The Rollup - Modular Appchains-As-Service With Gelato - Revelo Intel

The Rollup – Modular Appchains-As-Service With Gelato

In this episode of The Rollup, which took place on March 21, 2024, Robbie, Andy, and Luis discuss cloud services, RaaS, scalability, Gelato, and its products. Read our notes below to learn more.

Background

  • Robbie (Host) – Merkle Tree Maxi, Co-Founder of The Rollup
  • Andy (Host) – zkProof Maxi, Co-Founder of The Rollup
  • Luis (Guest) – Founder of Gelato
  • Gelato – Rollup As a Service platform

How did Web2 scale?

  • Luis says that the transition to virtual machines in the cloud is explained, offering developers flexibility in designing applications and scalability through horizontal scaling. Challenges of shared hosting providers are detailed, such as restrictions on frameworks and potential service degradation due to other users’ activities.
  • He adds that benefits of virtual machines in the cloud include maximum scalability, usability, flexibility in programming languages, and horizontal scaling capabilities.

Asynchronous Cloud Services scaling Web3

  • Luis says that the concept of asynchronous cloud services in Web3 is introduced as a key aspect of scalability and efficiency. He compares how servers communicate via HTTP in Web Two versus asynchronous mechanisms within services in Web3.
  • He adds that Bitcoin‘s success inspired attempts to replicate it, but Mastercoin and similar projects faced clear limitations. Ethereum emerged as a solution, offering a platform for deploying applications as smart contracts on a shared hosting provider network. Ethereum solved the problem of global distribution for application developers by allowing them to deploy applications as smart contracts on its network.
  • Luis says that Ethereum’s constraints included limitations in writing applications solely in Solidity on EVM, which hindered parallel processing. Congestion on the platform led to high fees and degraded user experiences during peak times like ICO or NFT drops.
  • He adds that the future of web3 scaling involves rollup-centric roadmaps leading to virtual blockchains or rollups-as-a-service environments. Rollups offer developers flexibility by enabling modifications to blockchain virtual machines and facilitating multiple instances deployment for enhanced scalability.

Gelato Web3 Cloud Services

  • Luis says that Gelato Web3 Cloud consists of base layer technologies such as Optimism, Arbitrum, Polygon, and zkSync, alongside modular parts like data availability layers. Apart from base layer technologies, Gelato offers services including serverless functions for automation and connectivity options like oracles (Pyth and Redstone).
  • He adds that deploying rollups on Gelato is streamlined via an app that allows users to select their stack and data layer with minimal effort.
  • Luis says that Gelato has modularized the Ethereum blockchain stack by introducing an execution layer known as rollup, which functions as a virtual machine (VM) in the cloud. The execution engine provided by Gelato eliminates the need for developers to manage it themselves, offering a fully managed solution in the cloud. This setup allows users to leverage Ethereum as a settlement layer and data availability layer. Gelato emphasizes trustless decentralized networks like Celestia that lead in data availability, providing options outside their Cloud offering. By utilizing Gelato’s Cloud execution, developers can benefit from both decentralized network security and cloud scalability.
  • He adds that beyond basic chain functionalities, Gelato offers essential services such as native Bridge UI on Gelato rollup as a service, RPC partners for scalable RPCs, and Block explorers to enhance application development. Through Gelato Web Cloud, developers can connect their rollups to various services like functions service (similar to AWS), enabling seamless integration with partners like Pyth and Redstone for Oracle data or relay services for account abstraction experiences.
  • Luis says that Gelato emphasizes cross-chain messaging services that enable communication between different rollups or chains similar to how applications interact with external services on AWS over HTTP. This functionality facilitates token bridging between different chains within applications. Shared sequencing is ed as a future concept where multiple instances of applications can synchronize for cross-synchronous Atomic smart contract calls. This feature is still under research but aims to provide enhanced scalability and synchronization capabilities across instances.
  • He invites developers to collaborate with Gelato in building and scaling the Ethereum ecosystem. Mentions various projects that have utilized their services over four years including Synthetix,and PancakeSwap, among others.

Limitations imposed by hardware on Scalability 

  • Luis says that in cloud computing, scalability is limited by hardware, unlike the virtual blockchains in web3 where scalability is not solely constrained by hardware. Infinite scale in web3 is more about adding virtual instances or machines rather than physical hardware, allowing for increased transaction processing capacity. Challenges exist in web3 such as communication between rollups but advancements are being made to enhance interoperability among instances.
  • He adds that rollups allow for scaling transaction processing by adding more instances, unlike Ethereum where new validators do not directly increase transaction throughput. Adding instances in rollups can significantly boost transaction processing capabilities compared to traditional Ethereum network scaling methods. Shifting execution to cloud environments via rollups unlocks greater scalability potential and efficiency for handling transactions.

Zero Gas App Chains and User Costs

  • Luis says that zero gas app chains ensure users transact at zero cost while developers cover minimal infrastructure expenses like settlement costs. Transitioning to zero gas models removes end-user burden of paying infrastructure costs, resembling conventional service billing structures.
  • He adds that identity projects assign real person identities to addresses on rollups, distinguishing humans from bots. This verification can involve completing tasks like CAPTCHA, video verification, or KYC. Gelato aims to lead the era of zero gas rollups for improved user experiences similar to Web2. The success of identity projects is crucial for on-chain identity verification. Established projects like Civic may need reinvention, while new ones such as Polygon ID are emerging with a focus on web3 integration.

Blockchain as a B2B Solution and the Future of dApps

  • Luis says that blockchains like rollups and zero-knowledge provide B2B solutions by enabling developers to create secure applications without directly handling user funds. Developers can build banks or casinos with minimal liability due to blockchain technology handling security aspects effectively.
  • He adds that paying for transactions through a paymaster function simplifies payment processes within rollup services by eliminating complex payment protocols. Developers act as paymasters by funding transactions directly without heavy boilerplate code typically required due to high gas costs.
  • Luis says that running things reliably in production is challenging, indicating that commoditization may occur due to competition driving prices down. He emphasizes the difficulty in achieving easy undifferentiated RaaScurrently, especially with complex technologies like zero knowledge rollups requiring expertise. He highlights the value of specialized RaaS providers with reliable production chains gaining brand recognition for high uptime and efficiency.
  • He anticipates gradual commoditization over time but emphasizes the importance of building a strong brand based on reliability and cost-effectiveness. They aim to bring costs down to make RaaS more accessible to a broader market segment while maintaining a premium status for quality service.

Evolution of Cloud Solutions and Blockchain Integration

  • Luis says that most current RaaS providers operate on existing cloud environments like AWS but may explore owning hardware in specific areas such as ZK proving. Web3 developers benefit from tailored experiences, expert advice, and seamless integrations provided by Ras providers compared to traditional cloud services like AWS.
  • He predicts increasing developer preference for blockchain tech due to its inherent security benefits, reduced attack vectors, and simplified development processes compared to web2 technologies.
  • Luis says that custom VM integration is seen as promising over the medium-to-long term for enhancing Gelato’s capabilities beyond EVM components.
  • He adds that rollups face challenges when unable to process a sufficient number of transactions due to scalability issues.
  • Luis says that when reaching processing limits or launching large-scale applications like gaming platforms with millions of users, scaling strategies become crucial. Horizontal scaling by deploying multiple instances of OP Stack or other solutions. Vertical scaling through modifications like using SVM or Monet to enhance processing capabilities. These strategies are viable within the rollup construction framework.
  • He adds that developers are actively testing and exploring modifications in rollup technology to enhance performance. Project releases in the upcoming months may showcase these advancements in action. He put emphasis on interoperability solutions like EigenLayer from Polygon facilitating seamless integration across various chains.

Importance and Challenges of Interoperability

  • Luis says that technologies such as EigenLayer aim to boost asynchronous communication between rollups by improving settlement times significantly.
  • He adds that liquidity managers face hurdles in building efficient systems on optimistic rollups due to constant inventory rebalancing requirements for user accessibility. Solutions like EigenLayer reduce rebalancing time from days to minutes, enhancing capital efficiency for liquidity providers.
  • He acknowledges the critical role played by developers and project owners leveraging advanced technologies for service delivery improvements.
  • Luis says that while end-users may not directly interact with certain technologies, businesses benefit significantly from streamlined services at reduced costs without compromising quality.

Blockchain Cloud Solutions vs. Traditional Cloud Services 

  • Luis says that deploying Hyperlane independently allows for more control and eliminates the need to rely on teams for deployment.
  • He adds that utilizing economical tokens is crucial for ensuring security and leveraging the benefits of technologies like ZK technology. Users with high TVL chains or high-security requirements should opt for canonical assets and rollup bridges to maximize technology benefits.
  • Luis says that choosing between full security or flexibility depends on user requirements, indicating a lack of one-size-fits-all solution.
  • He adds that collaborating closely with teams from different bridge technologies while acknowledging no perfect solution yet.
  • Luis says that uncertainty prevails regarding which bridging technologies will dominate in the future, emphasizing ongoing developments as intriguing to observe.

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Show Information

  • Medium: Youtube
  • Show: The Rollup 
  • Show Title: Modular March Episode 8: Modular Appchains-As-Service With Gelato
  • Show Date: March 21, 2024