The Big Whale: To start simply, what is a Based Rollup?
Matthew Edelen: A Based Rollup is a layer 2 blockchain that uses Ethereum as the central coordinator, instead of having its own coordination system. To understand this, let's take an example: today, layer 2s like Arbitrum or Optimism operate independently, which creates fragmentation of activity and liquidity.
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Based Rollups offer a different approach: they let Ethereum organise the order of transactions for the entire ecosystem. It's as if all these blockchains become synchronised, giving users the impression of interacting with a single chain.
In practice, this changes everything. Developers can deploy their applications on any layer 2 without modification, and users no longer have to worry about bridges between different channels. It's much simpler and more efficient.
The fragmentation of liquidity and activities is presented as a major hindrance for Ethereum. Can you explain why?
This is indeed one of the main obstacles to increasing the value of ETH. There are several aspects to consider.
First, the fragmentation of liquidity leads to poorer execution conditions for trades, which directly penalises users and traders.
Then there is the issue of capital efficiency. When you have to transfer funds between different channels, you waste time and money in the bridging process. It's much less efficient than a single chain.
The third aspect, which is perhaps the most important for value growth, is the excessive complexity of the system. To really understand and use a Layer 2, you need to have practised it. And with so many different Layer 2s, many users end up saying, "It's too complicated, I'd rather use Solana ."
For developers too, it's a real headache. Imagine having to update an application or a token on several channels: you have to manage bridges, coordinate messages... It's very frustrating. The ideal would be to have an experience where everything happens as if on a single channel. And that's exactly what Based Rollups promise.
"Convincing layer 2s to adopt Based Rollups" What are the main obstacles to implementing Based Rollups?
There are several challenges. Firstly, you have to understand that current Layer 2s use centralised sequencers because this was the most pragmatic solution to limit the technical risks.
The main technical challenge today is to develop a real-time proof technology that enables synchronous composability. This is a crucial aspect but one that still has several unknowns.
We must also be careful not to rely too heavily on Layer 1 for sequencing. This is important to guarantee rapid pre-confirmations to users and to protect them in the event of bugs in the rollup.
But I'm optimistic because we've made huge technical progress in recent months, particularly on the practical implementation of Based Rollups.
Shouldn't the potential of Based Rollups to solve Ethereum's scalability problems have been identified earlier?
If we had to start all over again today, with our current knowledge, we would probably build every rollup as a Based Rollup. But at the time, the choice of centralised sequencers made sense: we needed to manage the complexity of Layer 1 Ethereum and offer fast confirmations.
The Layer 2 teams made this choice with full knowledge of the facts. Even though their rollups were less secure, it enabled them to gain the trust of users and build a solid foundation.
The good news is that today we have overcome these obstacles. Proof and Zero-Knowledge technologies allow us to form transaction blocks very quickly. This is what makes Based Rollups now feasible.
The Big Whale: The question of adoption by layer 2s seems crucial...
Absolutely. Beyond the technical challenges, convincing layer 2s to migrate to this technology is essential. Network effects are decisive in crypto. If some chains refuse to adopt Based Rollups, we risk further fragmentation of the ecosystem.
Take the example of Base : if they decide not to adopt this model while continuing to grow, this would create incompatibility with Based Rollups. And even with rapid interoperability between rollups, the fragmentation problem would persist.
So the challenge is more political than technical?
That's right. Our priority is to provide stakeholders with all the necessary guarantees in terms of value sharing and security. Coordination will take time, but I remain convinced that this is the direction to follow.
Chain abstraction, driven by players like Socket, is sometimes presented as a solution to the proliferation of layer 2s. What do you think about this?
There is a lot of confusion surrounding this term. Chain abstraction certainly improves the user experience, but not that of developers.
Moreover, it requires trust in a network of solvers to manage transactions. It's a fallback solution, but not viable in the long term.
Based Rollups are the solution to solve these problems, but a certain amount of mistrust persists in the Ethereum ecosystem because the technology is still poorly understood. The challenge is not so much its technical feasibility as the coordination of the players involved in its deployment. This apprehension can also be explained by our lack of hindsight: we have only eight years' experience of blockchain, compared with decades for the traditional technology industry.
"Anyone who takes the time to understand Based Rollups will eventually be convinced" Do you think Ethereum could be overtaken by new layer 1s like Sui, Aptos or Solana?
We have to be honest: yes, Ethereum could be dethroned. It would be naive to think otherwise, especially when we see the recent success of Solana.
However, Ethereum's network effect remains a major advantage. Whether it's development tools, the number of active developers, on-chain metrics or smart contracts, Ethereum leads on all fronts.
In this context, abandoning Ethereum for Solana would be premature, especially as we haven't yet explored all of Ethereum's potential for improvement.
Shouldn't the Ethereum roadmap have been defined differently?
It's important to understand that the roadmap isn't set in stone. It's an iterative process where we're constantly adapting to new information and emerging priorities.
Our immediate priority is to increase the gas limit on Ethereum's Layer 1 and optimise its execution, but only up to a certain point.
We'll reach that limit when the trade-offs become too great, particularly in terms of network robustness, node lightness and hardware costs. In the meantime, we can focus on simple optimisations, such as adjusting gas prices.
The aim is to keep applications on Layer 1 for around a year, while Based Rollups mature. At that point, Ethereum can naturally evolve towards a model favouring Based Rollups and native execution on Layer 2.
How to convince Uniswap to adopt Based Rollups when they are developing their own chain?
There are two main points to clarify. The first concerns the MEV (Maximum Extractable Value) , the revenue generated by transaction arbitrage. Uniswap now captures this value with its own network and redistributes part of it to users. But contrary to what some people think, adopting a Based Rollup does not mean losing this revenue.
In reality, capturing MEV is still entirely possible on a Based Rollup by adapting the sequencers. We explain this in our light paper on Spire.dev - it's a simple solution that Unichain could easily adopt.
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And the second point?
This is the question of performance. Uniswap highlights its "Flash blocks", which enable validation in 150 milliseconds. But a Based Rollup can offer similar performance, while providing additional benefits: access to Layer 1 liquidity, simplified user acquisition and greater flexibility for the future. In fact, our teams are already working on proofs of operations of less than 250 milliseconds on Ethereum Layer 1.
How are your discussions progressing with the various players in the ecosystem?
We are in constant contact with many teams. Our role at Spire Labs is not limited to developing the technology: we also work to create an environment conducive to its adoption.
The feedback has been mixed, but encouraging on the whole. As Justin Drake so aptly puts it, understanding Based Rollups naturally leads to buy-in.
Let's talk costs. What can we expect from Based Rollups in terms of fees?
Fees will be comparable to those of the current layer 2s. The major advantage of Based Rollups is their ability to significantly reduce the cost per transaction, especially when thousands of transactions are processed.
Once the system is deployed, users will pay just a few cents for their transactions on layer 1.
