Sharding and Rollups are two main approaches to blockchain scalability. The core idea of Rollups is to shift computation off-chain while performing verification on-chain. Transactions across different Rollups are facilitated through a specific communication protocol. Although the Ethereum ecosystem views Rollups as a transitional or Layer 2 solution, Rollups have their irreplaceable value.
Different application types have varying price elasticity and security requirements. In a monolithic blockchain design, it’s challenging to satisfy diverse security needs and price elasticities. Simply increasing TPS (Transactions Per Second) or reducing transaction costs does not optimize resource allocation, as “accelerating one transaction inevitably slows down another,” reaching a Pareto efficiency.
Moreover, different transaction types have different price elasticity. For example, applications like CryptoPunks and Bored Ape Yacht Club have price elasticities akin to luxury goods, whereas social interaction and DAO-type applications are the opposite. This determines their sensitivity to Gas fees. Security-sensitive applications partially shifting to off-chain reveal varying security assumptions and consensus needs. For instance, applications like Ceramic base their security on the assumption that “users will not attack their data,” while Snapshot-style voting applications rely on the premise that “every relevant user can verify easily.” These applications save costs by moving data production off-chain but introduce additional attack vectors, such as data withholding attacks. Moreover, using this data on-chain introduces additional security assumptions. An alternative is using cheaper sidechains, but as their transaction volumes increase, so do the fees, leading to the abandonment of transactions in sensitive applications and necessitating additional cross-chain security assumptions.
Consider a design where Rollups on the same settlement layer have different security models and interact through a protocol, allowing Rollups to achieve adaptive security at the same cost. For example, users expect interactions on social networking applications to be free, requiring a “consensus” as light as possible. However, the social relationships generated by these networks have protocol value and are relied upon by many applications, demanding a “consensus” to be as secure as possible. To resolve this contradiction, we can design a “read-only” cross-Rollup protocol. If a relied-upon application is challenged and reduced, all applications that depend on it within two steps are similarly reduced. Thus, even if the social network is based on a permissioned blockchain, for security reasons, applications that depend on it will also verify it. The more widely used an application is, the higher its security, creating a transaction paradigm that adapts security without increasing user costs while ensuring on-chain data availability (on the same settlement layer).
This is the Ripple Protocol, which has adaptive price-security elasticity. Taking social networks as an example, user relationships are at the center of the Ripple, and following actions are entirely free. These relationships are utilized by outer-layer products, jointly ensuring the security of the social foundational data. Although it’s free, it maintains high security.
Additionally, to make the “read-only protocol” more flexible, applications should be allowed to dynamically add dependencies. This poses new design requirements for the settlement layer, in other words, introducing diversity in the settlement layer. This diversity will eventually be embedded into the underlying protocol, eliminating the need for support via smart contracts.