Native rollups take center stage for Ethereum and L2 teams.

Executives from leading Ethereum L2s have expressed their commitment to advancing the Ethereum ecosystem by adopting “based” and “native” rollups, which promise to bolster security and reduce network fragmentation.

During a Jan. 25 call with Ethereum founders and developers, Jesse Pollak, the head of Ethereum L2 Base, highlighted the potential of based rollups. He described them as “a flexible and powerful tool that can help Base become more closely integrated with Ethereum while providing stronger security guarantees.” 

Ben Jones, Director of the Optimism Foundation, echoed these sentiments, emphasizing the benefits of enhancing collaboration between Ethereum’s base layer and L2s. “I want to just reemphasize, we are here to support this—it is war time,” he remarked, underlining the urgency and dedication to these advancements.

Ethereum L2 networks like Arbitrum, Optimism, and Base have generated significant revenue from centralized sequencers—systems that determine the order of transactions added to a blockchain. 

For example, Arbitrum has earned $210 million in revenue, while Base has brought in $96.2 million, according to Dune Analytics. However, this centralized approach to sequencing has led to fragmentation across the network.

Based rollups, first proposed by Ethereum core developer Justin Drake in March 2023, aim to address this issue by decentralizing the sequencing process. Unlike the current model, where a single centralized sequencer processes transactions, based rollups return block-building responsibilities to Ethereum’s validators. 

This shift would significantly improve the network’s decentralization and security. Furthermore, native rollups, another complementary innovation, focus on improving how transactions are executed on the base layer, enhancing the network’s composability and efficiency.

The transition to based rollups involves notable trade-offs. By decentralizing sequencing, L2s would relinquish a significant portion of their revenue derived from Maximum Extractable Value (MEV)—a lucrative practice where block producers earn additional profits by rearranging, including, or excluding transactions. For instance, transitioning to based rollups could impact Arbitrum and Base’s profitability but would direct more revenue back to Ethereum’s base layer, potentially strengthening Ether's (ETH) value. Another consideration is transaction confirmation times. 

While many current L2s offer near-instant transaction finality of around one second, decentralized sequencing on Ethereum’s base layer would increase this to approximately 12 seconds. Despite this, the improved security and decentralization offered by based rollups may outweigh the slower confirmation times for many stakeholders.

Several Ethereum L2s are also advocating for the adoption of FABRIC, a new infrastructure designed to support based rollups. Daniel Wang, CEO of Ethereum L2 Taiko, has expressed strong support for the initiative, stating, “We’ve been waiting for the FABRIC standards so we can work together and provide a full solution to Ethereum’s interoperability challenges.” 

Wang further emphasized that adopting these standards could “conquer” the fragmentation issues plaguing the Ethereum ecosystem. Notably, Taiko was the first L2 to implement based rollups, a milestone highlighted by Drake in June 2023. This early adoption underscores Taiko's commitment to leading the charge in improving Ethereum's scalability and interoperability.

By embracing based and native rollups alongside FABRIC, Ethereum L2s are demonstrating a willingness to prioritize the network's long-term health and unification over short-term financial gains. These advancements have the potential to make Ethereum more secure, decentralized, and cohesive, ensuring it remains a dominant force in the blockchain space.