Author: Tom Ngo Source: blockworks Translation: Shan Ouba, Golden Finance
With the rapid development of blockchain technology, Layer-2 solutions have gradually become an important part of the Ethereum network. However, the centralization problem of the sorter, the core component of these solutions, is gradually revealing serious risks, undermining the basic principle of blockchain decentralization. In order to maintain the integrity of the network and prevent trust from being eroded, an urgent transition to a decentralized model that can better eliminate single points of failure is imperative.
If no timely action is taken, it will not only jeopardize network security, but also expose the entire ecosystem to serious threats, such as transaction review, security vulnerabilities, and potential leakage of customer data and funds.
Layer-2 Development and the Emergence of Centralization
Since the second quarter of 2024, Layer-2 solutions built on the Ethereum network have processed an average of 12 times more transactions than the base layer. On June 6, the total locked value (TVL) of the Layer-2 ecosystem rose to an all-time high of $49 billion, indicating that the adoption rate of these "execution" networks is increasing. However, as these solutions become more popular, the centralization of sorter operations has become more pressing.
Sorters are key components in Layer-2 solutions, responsible for sorting and batching transactions before they reach the Ethereum mainnet. They manage data flow by determining the order of transactions when multiple transactions occur at the same time. However, many of these tools currently face the risk of being controlled by a single entity. While this centralization can speed up transaction processing, it also brings significant drawbacks, such as censorship risks.
Most of today's leading Layer-2 solutions rely on "centralized" sorters, which usually means that the company building the Rollup is responsible for its own sorting operations. For example, in March 2024 alone, Coinbase's Base network generated $30 million in operating income for the company based on sorter fees, a figure that is approximately $360 million annualized. This centralized control raises concerns about the decentralized principles of blockchain.
Decentralization: The Future of Layer-2
Christine Kim, vice president of research at Galaxy Digital, emphasized that decentralization should not be viewed as a binary state, but as a spectrum, and centralized influence should be kept to a minimum. She believes that "decentralized sorters may be one of the most difficult initiatives for Rollup to achieve," but increasing decentralization and resilience is critical to the long-term development of Layer-2.
Users of the Consensys-backed zkEVM Rollup Linea recently suffered losses of up to $2.6 million, and the project development team decided to suspend the sorter and "review the attacker address to protect users and builders." This incident highlights the importance of decentralization and the dangers posed by sorter centralization. Decentralized sorters can eliminate single points of failure, making the network more resistant to attacks and technical failures, and truly embodying the core values of blockchain technology - transparency and efficiency.
Practice and Challenges of Decentralized Sorters
At present, most Layer 2 solutions have begun to realize the benefits of distributed control. By leveraging a network of validators and block producers, Layer-2 solutions can randomly select and rotate sorter nodes. This approach not only ensures a fair and secure sorting process while maintaining high performance, but also greatly reduces the risk of censorship or manipulation.
Ethereum founder Vitalik Buterin recently proposed a classification system for rollup networks - from Phase 0 to Phase 2, expressing his belief in the importance of decentralized sorters. He believes that most of today's leading rollups rely on some form of "training wheels", and in the future, Layer-2 must get rid of these temporary measures, otherwise it will face the risk of stagnation.
While the implementation of decentralized sorters is challenging, the long-term advantages it brings to projects and their communities are obvious. By reducing security costs and initiating a virtuous cycle, more community participation will enhance network security, attract more dApps and innovators, and thus promote the development of the entire ecosystem.
Looking to the future: from centralization to decentralization
The realization of sequencer decentralization is not only about technology, but also closely related to the value distribution of industry participants and contributors. Revenue sharing models such as sequencer mining will help improve user retention and establish a direct link between community participation, network security, and ecosystem development. In Bitcoin's second layer, the trend of decentralized sequencers providing mining rewards is also gradually taking shape.
Looking to the future, the Ethereum Layer 2 ecosystem must transcend the limitations of a single network and promote the transition of decentralized sequencers across multiple networks. This transition is critical to maintaining the integrity of blockchain technology. Established Layer-2 solutions should act quickly to avoid obsolescence and ensure the safety of users.
In summary, decentralized sequencers are not only the key to the healthy development of the Layer-2 ecosystem, but also the fundamental guarantee for ensuring the security and sustainability of the entire blockchain ecosystem. On the road to decentralization in the future, Layer-2 solutions need to take this as their goal, continuously advance technological progress, optimize governance structures, and truly realize the core value of blockchain.