Puffer: A Pioneer in Creating Efficient Based Rollup Solutions

Core Idea: Puffer is leveraging Restaking technology to build a more efficient Based Rollup solution aimed at achieving decentralized ordering and releasing cross-chain liquidity interactions. Based Rollups will create a different landscape in the Ethereum ecosystem compared to mainstream Rollup solutions.

Puffer's main business includes:

• Puffer LRT: Ethereum Re-staking Service Based on Eigenlayer
• Puffer UniFi: A Based Rollup optimization solution introducing pre-confirmation technology
• Puffer UniFi AVS: Build a highly synchronized application chain ecosystem using UniFi AVS to reduce liquidity fragmentation.

Based Rollup differs from mainstream Rollup solutions in terms of decentralization, efficiency, and profit distribution to meet the needs of different application scenarios.

Overview of Rollup Technology

Rollup is a technology used to scale blockchains (such as Ethereum) that aims to increase transaction processing capacity and reduce costs. It processes a large number of transactions off-chain, transferring computational and storage work outside the mainnet while ensuring that the final results are verified on the mainnet, thereby ensuring data security and immutability.

Rollups are mainly divided into two categories:

1. Optimistic Rollup: Assumes transactions are correct by default and only verifies in case of disputes, which is faster but has a challenge period.
2. ZK Rollup: Uses zero-knowledge proofs to ensure transaction correctness, which is more secure but has high technical complexity.

The core idea of Rollup is "performing a large amount of work off-chain and verifying the results on-chain" to improve the processing speed of the blockchain and reduce costs.

Concept of Based Rollup

The Based Rollup was proposed by Ethereum Foundation researcher Justin Drake in March 2023, mainly targeting the critical role between L1 and L2 - the Sequencer. The Sequencer is responsible for sorting and bundling transactions from L2 to L1, but currently, most L2 solutions use centralized schemes. As the scale of funds increases and infrastructure matures, the issues with centralized Sequencers will become increasingly prominent.

Currently, there are two main solutions:

1. L2-based decentralized order book
2. Transfer to L1 Based Rollup

Based Rollup shifts the responsibility of transaction ordering from L2 to L1, with Ethereum L1 validators serving as block proposers responsible for transaction ordering. This design leverages existing Ethereum node resources, mitigating the risks associated with centralized orderers, but also faces challenges in performance being limited by the mainnet block time.

Puffer UniFi Optimization Plan

Puffer UniFi introduces a "pre-confirmation" mechanism to break through performance limitations:

1. Ethereum validators provide guarantees: Before block packaging, validators commit to the Rollup transactions pending confirmation.
2. Penalty mechanism: Validators who fail to fulfill their pre-confirmation commitments will face penalties.

UniFi bypasses the issue of Based Rollup being constrained by the mainnet block time through pre-confirmation, allowing Ethereum mainnet nodes to take on additional work to ensure transaction confirmation efficiency (approximately 100ms).

Pre-confirmation addresses the issue of fast transaction confirmation, while batch transaction packaging still needs to be completed through Layer 2 or off-chain, and then sent to the mainnet for confirmation by the sorter.

Puffer UniFi AVS

UniFi AVS is a solution based on Eigenlayer that utilizes Ethereum's "Restaking" technology. Any validator that re-stakes on Eigenlayer can participate in the pre-confirmation services provided by UniFi AVS and design corresponding penalty mechanisms in AVS.

Restaking and AVS make pre-confirmation smoother, and it is currently one of the most suitable and practically valuable AVS solutions, providing important support for the Based Rollup scheme.

Core Values

The application chain built using UniFi AVS will become an upgrade solution for Based Rollup, with the following advantages:

• Decentralized sorting based on L1
• Integrated pre-confirmation technology enhances transaction confirmation speed
• Create earnings for Restaking
• Achieve synchronous composability

The synchronous composability feature of UniFi helps to solve the fragmentation problem. Since UniFi is based on L1 decentralized ordering, Ethereum mainnet nodes act as the "global sequencer", allowing different Rollups to interact within the same block without the need for cross-chain bridges. This provides users with a smooth experience similar to a single chain, effectively reducing liquidity fragmentation issues.

Summary

The development of UniFi depends on whether Based Rollup becomes a necessary Rollup solution. Although current L2 solutions are more centralized than users perceive, this issue does not directly affect user interests in the short term.

In the long term, it is necessary to discuss decentralized sorters and consider the fragmentation issues of liquidity and user experience. Base Rollup is more like an "affiliated" Rollup of the Ethereum mainnet, directly managed by Ethereum for scheduling and communication, following a fair system. In contrast, mainstream Optimistic Rollups are more like feudal lords' autonomy, requiring an additional "chain abstraction" department for scheduling.

The point of contention between these two solutions is whether Rollup should return value to Ethereum or operate autonomously. Being close to Ethereum means higher security and natural composability, while autonomy allows operators to capture more benefits but requires more investment to build decentralized security.

The inclusiveness and freedom of blockchain determine that these two solutions will coexist, reflecting the trade-offs in decentralization, efficiency, and benefit distribution. This exploration will continue, and through constant technological adjustments, developers hope to create a new future.