Sequencer is a key technology in the field of cryptocurrency, which is used to sort transactions and create blocks. Before the block is confirmed, the pre-confirmation information will be sent to the user.
The importance of decentralized sorters is that as more volume and liquidity move to layer-two solutions (L2), centralized sorters may charge arbitrary prices and leverage user transactions. Therefore, finding a decentralized sorting solution becomes very important.
What is a "sorter"?
Sorters allow L2 to run efficiently by aggregating many L2 user transactions off-chain and submitting them as an aggregated single transaction to the main chain L1. This way, the cost of this commitment can be amortized across all user transactions in the set. Sorters can also compact collections to further save on main chain data availability costs. Overall, it is an essential component of L2.
However, the sorter has control over the ordering of transactions in the collection. The sorter can choose not to include user transactions, and the sorter can also extract MEV (Maximum Yield Realizable) in the collection through standard reordering and insertion extraction methods. They actually have preferential write access to the expansion. Notably, since the orderer can interact with the contract, only error-free transactions can be reliably enforced through on-chain mechanisms. And there are bugs that may fail when forcing the sort.
This makes the sequencer a semi-trusted role for scaling users. Orderers can delay user access and extract value from user transactions. Further restricting the behavior of the orderer through decentralization is a topic of active research.
Overall, the sequencer plays an important role in the OP;line L2. It improves user experience and reduces transaction costs for users by aggregating and submitting transaction collections. However, since the sorter has control over transaction sorting and value extraction, we need to continue to study how to restrict the behavior of the sorter in a decentralized way to ensure the interests of users and the security of expansion.
Centralization risk of sorter
Currently, the sorter in optimistic scaling still has some problems in terms of distribution. Since the orderer usually plays a centralizing role, there are the following centralization risks:
Weak censorship protection: Unlike the near-infinite number of distributed nodes on the main chain, centralized orderers may not be able to ensure that user transactions will be included on the chain. A centralized coordinator controlled by a legal entity may selectively exclude specific transactions due to regulatory requirements. Although there are other mechanisms to solve the weak censorship problem of optimistic scaling (such as forced exit, escape channel, include list or adding threshold encryption, etc.), we still need to accept the assumption that the centralized orderer is likely to have weak Anti-censorship capability.
Weak liveness: A centralized orderer may not be designed to handle the computational processing and proof generation required to keep the system running all the time. Scaling is less active due to hardware failure or massive spam from validators or bots (eg; Arbitrum Token Launch, Optimism Delay); RPC; or orderer downtime.
*MEV; Benefits: Current centralized orderers typically follow a first-come, first-served transaction ordering rule. To ensure they are not extracting user transactions through node privileges; MEV, additional trust is required, or that third-party ordering services they employ (eg; Chainlink FSS) do not behave maliciously.
Some shared, outsourced, or sequencer-based solutions might be able to address these issues, but it's too early for such a solution. Additionally, many distributed orderer solutions (such as Proof of Authority, Leader Selection for Proof of Stake, MEV; Auctions, and Proof of Energy) are still in the concept design stage.
The layout of the sequencer
Vitalik Buterin; proposed several ways to build a decentralized sorter. These include sorter/block auctions, "PoS" based random selection and "DPoS" voting, etc. However, most solutions focus on determining which participants have the right to propose the next block or sequence of blocks, often ignoring the ordering mechanism itself.
PBS; aims to protect proposers from centralized maximized transaction value (MEV), facilitate block builder competition, enhance bidder privacy, and remove negative externalities. However, unlike the first-layer solutions (L1), L2's; PBS; faces challenges such as privacy, latency, and cross-chain; MEV; One way to address privacy concerns is to use;Flashbots;'s;SUAVE;protocol, while combining;SUAVE;with a shared sequencer is a potential;PBS;solution for L2.
For;Aztec;PBS - "Prover-Builder-Separation" instead of "Proposer-Builder-Separation". Proposers of Aztec; use pending transactions from the; mempool; to build blocks, which include ordering commitments, rewards to provers, and the amount of "Aztec; burnt". It should be noted that the proposer of Aztec; actually plays the roles of builder and proposer.
Aztec;'s; PBS; separates the powers of transaction ordering (builders) and block inclusion (validators), a separation that prevents monopoly of block generation. Proposers then collect votes and create a block record indicating the distribution of validation tasks among multiple validators for a particular block. This is important to keep the validation task decentralized, as validator participation becomes an indicator of winning blocks.
Additionally, they use the ;TARGET_PROVERS; count to increase the cost for the attacker to maintain the manipulation mechanism. One problem with this model, however, is that an attacker can avoid being penalized if they allow validators to be included and generate proofs for only a small fraction of blocks, leaving the majority to a single validator.
Throughout the process, multiple proposed blocks will be ranked through a voting phase, and the block with the highest number of votes will become the head of the chain. However, this mode can lead to "griefing" attacks, where validators vote for blocks but do not generate proofs. Aztec; suppresses this by introducing the "Slash" and "Redundancy" mechanics. Additionally, SUAVE; can serve as a builder of; Aztec; providing privacy protection and potentially decentralized block ordering.
There are a few other projects building shared sorters, including:
Espresso, plans to utilize; EigenLayer; of; ETH; re-staking as a security model;
Astria, its sequencer differs from; Espresso; in that it doesn't execute transactions, built in; PBS, and builds a "Rollup" on top of; Celestia; and; Rollkit;
Radius, whose orderers focus on reducing harmfulness through encrypted transactions; MEV, which maintains a set of orderers and randomly selects one in each epoch.
The goal of these projects is to implement a decentralized orderer that increases the certainty and security of transaction ordering and improves user experience.
Summarize
With the continuous development and innovation of blockchain technology, the working mechanism of the decentralized sorter will continue to evolve and improve. This will provide users with a more secure, reliable and efficient trading experience while protecting them from manipulation and unfair practices by centralized institutions.
In the future, we can expect to see more innovative solutions and projects emerge to solve the challenges in the field of sequencers. With the advancement of technology, issues such as privacy protection, transaction speed, and cross-chain compatibility will be better resolved.
The development of a shared sequencer will enable different "Rollups" to work together and provide composability and flexibility to meet the needs of different industries, applications and use cases. With the continuous maturity and promotion of shared sorters, we can foresee the emergence of thousands of decentralized sovereign; Rollup; to provide users with more choices and better services.
In conclusion, through continuous research and innovation, we have reason to believe that the future decentralized orderer will be a key component in building a safe, efficient and fair blockchain ecosystem. They will promote the further popularization and application of blockchain technology, bringing a more open and inclusive financial and digital experience to users around the world.
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Deciphering the Sequencer: The Key to Guaranteeing the Authenticity of Transactions
Sequencer is a key technology in the field of cryptocurrency, which is used to sort transactions and create blocks. Before the block is confirmed, the pre-confirmation information will be sent to the user.
The importance of decentralized sorters is that as more volume and liquidity move to layer-two solutions (L2), centralized sorters may charge arbitrary prices and leverage user transactions. Therefore, finding a decentralized sorting solution becomes very important.
What is a "sorter"?
Sorters allow L2 to run efficiently by aggregating many L2 user transactions off-chain and submitting them as an aggregated single transaction to the main chain L1. This way, the cost of this commitment can be amortized across all user transactions in the set. Sorters can also compact collections to further save on main chain data availability costs. Overall, it is an essential component of L2.
However, the sorter has control over the ordering of transactions in the collection. The sorter can choose not to include user transactions, and the sorter can also extract MEV (Maximum Yield Realizable) in the collection through standard reordering and insertion extraction methods. They actually have preferential write access to the expansion. Notably, since the orderer can interact with the contract, only error-free transactions can be reliably enforced through on-chain mechanisms. And there are bugs that may fail when forcing the sort.
This makes the sequencer a semi-trusted role for scaling users. Orderers can delay user access and extract value from user transactions. Further restricting the behavior of the orderer through decentralization is a topic of active research.
Overall, the sequencer plays an important role in the OP;line L2. It improves user experience and reduces transaction costs for users by aggregating and submitting transaction collections. However, since the sorter has control over transaction sorting and value extraction, we need to continue to study how to restrict the behavior of the sorter in a decentralized way to ensure the interests of users and the security of expansion.
Centralization risk of sorter
Currently, the sorter in optimistic scaling still has some problems in terms of distribution. Since the orderer usually plays a centralizing role, there are the following centralization risks:
Some shared, outsourced, or sequencer-based solutions might be able to address these issues, but it's too early for such a solution. Additionally, many distributed orderer solutions (such as Proof of Authority, Leader Selection for Proof of Stake, MEV; Auctions, and Proof of Energy) are still in the concept design stage.
The layout of the sequencer
Vitalik Buterin; proposed several ways to build a decentralized sorter. These include sorter/block auctions, "PoS" based random selection and "DPoS" voting, etc. However, most solutions focus on determining which participants have the right to propose the next block or sequence of blocks, often ignoring the ordering mechanism itself.
PBS; aims to protect proposers from centralized maximized transaction value (MEV), facilitate block builder competition, enhance bidder privacy, and remove negative externalities. However, unlike the first-layer solutions (L1), L2's; PBS; faces challenges such as privacy, latency, and cross-chain; MEV; One way to address privacy concerns is to use;Flashbots;'s;SUAVE;protocol, while combining;SUAVE;with a shared sequencer is a potential;PBS;solution for L2.
For;Aztec;PBS - "Prover-Builder-Separation" instead of "Proposer-Builder-Separation". Proposers of Aztec; use pending transactions from the; mempool; to build blocks, which include ordering commitments, rewards to provers, and the amount of "Aztec; burnt". It should be noted that the proposer of Aztec; actually plays the roles of builder and proposer.
Aztec;'s; PBS; separates the powers of transaction ordering (builders) and block inclusion (validators), a separation that prevents monopoly of block generation. Proposers then collect votes and create a block record indicating the distribution of validation tasks among multiple validators for a particular block. This is important to keep the validation task decentralized, as validator participation becomes an indicator of winning blocks.
Additionally, they use the ;TARGET_PROVERS; count to increase the cost for the attacker to maintain the manipulation mechanism. One problem with this model, however, is that an attacker can avoid being penalized if they allow validators to be included and generate proofs for only a small fraction of blocks, leaving the majority to a single validator.
Throughout the process, multiple proposed blocks will be ranked through a voting phase, and the block with the highest number of votes will become the head of the chain. However, this mode can lead to "griefing" attacks, where validators vote for blocks but do not generate proofs. Aztec; suppresses this by introducing the "Slash" and "Redundancy" mechanics. Additionally, SUAVE; can serve as a builder of; Aztec; providing privacy protection and potentially decentralized block ordering.
There are a few other projects building shared sorters, including:
Espresso, plans to utilize; EigenLayer; of; ETH; re-staking as a security model;
Astria, its sequencer differs from; Espresso; in that it doesn't execute transactions, built in; PBS, and builds a "Rollup" on top of; Celestia; and; Rollkit;
Radius, whose orderers focus on reducing harmfulness through encrypted transactions; MEV, which maintains a set of orderers and randomly selects one in each epoch.
The goal of these projects is to implement a decentralized orderer that increases the certainty and security of transaction ordering and improves user experience.
Summarize
With the continuous development and innovation of blockchain technology, the working mechanism of the decentralized sorter will continue to evolve and improve. This will provide users with a more secure, reliable and efficient trading experience while protecting them from manipulation and unfair practices by centralized institutions.
In the future, we can expect to see more innovative solutions and projects emerge to solve the challenges in the field of sequencers. With the advancement of technology, issues such as privacy protection, transaction speed, and cross-chain compatibility will be better resolved.
The development of a shared sequencer will enable different "Rollups" to work together and provide composability and flexibility to meet the needs of different industries, applications and use cases. With the continuous maturity and promotion of shared sorters, we can foresee the emergence of thousands of decentralized sovereign; Rollup; to provide users with more choices and better services.
In conclusion, through continuous research and innovation, we have reason to believe that the future decentralized orderer will be a key component in building a safe, efficient and fair blockchain ecosystem. They will promote the further popularization and application of blockchain technology, bringing a more open and inclusive financial and digital experience to users around the world.