Blockchain
Decentralizing Ethereum layer-2 solutions has been an ongoing challenge for ecosystem participants, but Figment Capital believes distributed sequencer technology (DST) could put an end to this headache.
Sequencers are blockchain nodes managed by Layer-2 solutions to achieve consensus. They are a critical tool to help build and propose blocks, and significantly reduce costs for transactions on Ethereum.
In today’s ecosystem, Layer-2 solutions largely retain only one sequencer, which means it is subject to centralization risks.
If rollups end up being centralized systems built on top of a decentralized network, then it defeats the purpose of a decentralized system in the first place, Dougie DeLuca, an investor at Figment Capital, told Blockworks.
“We came up with a new idea for a potential sequencer design,” explains DeLuca. “What we’ve come up with is a new solution that can essentially serve as a stopgap until a more complex and maximally decentralized design is available to use.”
This design is very similar to distributed validator technology (DVT), where a validator’s responsibilities are divided among several operators or machines.
“Right now with validators you have one operator, one machine, and if a validator gets compromised or goes offline, they are subject to strict conditions – which basically means they are penalized for not doing the job they should do.,” DeLuca said.
With DVT, you can have one validator serviced by six different machines, DeLuca noted.
“What that accomplishes is fault tolerance, meaning if one subvalidator cluster goes offline, the other five will still work as intended, so as a result we get a more resilient network,” he said.
DVT also enables features such as geographic network distribution, making networks less susceptible to regulatory risk and network outages (such as Etheruem’s most recent outage).
Using DVT as a framework, DeLuca noted that he and other members of the Figment team had an idea to reuse it for sequencers.
“There are people using it today who can testify that it works, so instead of coming up with a brand new design that would take forever to implement, let’s come up with something that can be used in the medium term… so just like DVT, DST can be applied to a single sequencer and it can divide the responsibilities of running the sequencer among a cluster of machines and operators,” he said.
While Figment Capital will not be building out the technology itself, DeLuca shared that Obol Network is currently in talks with several rollup teams to explore the possibilities of this technology.