Summary of the 7th ALT VIEW: Why rollups have exploded in popularity

6 min readMar 13, 2023

Speakers

AMA

A: What brought you to the crypto sphere? What excites you at Messari?

S: I’m in crypto for about three years. I started out as a technical writer. In about 2019 I became aware of public blockchains and Ethereum and fell in love. About two years ago I joined Messari as an intern. It was a contract internship. I wanted to get a better understanding of both the economic side of crypto and the technology. And about six months ago I finally turned to being public facing on the team. One of my interests is scalability within the infrastructure section. I’m really curious about how blockchains work and how we can scale to reach as many users as possible.

A: Do you look on the app side as well or mostly at the infrastructure level?

S: I cover an app side frequently, but mostly infrastructure for the time being.

A: What rollups are and what makes them interesting?

S: Rollups are a scalability solution, where we’re scaling vertically. It is like you’re ripping apart one piece of the blockchain stack, on which you’re focusing on. It is optimizing your resources and you don’t need to have a validator set to process transactions. You have something called sequencers, that at the end are compressing those transactions into a smaller piece of data and report it back to the underlying layer. So there is less competition both for block space on L1 and L2.

A: It is like you have an external network which is composed of sequencers that basically process your transactions. And for this you have the underlying chain that secures those transactions. So you’re moving off the traffic from L1 to the L2 side.

A: Would you consider external DA’s as a rollup?

S: Yes, absolutely. Rollups can be in any ecosystem.

A: Do you think you could design a better L1 that could compete with rollups for scalability?

S: I believe that there’s space for all. For now rollups are our best shot at scalability for most networks/use cases. I don’t see it as a war and we’re going to find ways to communicate between L1’s and rollups.

A: Do you feel like in the next five years there’d be enough demand for all the block space that being created through different L1s, L2s or L3s?

S: Demand comes with market cycles. I really do believe that the ethos of crypto to decentralize everything for all people is a powerful narrative and I don’t think it will disappear. The most interesting about rollups is that it doesn’t need to be a shared execution of our environment. You’re not necessarily looking for demand, you already creating something that will service the demand.

A: What is the difference and similar between app specific rollups and an app chain?

S: Similar: they’re app specific, for a particular application. An app chain is a full blockchain, handling all parts of the stack, all layers. An app specific rollup is an execution rollup that is connected to an ecosystem.

The pros of both is that you are not worrying about sharing block space with other types of applications because they’re app specific.

The cons: for an app chain you have to find validators and it’s a little less customizable than a rollup.

They both serve specific needs but the reason why rollups are the most versatile are because you can do so much more with them.

A: What do you think about having a shared security model coming to app chain from some Basechain?

S: I think that shared sequencers is really interesting. But for me it doesn’t really make sense to have the shared security, because traditional bridges could also run into problems.

A: How do you think if app chains that came up with SDKs were not able to deliver a fast and good developer experience? How can app specific rollups be better than app chain SDKs?

S: There would be more complexities. It wouldn’t provide us value and composability. App rollups are made easier with less number of pieces to consider as part of the stack.

A: What sort of applications and use cases do you think would benefit from launching an app specific rollup from the get-go? In what use cases it’s just a bad idea?

S: I think something like a gaming rollup/app, especially with a lot of micro transactions. Also, Altlayer as an elastic rollup.

What about downsides, the first thing that comes to mind is a DX that is not on a settlement layer and doesn’t share sequencers, because of small potential for liquidity fragmentation. You’ll have to solve the fragmentation problem before you go on to DeFi use cases as an app specific rollup.

A: Do you feel like some of the biggest application of Ethereum will move towards app rollups or have such specifications in the future?

S: We’ve already seen apps in the last couple years that are considering the scaling, reaching more users and dealing with congestion issues of Ethereum. Now a ton of applications launching on a bunch of different chains. But I think once it gets easier to deploy rollups we will see a lot more experimentation.

A: Do you think that until apps have a decentralized sequencing (tokens) it will be hard for them to find a real utility? Or you feel that will work out?

S: I don’t think so. With rollups you have the flexibility so you don’t need to have validator set and staking mechanism. That doesn’t mean that you lose the use case or the value generation mechanisms of the token. I think that it frees up the possibilities for different use cases.

A: How do you assess the feasibility of a Unichain whether it was an app chain or an app specific rollup?

S: I think it is certainly feasible and the shared sequencer set for something like an app specific rollup would be really important there. But I think the value of something like a Unichain would be mostly in the fees and savings for users. Also the MEV can be more controlled and beneficial for the protocol and its users. If it were to happen there would certainly be technical hurdles but I’m excited to see where experimentation leads.

A: Which one of these is more likely from your perspective: a Unichain rollup or a sector specific rollup?

S: I think it’s all going to come down to experimentation because most of these things are feasible.

A: Give us examples of Sovereign rollups and the apps specific rollups that are live today.

S: Also there is one more type of rollups — settlement rollups. Examples of it: Dimension, Eclipse (building SDKs and others no code roll up deployment solutions).

App specific rollup: dydx (relies on centralized infrastructure).

Sovereign rollup: Celestia (handles both execution and settlements; application define all of the parameters and going right directly to the consensus and data availability layer).

A: What’s the rollup as a service?

S: Rollup service provides environment for building SDKs, interfaces, dashboards, no-code rollups.

A: Who are we targeting today with no code frameworks?

S: Community that might not be even technically focused and DAOs. It is easier and more accessible for communities and not just developers to use these no code rollups interfaces.

A: Do you think there will be enough market for RaaS providers? What could be their reason of failure?

S: I think there’s two modes of failure: the monetary side and decentralization ethos. Monetary: if too many RaaS providers are focusing on the same ecosystem and if they do not differ from each other. Decentralisation: refuse to use the decentralizing sequencer and going to keep a centralized implementation.

A: Is there anything that you feel very strongly about but everyone disagrees with you?

S: I think that the ecosystem is polarized. So all the people are on different „camps”. I don’t think that one ecosystem/scaling solution is going to win. I do truly support a lot of different ideas and I’m just purely curious about seeing cool ideas connected with decentralization and mass adoption.

Thank you for your time!