Crypto Gloss

Based Rollups

Based rollups are an emergent Layer 2 design philosophy that solves the fundamental tension in rollup architecture: every major rollup (Arbitrum, Optimism, Base, zkSync) currently relies on a centralized sequencer run by the rollup team — a single company ordering transactions, capable of censoring users, extracting MEV unilaterally, and creating a single point of failure. The “based” naming (proposed by researcher Justin Drake in 2023) means sequencing is based on — delegated to — Ethereum L1 validators/proposers. A based rollup removes the rollup’s own sequencer entirely. L1 proposers include rollup transactions in their blocks, inheriting all of Ethereum’s validator set properties: liveness guarantees, censorship resistance, and eventual decentralization. Taiko is the primary production implementation; multiple research teams are extending based rollups with “based preconfirmations” to match the latency advantages that centralized sequencers currently provide.

Background: The Sequencer Centralization Problem

All current major rollups operate with a centralized sequencer:

Rollup Sequencer Operator
Arbitrum Offchain Labs
Optimism/Base Optimism Foundation / Coinbase
zkSync Era Matter Labs
Starknet StarkWare
Scroll Scroll Foundation

What a sequencer does:

  1. Receives user transactions
  2. Orders them (determines which txn comes first in the batch)
  3. Executes them against current state
  4. Publishes batches to L1

The centralization risks:

  • Censorship: Sequencer can exclude specific addresses or transactions
  • MEV extraction: Sequencer controls ordering — can front-run user trades
  • Downtime: If the sequencer goes offline, the rollup stops (users must wait)
  • Liveness dependency: Users trust a single company’s server is running
  • “Emergency exit”: Users can force their transactions to L1 directly but with delay/cost

The Based Rollup Design

Core idea (Justin Drake, 2023): Don’t run a rollup sequencer at all. Let Ethereum L1 proposers sequence rollup transactions.

How It Works

  1. L1 validators/proposers include rollup transactions in their Ethereum blocks alongside L1 transactions
  2. Rollup state is derived from the order of transactions as they appear in L1 blocks
  3. No separate rollup sequencer exists — the rollup is “based” on L1 sequencing

Properties inherited from L1:

  • Liveness: As long as Ethereum produces blocks, the rollup produces blocks
  • Censorship resistance: L1 validators must censor at the L1 level (regulated by Ethereum consensus)
  • Decentralization: Thousands of Ethereum validators participate in proposing

Based Rollup vs. Traditional Rollup

Aspect Traditional Rollup Based Rollup
Who sequences Rollup company Ethereum L1 validators
Liveness Depends on sequencer Inherits L1 liveness
Censorship resistance Low (single sequencer) High (same as Ethereum L1)
MEV Captured by sequencer Flows back to L1 validators
Latency Fast (~100ms with centralized sequencer) Depends on L1 block time (12 seconds)
Revenue Sequencer fees to rollup team Sequencer revenue to Ethereum validators

Taiko: Primary Based Rollup

Taiko is the leading based rollup in production, launched its type-1 ZK-EVM mainnet in May 2024 as a based rollup.

Taiko’s architecture:

  • Type-1 ZK-EVM (byte-code-equivalent to Ethereum — most compatible)
  • Based sequencing: L1 proposers include Taiko blocks
  • Proposer/prover separation: L1 proposers propose blocks; prover network generates ZK proofs asynchronously
  • TAIKO token: Used for prover rewards and governance

Taiko’s tradeoff observation: Being type-1 EVM-equivalent and based-sequenced means:

  • Maximum compatibility with Ethereum tooling (no recompilation, works with all Ethereum tools)
  • Slower than centralized-sequencer rollups (12-second L1 block time vs. 100ms)
  • More expensive to prove (full EVM equivalence requires more expensive ZK proofs)

Based Preconfirmations

The primary argument against based rollups is latency: centralized sequencers provide near-instant soft confirmations (~100ms); based rollups depend on L1 blocks (~12 seconds).

Based preconfirmations solution:

L1 validators can optionally sign a preconfirmation — a cryptographic commitment that they will include a specific user transaction in their next block:

  1. User submits transaction to an “L1 proposer looking ahead to their next turn”
  2. The proposer signs a preconfirmation: “I commit to including txn X in my next block, or I’m slashed”
  3. User has near-instant (~100ms) soft confirmation from a real L1 validator
  4. When the validator’s block comes, the transaction is included

Economics of preconfirmations:

  • Validators earn preconfirmation fees for providing speed guarantees
  • Slashing condition: fail to include a preconfirmed transaction → lose stake
  • Creates a market for “preconfirmation service” on top of Ethereum L1

Research and implementation:

  • Bolt Protocol (Chainbound): Smart contract framework for Ethereum-native preconfirmations
  • Espresso Systems: Preconfirmation-capable shared sequencer
  • Commit-Boost: PBS (Proposer-Builder Separation) software allowing validators to opt into preconfirmation duties

Based Rollups and MEV

In traditional rollups, the sequencer extracts MEV — front-running user trades, running selective inclusion, etc. — all of which flows to the rollup operator.

In a based rollup:

  • L1 proposers now sequence rollup transactions
  • MEV from the rollup flows to L1 proposers (Ethereum validators)
  • This is seen as positive for Ethereum’s economic security (validators earn more) but means rollup teams earn less fee revenue

PBS (Proposer-Builder Separation) in context:

  • Today, sophisticated block builders (Flashbots, BeaverBuild, Titan) bundle MEV-optimized blocks
  • In a based rollup world, these builders also include rollup transactions
  • Rollup MEV funnels into the existing MEV supply chain → Ethereum validators benefit

Based Rollups vs. Shared Sequencers

Both approaches address sequencer centralization:

Approach Based Rollup Shared Sequencer (Espresso/Astria)
Sequencer Ethereum L1 validators Separate decentralized network
Latency 12s (improved with preconfs) ~400ms (HotShot consensus)
Cross-rollup atomicity Native (same L1 block) Depends on sequencer coordination
New trust None (Ethereum only) Validator set of sequencer network
Ecosystem fit Ethereum-aligned rollups Multi-chain rollups

Based rollups are considered more Ethereum-aligned (no new trust assumptions); shared sequencers are more flexible (not limited to Ethereum ecosystem).

Social Media Sentiment

Based rollups are one of the most discussed Ethereum L2 design topics in 2024–2025. Justin Drake’s original post ignited significant debate. The Ethereum research community (especially those aligned with Ethereum-centrism) heavily favors based rollups because they strengthen Ethereum’s role as the sequencing layer rather than allowing rollup operators to extract value. Critics note the latency problem (12-second blocks are a real UX problem for trading applications) and argue that based preconfirmations introduce their own complexity. Taiko’s launch demonstrated that based rollups are technically feasible in production. The broader narrative increasingly treats “based” as a positive design property — beyond rollups, “based” Ethereum applications (using L1 validators for coordination) is emerging as a design pattern for next-generation infrastructure.

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