Understanding Blockchain “Sequencers” and Their Role in Ethereum’s Infrastructure
The crypto industry is currently experiencing a downturn, with the price of bitcoin falling by 11% in the past month. However, this hasn’t deterred technologists from vying for a competitive edge in the future. MakerDAO’s founder, Rune Christensen, recently expressed openness to exploring alternative blockchain technologies like Solana or Cosmos, signaling a potential shift away from Ethereum. Additionally, there has been a debate surrounding the establishment of an Ethereum “Supreme Court” to resolve disputes within the ecosystem.
In this week’s feature, we delve into the concept of blockchain “sequencers,” which play a crucial role in the rapidly expanding infrastructure of layer-2 networks built on Ethereum. These sequencers have garnered attention due to concerns that they may introduce centralization into decentralized systems. Our expert, Sam Kessler, provides a comprehensive explanation of this topic.
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News from the Network
SOLANA SEDUCTION: MakerDAO, a prominent decentralized finance protocol on Ethereum, is considering migrating to its own dedicated blockchain rather than creating a layer-2 network within Ethereum. Rune Christensen, the founder of MakerDAO, believes that Solana possesses the most promising codebase and technical quality. He also mentions Cosmos as another potential contender. Ethereum co-founder Vitalik Buterin expressed concerns about MakerDAO’s direction and reportedly sold some of his MKR tokens. Visa’s recent announcement of expanding its stablecoin settlement capabilities to Solana further adds to the interest in the blockchain.
CODE VS. HUMANS: The blockchain community often emphasizes the principle that “code is law,” implying that the underlying code of a network should be the ultimate authority in settling disputes. However, Alex Gluchowski, the CEO of Matter Labs, a top layer-2 network on Ethereum, has proposed the idea of an “Ethereum Supreme Court” to handle severe crises that may threaten the integrity of the blockchain. Gluchowski suggests a hierarchical system of on-chain courts that would allow dApps to appeal for a chain “fork” if they face security breaches. This concept challenges the notion of pure code-based governance.
BASE’S NEW FANBASE: Aerodrome Finance, a liquidity engine and hub within the Base ecosystem, has quickly gained popularity, attracting over $170 million in total value locked (TVL). Its native token, $AERO, offers high liquidity mining rewards, with an annualized yield close to 1,000%. However, sustainability remains a question. Despite a recent major outage, Base’s TVL has surpassed that of Velodrome, its predecessor project on the Optimism layer-2 chain. The emergence of new projects like Aerodrome highlights the dynamic nature of the crypto ecosystem.
Hot Take: The Evolution and Challenges of Blockchain Technology
The blockchain industry continues to evolve, with technologists exploring new possibilities and grappling with governance and infrastructure concerns. While the concept of blockchain “sequencers” adds efficiency to layer-2 networks, questions surrounding centralization persist. The proposals for an Ethereum Supreme Court and the migration of protocols like MakerDAO highlight the need for careful consideration of the technological and governance aspects of blockchain systems.
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