the product rather than dealing with infrastructure.
Since the mainnet launch in March 2023, many different OP Stack chains, including Zora Network, Public Goods Network, Ancient 8 chain, and Mode, have chosen to partner with Conduit to launch their products.
Conduit is a solution that helps easily launch and manage OP Stack L2 Rollup. Developers can create their own L2 in minutes, including a block explorer, transaction tracker, and auto-scaling RPC. In addition, Conduit will automatically update each partners L2 and integrate with the Optimism super chain, and will also use part of the fees to support the Optimism charity fund.
Conduits integration allows partners to connect to other infrastructure projects such as Zora Network, Axelar, etc., thereby enhancing Conduits integrated infrastructure and making it easier for rollups to expand their user base.
Conduit has raised $7 million in seed funding, led by Paradigm.
AltLayer
AltLayer is a RaaS protocol that allows developers to initiate Optimism Rollups. It supports multi-chain and multi-virtual machine worlds, including EVM, WASM, Solana VM and Move VM, etc. Unlike Conduit, AltLayer supports a variety of different software development platforms. AltLayer is currently on testnet.
AltLayers products include a no-code dashboard that allows users to create custom L2 Rollups in minutes, and a Rollup SDK for developers who want to integrate Rollup services directly into their products. AltLayer also provides a shared sequencer set, making cross-chain atomic transactions and messaging possible for other L2s started with AltLayer.
AltLayer provides a core network called the beacon layer as an intermediate layer between the execution layer and data availability layer of L2. The beacon layer supports multiple aggregation SDKs, data availability solutions, sequence sets, and interoperability platforms, increasing Rollups flexibility and interoperability.
Flash tiers are one-time, application-specific rollups that are useful for high-traffic activities like NFT mints, mini-games, and more. AltLayer also provides standard Optimism Rollup as part of its platform, which is more suitable for long-term applications such as GameFi and SocialFi.
AltLayer raised $7.2 million in seed funding in 2022, led by Polychain Capital.
AltLayers universal Rollup OP Stack supports multiple protocols
03 Summary
We are witnessing the proliferation of various computing Stack chains, including general-purpose L2s such as Base and Mode, as well as specialized chains such as Zora Network, DeBank Chain, and Ancient 8 Chian.
New features such as Conduit integration are simplifying the deployment and expansion of OP Stack Rollup, providing the possibility for more L2 Rollups based on this Stack. Conduit combined with the uniqueness of the OP Stack is an interesting development whether to use a dedicated RaaS provider to grow the ecosystem compared to competing L2/L3 frameworks such as Arbitrums Orbit or zkSyncs ZK Stack.
The Ethereum Rollup indicator continues to refresh historical records, more and more dApps decide to deploy on L2 instead of L1, and the L2 rollup era is coming. EIP-4844, namely Proto-Danksharding, is expected to significantly reduce L2 Rollup fees and improve its competitiveness. The high level of L2 usage, the easy deployment of infrastructure such as OP Stack and Conduit, and the prospects of EIP-4844 will further promote the development of L2. We will wait and see how the future develops.
