The Rollup - Chain Abstraction

In this episode of The Rollup, which took place on August 7, 2024, Robbie, and Andy hosted Arjun, Matt, Tabasco, Burnt Banksy and Alejo to discuss modular blockchain scaling, chain abstraction, interoperability solutions, and the future of decentralized infrastructure, and more. Read our notes below to learn more.

Background

Andy (Host) – zkProof Maxi, Co-Founder of The Rollup

Robbie (Host) – Merkle Tree Maxi, Co-Founder of The Rollup

Arjun (Guest) – Founder at Everclear

Matt (Guest) – Co-Founder of Caldera

Tabasco aka Ethan (Guest) – Developer Relations at Particle Network

Burnt Banksy (Guest) – Founder at XION

Alejo (Guest) – Co-Founder of Lumio

Everclear – an Ethereum layer 2 that facilitates settlement netting

Caldera – a platform for launching customizable, high-performance rollups with Arbitrum Nitro, Optimism Bedrock, zkSync ZK Stack, and Polygon CDK.

Particle Network – a comprehensive development platform that aims to make the transition from Web2 to Web3 smoother and more efficient for developers

XION – a walletless L1 purpose-built for mainstream adoption through chain abstraction

Lumio – a roll-up technology suite that enables developers to build with any VM on any chain

Innovations in Blockchain Rollups, Chain Abstraction, and Crypto Accessibility

Matt introduces himself as the co-founder of Caldera, a modular blockchain rollup as a service platform. He mentions they help launch customizable L2s and L3s on Ethereum, working with chains like Manta, and ApeChain. Matt acknowledges they’re part of both the problem of chain fragmentation and the solution in helping find infrastructure providers.
Tabasco (Ethan) introduces himself as working in developer relations at Particle. He explains Particle is building chain abstraction infrastructure at the account level, creating Universal Accounts that allow users to have one balance and address across all chains. This enables users to pay for transactions using any token from any chain, creating a chain-abstracted experience.
BurntBanksy introduces himself, mentioning his background with NFTs. He explains he’s been working on generalized abstraction, aiming to remove barriers of entry for crypto users. He’s building Xion to showcase crypto benefits without users needing to understand all the complexities.
Alejo introduces himself as the co-founder of Lumio, which is building a VM abstraction framework for existing L2s and L1s. Their goal is to enable alt VMs like SolanaVM and MoveVM to work within popular frameworks like Optimism OP stack and arbitrum Nitro, allowing easier deployment and composability for developers from other ecosystems.
Arjun introduces himself as one of the founders of Everclear (previously Connext). He explains Everclear is the first clearing layer, coordinating settlement between chains and different liquidity-based systems. It acts as a foundational infrastructure layer under chain abstraction protocols, helping bridges coordinate settlements and reduce prices.

Exploring Ethereum’s Horizontal Scaling and Rollup Ecosystem

Matt discusses the horizontal scaling approach of Ethereum using rollups. He notes that Caldera is seeing significant demand, with dozens of teams contacting them monthly to launch their own chains. Matt predicts hundreds of legitimate rollups being used in the near future. He highlights the benefits of rollups inheriting Ethereum’s security and decentralization properties, but points out the current lack of native interoperability between rollups at the protocol level. Matt highlights the importance of solving this interoperability issue to prevent UX fragmentation.
Alejo compares Ethereum’s rollup-based scaling approach to monolithic approaches like Solana or Aptos. He suggests that while rollups can scale linearly with TPS, they come with fragmentation issues. Alejo envisions a future where users can interact with multiple chains seamlessly without worrying about the underlying infrastructure. He sees the current fragmentation as a necessary step towards a more user-friendly experience.
Arjun provides historical context, relating current discussions to earlier debates about vertical versus horizontal scalability from 2018. He contrasts the Solana thesis of optimizing at the VM layer for limited utility with the approach of building systems that can scale to meet potential future demand. Arjun argues for the latter, citing past experiences where the ecosystem outgrew initial scaling solutions. He highlights the importance of making blockchain easy and cheap enough for mass adoption without making directional bets on the scale of adoption.
BurntBanksy acknowledges that many elements are being addressed simultaneously in the chain abstraction conversation. He notes that while these discussions aren’t entirely new, having evolved from earlier concepts like the Appchain thesis, the current situation feels more urgent due to the proliferation of rollups. BurntBanksy highlights the challenge of keeping up with rapid developments in the space, describing it as “tripping over ourselves” while trying to address emerging issues.

Addressing Fragmentation and Security in Modular Blockchain Ecosystems

Tabasco points out that fragmentation has always been an issue, even between monolithic chains. However, he argues that with the shift towards modular scaling and application-specific chains, fragmentation becomes a more significant problem. This is because users may lose their balance, address, or infrastructure when moving between applications on different chains. Tabasco suggests that chain abstraction has gained popularity as a solution to this increased fragmentation in the modular ecosystem.
Arjun agrees with Tabasco’s point about fragmentation, noting that in the past, there was little overlap between users of different chains. Now, with rollups, users are more likely to interact across multiple chains, making fragmentation a more pressing issue.
Alejo raises a question about the responsibility of service providers in informing users about the risks associated with different rollups, particularly regarding their varying levels of decentralization and security.
Robbie mentions MetaMask’s approach to warning users about potential scams, noting that these warnings are often overly aggressive or inaccurate.
Tabasco responds to Alejo’s question, suggesting that users already trust applications to a certain degree. He argues that the responsibility for choosing secure environments lies primarily with application developers, as users are more likely to trust the application than the underlying chain or infrastructure provider.
Arjun provides context on the ongoing concerns about chain abstraction’s impact on security. He suggests two approaches to mitigate risks:
- Users should keep most of their funds on more secure chains, only moving the necessary amount to less secure chains for specific interactions.
- Service providers (solvers) act as a filter, being incentivized to avoid interacting with insecure chains or applications to protect their own liquidity.
Arjun argues that this economic incentive for solvers to be self-preserving will likely result in applications either ensuring they have proper security measures in place or being unable to support solvers in their ecosystems.

Exploring Security, Chain Abstraction, and Interoperability in Modular Blockchains

Alejo suggests that standardization and social consensus around safety metrics could help users and intermediaries assess the security of different chains and applications. He proposes that frameworks like the Superchain could provide a standard for rollup security, allowing users and wallets to easily identify safer options.
Andy introduces the concept of the “modular mullet” – chain abstraction on the front, modular blockchains on the back. He asks about the relationship between interoperability and chain abstraction.
BurntBanksy responds, noting that chain abstraction is partly a narrative combining various ideas. He argues that interoperability is crucial for chain abstraction, as users can’t be free from knowing about chains if they still have to choose one.
Tabasco elaborates on the distinction between interoperability and chain abstraction. He defines chain abstraction as an experience that allows users to interact with applications without manual multichain processes. Tabasco outlines three layers of chain abstraction:
- Account layer (user-facing, e.g., Particle’s work)
- Application layer (for developers, e.g., Socket, Agoric cluster)
- Blockchain level (intrinsic interoperability between chains, e.g., Agg layer, Node kit)
Tabasco highlights that while chain abstraction and interoperability are closely related, they are separate concepts. Strong interoperability enhances chain abstraction but isn’t necessarily a requirement.
Robbie asks how shared sequencers and other blockchain-level interoperability solutions affect chain abstraction tools higher up the stack.
Alejo responds, referencing Arjun’s earlier point about solvers’ demand for settling on different rollups. He suggests that foundational interoperability layers like validity proofs or shared sequencers provide guarantees for solvers, making them more likely to solve intents between different chains. This could lead to higher demand and cheaper intent-based liquidity movements.

Navigating Blockchain Fragmentation: Interoperability, Rollups, and Chain Abstraction Solutions

Arjun explains that interoperability mechanisms act as the settlement layer for moving funds between blockchain ledgers. He highlights that higher-level solutions inherit the cost and security properties of the underlying interoperability layer.
Arjun highlights that rollups provide built-in interoperability with Ethereum L1, making them a good foundation for intent-based and chain-abstracted experiences. He mentions that Everclear acts as a negotiation layer between interoperability mechanisms and chain abstraction solutions to optimize settlement for solvers.
Matt points out that deeply integrated interoperability solutions like shared sequencing or the Superchain are effective but only solve fragmentation if universally adopted. He suggests that the end state will likely be a mosaic of different interop solutions connected by more flexible, lightweight protocols, similar to how the global banking system evolved.
Andy asks Matt how Caldera, as a rollup-as-a-service provider, is approaching the fragmentation problem and whether they’re building ecosystem-specific solutions.
Matt responds that Caldera can be both part of the problem and the solution. As a single team operating multiple rollups, they can make recommendations and nudge clients toward emerging standards. He highlights that Caldera can provide stronger security guarantees across their operated chains due to their standardized, audited setup. Matt explains that Caldera aims to work with the best teams in the space and act as a coordination layer for rollups, helping accelerate the adoption of standards and solutions.

Collaboration and Competition in the Chain Abstraction Ecosystem: A Modular Approach

Arjun addresses the question of collaboration incentives in the chain abstraction space. He contrasts the current situation with the earlier fragmentation in cross-chain solutions, where teams tried to solve every problem in the stack.
Arjun highlights that the chain abstraction ecosystem has done a better job of modularizing, with clearly defined actors solving different problems. He hopes this separation of concerns will lead to standardized interfaces, similar to how the modular ecosystem has developed.
Tabasco agrees with Arjun’s points and expands on the idea of competition and collaboration within chain abstraction. He suggests that competition occurs horizontally within each layer (account level, application level, and blockchain level), while vertical collaboration exists between these layers.
Tabasco argues that this structure allows for healthy competition that improves solutions while maintaining freedom of choice for developers.
Tabasco challenges the notion of a “chain abstraction race,” viewing it as a flawed concept. He sees chain abstraction as a public good and vision for the ecosystem rather than something to be monopolized. Tabasco highlights that chain abstraction itself is modular, aligning with Web3 and modular ethos.

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Show Information

Medium: Youtube
Show: Everclear
Show Title: Next Steps for Web 3: A Deep Dive into Modularity, Chain Abstraction, and Clearing Layer
Show Date: August 7, 2024