The latest research from Binance offers a deep dive into the rising popularity of “Rollups-as-a-Service” as some of the most dominant Layer-2 scaling solutions for the Ethereum network.
While there are other scaling solutions for Ethereum, such as plasma and sidechains like Polygon, rollups have become the go-to option for hundreds of decentralized application developers, and RaaS is rapidly accelerating this trend.
The development of rollups came as a solution to Ethereum’s scaling problems. The technology was first implemented by dedicated L2s such as Arbitrum’s Orbit chains, zkSync’s Hyperchains, and Optimism’s OP Stack chains. However, Ethereum’s ecosystem has grown to such an extent that now, even those solutions are feeling the strain as dApps compete with one another for bandwidth. As a result, many developers are now looking at RaaS providers that allow them to create and maintain their very own rollups, dedicated to their dApps.
The RaaS Advantage
Binance’s report noted there are several advantages to RaaS-based rollups that are driving their rapid adoption. One of the main ones is that, by deploying their own roll-up, developers gain significantly more flexibility and control over how their dApps work and process transactions.
This is because RaaS rollups are not bound by the strict rules governing Ethereum or L2s such as Arbitrum. They still inherit the security of the settlement layer, but they do not have to burden themselves with the time-consuming and expensive process of bootstrapping a validator network. Moreover, a dedicated roll-up means the dApp does not have to compete for limited blockspace, as is the case with deploying on a shared L1 or L2.
“This provides the dApp with its own isolated fee market, which then creates a better user experience as users do not have to battle spiking transaction prices resulting from completely unrelated dApps,” Binance’s report noted.
RaaS also provides economic benefits to dApps. The way rollup transactions work is that users pay fees for the rollup to sequence and submit their transactions to the L1 at regular intervals. The rollup can use some of these fees to pay the L1’s fees and keep the rest as profit. Yet because transactions are bundled, the fees are still very low for users. So the dApp can generate revenue from its rollup, and use this to power its economic model – something that isn’t possible if the dApp is deployed directly onto the L1 or L2.
Who Are The Major RaaS Players?
The RaaS industry is a small but rapidly growing sub-sector within the crypto space, but Binance highlighted a number of projects that have already emerged as leading pioneers.
One of the top RaaS providers is Lumoz, which was formerly known as Opside and has been in testament since May, with a mainnet launch slated for early 2024. Lumoz is a zkRaaS platform that offers an innovative hybrid consensus mechanism that merges the proof-of-stake and proof-of-work algorithms. One of its main highlights is that it supports multiple zkEVM solutions and offers a number of data availability layers, meaning developers have a lot of flexibility when customizing their rollups for their dApps.
Users can deploy many different kinds of Lumoz zk-rollups from the LaunchBase platform and choose from various settlement layers, including Ethereum, BNB Chain, Polygon, and the Lumoz blockchain. They then select the type of zkEVM they want to use, with choices including Polygon zkEVM, zkSync, Scroll, and StarkNet. Other options include using ETH to pay gas fees or another token, including their own dApps’ native token. The data availability layers range from Ethereum to Celestia to EigenDA and more.
One of the clever aspects of Lumoz is its utilization of miners to generate zk-proofs on behalf of its rollups. The zk-rollups require zk-proofs in order to prove the validity of each transaction, and this is what the miners generate. Its mining network removes the need for developers to provide these hardware resources themselves. Lumoz’s services also extend to features such as block explorers, wallets, DEXs, and oracles, as well as a decentralized identity system for dApp users.
AltLayer is another major player in the space, with a RaaS protocol that developers can use to launch either optimistic or zk-rollups. The AltLayer solution comes with three core components including a no-code dashboard for simplified deployment of rollups with no coding required, and customization options at the network and chain level. Alternatively, developers can use AltLayer’s Rollup SDK to integrate its services directly into their own for greater customization.
The third component is AltLayer’s Beacon Layer, which is an intermediate layer between the transaction execution and data availability layers. It facilitates multiple services, including transaction sequencers, verification, staking/slashing, an interoperability layer, and more. Because every AltLayer rollup has a bridge to the Beacon Layer, it can also act as a bridging hub for asset transfers across rollups. This means developers have the possibility of tighter integration with other dApps using AltLayer’s rollups
Perhaps the main distinction of AltLayer is its novel Flash Layers, also known as ephemeral rollups. With this, developers have the option to automatically create a disposable, temporary application-specific rollup at times of high demand, before switching it off when network congestion subsides. These can be extremely useful for high-traffic events such as NFT mints, mini-games, and event ticket sales, when demand can spike enormously disrupt transactions, and send fees skyrocketing.
The Best of the Rest
Other major RaaS players include Gelato, which may be a familiar name to some as it is one of the leading Web3 infrastructure and tooling providers. It offers a zkRaaS solution for rollups based on the Polygon Chain Development Kit and recently launched its first client, the Astar zkEVM. One of the advantages of using Gelato’s RaaS offering is that it provides seamless access to its complementary infrastructure offerings, including native account abstraction, smart contract automation, and Web3 functions.
Caldera is a RaaS provider focused on delivering optimistic rollups, offering comprehensive features including block explorers, bridges, and faucets, along with gas token customization, with developers able to completely eliminate gas fees for users, if they desire. For developers, the advantages of Caldera include its extensive support for developer tools, such as Biconomy (account abstraction) and Gnosis Safe (asset custody), as well as Whitelabel Docs, where roll-up teams can create their own documentation that includes guidelines, description, and FAQs. It also boasts a unique partnership with Hyperlane, enabling permissionless interoperability between EVM-compatible chains, and tools for creating, using, and trading NFTs directly on the rollups, which may make it an especially interesting choice for NFT creators.
Also deserving a mention is Conduit, another solution for creating customized optimistic rollups that currently support the OP Stack, Arbitrum Orbit, and others. Conduit boasts that its offering enables developers to create and maintain an L2 rollup in as little as two minutes, complete with blockchain explorer, logs, transaction tracer, auto-scalable RPCs, chain monitoring, and other services. It also ensures that each L2 is automatically updated with the latest version of the OP Stack codebase, and allows each rollup to earn a share of the sequencer fees and MEV.
Conduit stands out for its Elector consensus layer which helps to reduce sequencer downtime for its rollups by more than 50%. This is necessary because the standard OP Stack configuration only supports one sequencer, and this can cause downtime in the event of software updates and hardware failures, resulting in transaction delays. Conduit eliminates this problem as the Elector functions as an automated election protocol running on top of the OP Stack, supporting three separate sequencers and enabling it to claim 99.95% uptime for every rollup.
Conclusion: RaaS Is Raring To Go
The technology has emerged as a beacon of hope with its promise of finally delivering a sustainable solution to blockchain scalability. However, until recently, its adoption has always been hindered by complexity. As RaaS reaches maturity, zk rollups have become much more accessible to thousands of dApp developers, enabling them to quickly craft a customized scaling solution without the burden of hardware maintenance.
The birth of the RaaS industry is therefore a pivotal moment for blockchain, radically simplifying the most promising scaling solution and making it available to more than just experts. Developers have shown they’re only too willing to embrace this user-friendly approach, bringing us closer to a future where blockchain can finally achieve its transformative potential.
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