From idea to reality: How does Espresso achieve L2 scaling through shared ordering?

Written by: Yinan

Project Introduction

Introduction:

• Espresso Systems began to want to build a highly scalable, privacy-focused decentralized L1 protocol. It was discovered that so much L1 is not needed, so the mission will be achieved later by building for the Ethereum ecosystem. Two separate efforts are underway to achieve this vision, addressing privacy and performance issues respectively.

• To provide better privacy options, Espresso developed the CAPE application, which is Espresso’s smart contract system that enables custom configuration of transaction-level privacy. CAPE can be deployed on any On the EVM chain.

• The sequencer is responsible for validating and batching transactions made on the layer 2 blockchain and then sending them back to the layer 1 chain (such as Ethereum) for settlement. Rollups don’t actually require a sequencer; it’s just a design choice to give users a better experience with lower fees and faster transaction confirmations.

• The main current issues with sequencers are that they tend to be prone to centralization (in many cases run by a single operator) and carry risks such as transaction censorship, MEV extraction and creation Single point of failure (i.e. validity issue).

• Solutions like Espresso’s Shared Sequencer (which relies on separate, permissionless network nodes) are designed to help solve this problem. Espresso is creating a shared-ordered marketplace through which layer 2 chains sell block space to shared proposers, including proposers on the Ethereum mainnet EVM itself, who create surplus by satisfying user intent on multiple chains value.

Technical Architecture

CAPE

CAPE is the implementation of Espresso Systems’ configurable asset privacy protocol on Ethereum. Configurable Asset Privacy is a protocol that enables asset creators to issue private digital assets while specifying the parties that can view specified data about ownership and transactions. CAPE also supports more advanced policies using private verifiable credentials, frozen keys, or threshold schemes.

VERI-ZEXE —-Decentralized Private Computing (DPC) System

In 2019, Bowe et al. proposed a scheme called Decentralized Private Computing (DPC), which allows users to perform arbitrary computations off-chain and submit transactions using zero-knowledge proofs to prove the correctness of that computation. They implemented a system called ZEXE (zk-execution), which instantiates the DPC solution to solve the above two pain points. Roughly speaking, ZEXE is a "programmable Zcash" that promotes from a single application system to a smart contract system while retaining privacy guarantees.

VERI-ZEXE improves the state-of-the-art by ~9.0x in trade generation and ~2.6x in memory usage, and will be used in future versions of CAPE to enable arbitrary user-defined asset strategies , while maintaining configurable asset privacy.

HotShot

HotShot is a consensus protocol that prioritizes high throughput and fast finalization, and is based on the HotStuff protocol.

HotShot is open and permissionless and will participate in the decentralization of the sequencer network, providing high throughput and fast final results while also guaranteeing security and effectiveness. HotShot uses a proof-of-stake (“PoS”) security model, and one of the key requirements for it by the Espresso team was to achieve strong performance without compromising the size of the validator set. Specifically, HotShot should at least be able to scale to include participation from all Ethereum validators (currently over 700,000).

Tiramisu

Tiramisu is a data availability solution with three novel layers; most rollups rely on L1 blockchains (such as Ethereum) to provide data, but there are shortcomings is very expensive.

• Tiramisu’s base layer is called Savoiardi. This is an anti-bribery layer (similar to Ethereum’s danksharding proposal) that provides the highest level of security. However, due to this feature, it is the least user-friendly of the three layers. To solve this problem, Espresso added two layers to its solution.
• Mascarpone is the middle layer that ensures efficient data recovery by electing a small data management committee.
• Cocoa is aptly named the “top sprinkler” of the entire system. Cocoa helps Tiramisu provide "Web2-level performance" by providing a content delivery network for Tiramisu. This facilitates efficient data recovery and significantly speeds up data dissemination. Given that this layer is centralized in nature, it is completely optional and Tiramisu works perfectly without it. It helps speed up data availability and can be easily changed or deleted.

Espresso Systems designed its protocols with flexibility and modularity in mind, and rollup devices using its sequencers can also use any other data availability solution if they don't want to use Tiramisu.

EspressoSequencer

is a system for decentralized transaction sequencing for layer 2 scaling solutions on Ethereum, a decentralized shared sequencing layer

Espresso Sequencer is designed around a single decentralized proof-of-stake security model that supports a consensus protocol for sequencing transactions and a data availability mechanism that enables further performance benefits. It also contains a rollup contract system that registers committed blocks of sequenced transactions, verifies their consistency with the consensus protocol and availability certificates, registers updated state commitments for each zk-VM deployed to the Espresso Sequencer, and receives and Verify evidence of status updates.

Espresso Sequencer supports L2 decentralization. It handles decentralized ordering and data availability of aggregation transactions, acting as middleware between aggregation and its underlying L1 platform. Espresso Sequencer is designed as a platform on which any zk-VM or optimistic VM can be deployed. Finally, Espresso can also act as an interop layer by replicating zk-VM and optimistic VM to multiple L1s simultaneously.

Development Process

2022/06/15 —- Espresso starts using CAPE on the Goerli testnet

2022/11/28 —- Espresso releases Espresso testnet 1---Americano, the first public release of Espresso Sequencer

2023/07/20 —- Espresso Systems and Polygon zkEVM Launch of shared Doppio testnet

2023/08/05 —- Espresso opened the Doppio testnet to the public and released a demonstration of the end-to-end integration of Espresso Sequencer with the Polygon zkEVM stack.

2023/09/29 —- Espresso Systems releases testnet 3---Cortado, seamlessly integrating OP Stack rollup and Polygon zkEVM rollup to achieve decentralized, shared sorting.

2024/01/26 —- Espresso Systems releases testnet 4---Gibraltar, demonstrating integration with the Arbitrum technology stack. and see for the first time an external operator running an Espresso Sequencer node.

(This testnet release also sees Espresso Sequencer support for four rollup stacks (Arbitrum, Cartesi, Optimism, and Polygon zkEVM) as well as multiple collaborations with the Rollup project.)

2024/02/03 —- Espresso is about to launch the fifth test network-Cappuccino, at which time more and more entities will be recruited to run Espresso Sequencer nodes to further decentralize the sequencer. It is planned to be released at the end of the first quarter of 2024.

2024/03/13 —- Espresso is creating a shared ordering market through which layer 2 chains sell block space to shared proposers, including the Ethereum mainnet EVM Proposers themselves, they create residual value by satisfying user intent across multiple chains.

2024/05/22 —- Espresso releases testnet 5---Cappuccino, Espresso has expanded the HotShot final layer to 100 nodes on the Cappuccino testnet. The testnet also adds support for Arbitrum fraud proofs.

Ecosystem

Project Partnership

2023/07/19 —-Espresso Systems and EigenLayer announce an ecosystem partnership to leverage Espresso Sequencer Re-staking on the network, through EigenLayer, Espresso Sequencer will have access to Ethereum’s staking capital base and decentralized validator set, optimizing node usage and increasing capital efficiency.

2023/07/20 —- Espresso Systems and Injective have cooperated. Injective has integrated Espresso Sequencer. This cooperation will start with Cascade, the first inter-chain of the IBC ecosystem. Solana SVM rolls up and demonstrates Injective's commitment to long-term decentralization and scalability. Cascade is currently on a public testnet, allowing developers to deploy Solana contracts for the first time on Injective and the broader IBC ecosystem.

2023/07/20 —- Espresso Systems and AltLayer introduce Espresso Sequencer to AltLayer Stack, providing developers with more accelerated decentralization through AltLayer’s decentralized verification and Espresso Sequencer s Choice. The two companies will explore integration between Rollups and Espresso Sequencers built using the AltLayer platform.

2023/07/20 —- Espresso Systems and Catalyst collaborate to improve interoperability, with Catalyst becoming the first application dedicated to the Espresso Sequencer ecosystem. Catalyst is a cross-chain AMM platform focused on connecting modular blockchains. Catalyst is committed to leveraging Espresso Sequencer, laying the foundation for secure, seamless cross-aggregation interoperability. Over the next few months, Catalyst plans to prioritize rollups using Espresso Sequencer.

2023/07/20 —- Espresso Systems has announced plans to integrate with Spire, a Layer 3 aggregation-as-a-service offering, publicly announcing plans to use Espresso Sequencer for sequencing and data availability.

2023/07/20 —- Espresso Systems launches a testnet integrated with the Polygon zkEVM stack. The testnet allows users to submit transactions to a branch of Polygon zkEVM, which then routes the transaction to the runtime Nodes of and ordered by the Espresso HotShot protocol.

2023/07/20 —- Espresso Systems and Caldera bring decentralized sequencing to OP Stack Espresso Systems and Caldera will deploy optimistic rollup, use Espresso Sequencer for ordering and fast confirmation, and use Espresso Data Availability (DA ) for storage. Caldera will provide the OP Rollup interface, site hosting, block explorer and indexer.

2023/12/21 —- Espresso Systems and Offchain Labs announced a partnership to bring decentralized versions of Timeboost transaction ordering and Espresso Sequencer to the Arbitrum ecosystem and beyond. Timeboost is a transaction ordering strategy originally developed by Offchain Labs to protect users from front-running and mitigate the harmful effects of Maximum Extractable Value (MEV).

2024/01/26 —- Espresso Systems has partnered with blockchain infrastructure provider Blockdaemon, which supports Espresso Systems by deploying external sequencer nodes. It will manage 4 sequencing nodes located in Europe and Asia.

Currently cooperating

2024/03/08 —- Espresso Systems and Across are cooperating. This cooperation will allow Across Protocol to utilize Espresso’s Fast pre-confirmation function, which is guaranteed by the HotShot consensus protocol, which reaches the final result after two consecutive blocks. The integration will leverage HotShot's shared security and fast finality to bridge between Rollups.

Project Team

Ben Fisch —- CEO and co-founder of Espresso Systems, is an assistant professor of computer science at Yale University, and previously, PhD student at Stanford University, working with Dan Boneh in the Applied Cryptography Research Group.

Charles Lu——- CEO and co-founder of Espresso Systems. He previously served as the head of Binance Labs at Binance. Charles Lu studied at Stanford University.

Benedikt Bünz —- Co-founder and Chief Scientist of Espresso Systems. is a PhD student in Dan Boneh's applied cryptography group at Stanford University. Mainly focused on the cryptography of cryptocurrencies.

Project Financing

Espresso has raised a total amount of US$60 million through seed round and Series B financing

• 3, 2022 On March 6, Espresso Systems has raised US$32 million in funding, led by Greylock Partners and Electric Capital, with participation from Sequoia Capital, Blockchain Capital and Slow Ventures. Espresso Systems also includes major industry players as backers, including Polychain Capital, Alameda Research, Coinbase Ventures, Gemini Frontier Fund, Paxos, and Terraform Labs.

• On March 21, 2024, Espresso Systems announced that it had completed a US$28 million Series B financing led by A16zcrypto. Espresso noted that Polygon, Taiko, o1Labs, StarkWare, Offchain Labs, and strategic investors from over 30 ecosystem projects joined their recent Series B round.

Project Summary

As an indispensable component of the blockchain network, transaction sorting has become the second layer (L2) field A growing problem. The solution to the problem is a shared, decentralized sorter. The shared sequencer essentially provides a decentralized service for rollups. In addition to solving issues such as censorship, MEV extraction, and validity, shared sequencers introduce the ability to cross rollups, opening up a variety of new possibilities.

As a middleware, Espresso mainly provides shared sorting services. Through the shared sorting market and powerful finality tools, Espresso brings new unity and efficiency to the Rollup and Ethereum ecosystems. Through fair economic incentives and sorted income distribution, Espresso not only solves the current problem of Rollup fragmentation, but also lays the foundation for future cross-chain operations and a broader ecosystem. In short, it needs to be paid attention to.

Related links:

Official website: https://www.espressosys.com/

Medium: https://medium.com/@espressosys

Twitter: https://twitter.com/EspressoSys

Docs: https://docs.espressosys.com/sequencer

Hackmd: https://hackmd.io/@EspressoSystems

Espresso testnet browser: https://be.cappuccino.testnet.espresso.network/

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