Eigen Seminar | Layer2: An Incomplete Guide to Rollups

I Introduction

Starting from “Genesis’’ of Bitcoin to the emergence of Crypto Kitties on the Ethereum network, the unsatisfactory TPS(Transaction per Second) has always been the issue we intend to solve. The TPS in the Ethereum, which is almost 15, cannot satisfy most applications to provide up-to-date and stable support effectively. Therefore, the TPS demand, which is nearly tens of thousands in the Internet industry, cannot strike a balance with the traditional TPS on the Ethereum network. Even quite a few users claimed that the public chain has been in “unavailable” status for a long period. Nevertheless, the enthusiasts won’t stop here.

II Comparison of Mainstream Schemes

Solutions for Ethereum scaling have sprung up in the past few years. Various frameworks have distinct characteristics. The mainstream solutions are as follows:

  • L1 Scaling:

Sharding: Sharding origins from database terms. It refers to splitting the large database into many smaller and manageable parts to achieve more efficient interaction. Blockchain sharding means to split the blockchain network to improve its expansibility. According to the latest Ethereum 2.0 specifications, the Ethereum blockchain will be divided into 1024 shards chains, which also means that the TPS of Ethereum will be increased by more than 1000 times.

But the Sharding scheme still has drawbacks in terms of cross-shard transactions, cheating identification, random assignment and election security and so on.

(Credits Hsiao-Wei Wang and the Ethereum Team)
  • L2 Scaling:
  1. State Channel:

Refers to the “off-chain” technology used to perform transactions and other status updates.

However, transactions occurring in a state channel still maintain high security and immutability. If any problem occurs, we can go back to the stable version determined in the on-chain transaction.


2. Sidechain Technology:

Sidechain basically means a system where a set of validators checkpoint the latest state of the chain to a smart contract. These checkpoints are then used by a bridge contract to allow users to deposit and withdraw. Sidechains usually use efficient consensus algorithms such as POA (Proof-of-Authority), and POS (Proof of Stake) consensus. Their advantage is that the code and data are independent of the main chain. In this case, it will not increase the computation requirement of the main chain. On the other hand, however, the disadvantage comes from its lack of security and centralization, and it cannot provide censorship resistance, finality and guarantees about owning funds.


3. Rollup:

As the term suggests, rollup means rolling a batch of transactions to one. All nodes that receive this transaction only verify the execution result, not the detailed transactions. Therefore, the gas fee required for Rollup transactions will be much lower than the total gas fee for them, and the TPS will increase.

Rollup technologies consist of basically two types:

3.1 ZkRollup: A scaling scheme based on zero-knowledge proofs, adopting validity proofs (VP). Validity Proofs reflect a more pessimistic view. Only transactions passed validity proofs will be accepted. ZkRollup performs off-chain complex computing and proof generation, and also it verifies proof and stores part of the data on-chain to ensure data availability.

3.2 Optimistic Rollup: The incentives for fraud proofs are designed for it. This means that it only provides proof when fraud happens. In other circumstances, it keeps optimistic to all the Rollup blocks on the chain.

Optimistic Rollup performs well in transporting the naive solidity contract in Layer1 to Layer2. Therefore, it improves developer’s experience to a large extent. The current mainstream schemes include Optimism and Arbitrum.


4. Plasma:

Plasma allows for the creation of child-chains attached to the main chain. This solution establishes the child-chains through smart contract and Merkel tree. Every child-chain is a customized smart contract. All the child-chains coexist and operate independently, so as to reduce the computation requirement on the main chain.

The results of the solution comparison are as follows:


Unless we’ve been hiding under a rock, there’s a very good chance we’ve heard of the latest excitement in Ethereum Layer 2 scaling — rollup. In the two mainstream rollup schemes, the core problem is how to verify the authenticity of rollup transactions.

Depending on the approach to validating state transitions, there are two types of Rollups: Optimistic Rollup and ZkRollups . The former optimistically believes in the authenticity of the transaction, while the latter pessimistically does not believe, so zero-knowledge proofs are generated to prove innocence.

  • Optimistic Rollup performs better in supporting EVM contracts, but has slightly low verification efficiency and some risks;
  • ZkRollup has the advantages of high decentralization, high validation efficiency. But generating zero-knowledge proofs and packaging are complex. Besides, it is difficult to be compatible with EVM and hence hard to be put into use.

Next let’s have a basic introduction about Optimistic Rollups: Optimism and Arbitrum.

III Optimism and Arbitrum

Optimism has the same basic process with Arbitrum as above. To put it simply: Optimism relies on EVM(Ethereum Virtal Machine) more than Arbitrum does. When someone submits a challenge about Optimism, problematic transactions run through the EVM again.

Arbitrum largely reduces the pressure on the chain by adopting off-chain dispute solutions. It features multi-round fraud proofs. You can dumb it down to doing a binary search between two parties to find the first opcode of a whole block that they disagree on. Once found only this particular opcode is executed on-chain.

Therefore, conceptually, Optimism’s approach is much simpler than Arbitrum. However, Arbitrum greatly reduces the verification pressure on the chain.

Arbitrum Architecture Summary

  • As Arbitrum (L2) exists as a scalability solution for Ethereum (L1), the Arbitrum architecture naturally exists in part on L1 and in part on L2.
  • The component of Arbitrum that exists on L1 is the EthBridge, which is a set of Ethereum contracts.
  • The EthBridge is responsible for refereeing the Arbitrum Rollup protocol, as well as maintaining the inbox and outbox of the chain.
  • The inbox and outbox of a chain is what allows users, L1 contracts, and full nodes to send their transactions to the chain as well as observing the outcome of those transactions.
  • The Arbitrum Virtual Machine is the gateway between L1 and L2, and the function provided by the EthBridge.
  • The AVM is what is capable of reading inputs, and executing computations on these inputs to produce outputs.
  • ArbOS is run on top of the Arbitrum Virtual Machine, and is responsible for ensuring the execution of smart contracts on the Arbitrum chain.
  • ArbOS exists completely on L2, and runs EVM contracts just like how they would be run on Ethereum.

Arbitrum’s dispute resolution process mainly depends on the off-chain multi-round dissection game. The algorithm forces the “asserter” and the “challenger” to narrow their differences by constantly dichotomizing the difference points, and finally solve the differences on Layer1. The specific solutions are as follows:


Optimization directly lets EVM execute the whole transaction, so it only needs one round of interaction. For this reason, Optimism features single round fraud proofs, while Arbitrum uses multi-round fraud proofs. The biggest difference between the two is that Arbitrum takes a long time to resolve disputes, so it takes a long time to confirm. Optimism needs to execute the whole transaction, and the gas fee is higher.

IV Eigen-Layer2 Rollup Privacy-preserving Computing Scheme

The results of privacy-preserving computing are optimistic. In privacy computing, a transaction is extremely complex, that is, it is very difficult for Layer1 to complete the transaction, so Arbitrum is the choice. This is why Eigen was developed based on Arbitrum.

Eigen Rollup is a hybrid Rollup scheme that is compatible with EVM and supports optimistic execution and verifiability statements.

  • Optimistic Execution: Similar to Branch Prediction conducted by CPU. The transaction is pre-executed, and the validator verifies the validity of the transaction; the disputed transaction is adjudicated through a challenge agreement;
  • Verifiable Claim: Adopting TEE signature and zero-knowledge proofs to provide non-interactive proof to correctness and integrity.

Eigen Network also provide following technologies based on Arbitrum:

  • Verifiable Proof:Eigen Rollup lies on the basis of interactive proof in Arbitrum. It adopts TEE to conduct crucial privacy instructions to reduce the consumption of interactive proof.
  • Fair Sequencer: Eigen places the sequencer inside EigenCC, where the execution environment is remotely attested. Reduce the transaction submission fee to Inbox. Reduce the malicious MEV.
  • EGVM: EGVM is the Eigen privacy-preserving smart contract virtual machine, supporting distributed and parallel task execution. It schedules distributed tasks to the EigenCC computing cluster for parallel computing and generates corresponding verifiable proof.

Eigen Network — the first generation of privacy-preserving computing network on Layer2.

Based on Layer2, Eigen Network is trying to achieve the expansion of computing power, revolutionize the current assets circulation relationship on the chain and redefine the data provider, user and algorithm provider.

Eigen is suitable for mainstream computing scenarios via confidential computing and federated learning. Based on the combination of hardware and software technologies, Eigen can balance performance, security, and reduce deployment and migration costs. Eigen is committed to building a new generation of private data flow network, providing cross-domain data security collaborative infrastructure, to help build a new era of digital economic ecology.

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