Sequencers control transaction ordering. In an AA wallet, the UserOperation is a meta-transaction that a Bundler submits to a sequencer. The sequencer decides its inclusion and position in the block, enabling transaction-level censorship.
layer-2-wars-arbitrum-optimism-base-and-beyond
Blog
L2 Sequencers as Censorship Points in AA Transactions
Account Abstraction (AA) promises user sovereignty, but centralized sequencers on Arbitrum, Optimism, and Base create a critical censorship backdoor. This analysis breaks down the technical reality, the economic incentives for filtering transactions, and why decentralization is the only fix.
introduction
THE CENSORSHIP VECTOR
Introduction
Account Abstraction centralizes transaction censorship power in L2 sequencers, creating a systemic risk for user sovereignty.
This is distinct from L1 censorship. On Ethereum, validators can censor blocks, but users have direct mempool access. AA on L2s inserts a permissioned bundler layer (e.g., Stackup, Pimlico) that must be trusted not to filter UserOperations before the sequencer sees them.
The risk is protocol-specific. A sequencer like Arbitrum's single operator has absolute power. A decentralized sequencer set, as proposed by Espresso Systems or implemented in Fuel, distributes but does not eliminate this risk.
Evidence: Over 90% of AA bundles on networks like Arbitrum flow through a handful of centralized RPC endpoints operated by the same entities that run the dominant bundlers, creating a chokepoint.
key-insights
CENSORSHIP VECTORS
Executive Summary
Account Abstraction's promise of user-centric UX is undermined by centralized L2 sequencers, creating new single points of failure for transaction censorship.
01
The Centralized Bottleneck
Most major L2s (Arbitrum, Optimism, Base) rely on a single, permissioned sequencer. This entity has unilateral power to reorder, delay, or exclude any transaction, including AA user operations. This directly contradicts the censorship-resistant ethos of Ethereum.
- Single Point of Failure: A single corporate or foundation entity controls transaction inclusion.
- Opaque Logic: No visibility into MEV extraction or filtering rules applied pre-batch.
1
Active Sequencer
~12s
Forced Delay
02
The Bundler Dilemma
In ERC-4337, the bundler is the first-mile relayer. If the dominant L2 sequencer censors a bundler's batch, the entire AA transaction fails. This creates a protocol-level dependency where decentralization at the bundler layer is irrelevant if the sequencer is centralized.
- Upstream Dependency: Decentralized bundler networks (e.g., Stackup, Pimlico) are bottlenecked by the L2 sequencer.
- Economic Attack: Sequencer can economically censor by imposing prohibitive fees on specific bundlers or user operations.
100%
Batch Control
$0
Censor Cost
03
Solution: Force Inclusion & Shared Sequencing
The mitigation path requires protocol-level changes. Force Inclusion mechanisms (via L1) allow bypassing a censoring sequencer, while Shared Sequencing networks (like Espresso, Astria) decouple sequencing from execution, creating a competitive market.
- Force Inclusion: Direct L1 submission as a last resort, albeit expensive and slow.
- Shared Sequencers: A decentralized layer for ordering, enabling rollups to inherit L1 security guarantees for censorship resistance.
~3 min
Fallback Time
N/A
Current Adoption
thesis-statement
THE CENSORSHIP VECTOR
The Core Argument: AA Exchanges One Master for Another
Account Abstraction shifts censorship risk from validators to a new, more centralized actor: the L2 sequencer.
AA's censorship vector shifts. While EOA transactions face potential validator-level censorship, AA's user operation bundling creates a new single point of failure. The bundler or sequencer becomes the mandatory, privileged gateway for transaction execution.
Sequencers are centralized bottlenecks. The dominant L2s—Arbitrum, Optimism, Base—operate single, permissioned sequencers. This architecture grants them the technical capability to censor any user operation by excluding it from a batch, a power more direct than Ethereum's probabilistic block building.
This is a trade-off, not a solution. AA improves UX but concentrates trust in L2 operators. The censorship resistance of the base layer is neutered if the sequencer, a centralized service, filters transactions before they ever reach L1.
Evidence: During peak congestion, sequencer transaction ordering becomes a market. Projects like Flashbots' SUAVE aim to democratize this, but today's reality is a single sequencer queue controlled by the L2 team or a trusted partner.
SEQUENCER CENSORSHIP IN AA
The Centralization Matrix: Who Controls Your L2's Inbox?
Compares censorship resistance of Account Abstraction (AA) transaction flows across dominant L2 sequencer models.
| Censorship Vector | Single Sequencer (OP Stack, Arbitrum) | Decentralized Sequencer Set (Espresso, Astria) | Permissionless Sequencing (Espresso, Radius) |
|---|---|---|---|
Force-Inclusion Latency | 1-7 Days (via L1) | < 1 Hour (via Set) | < 1 Block (via mempool) |
User-Initiated Force-Inclusion | |||
Sequencer Can Frontrun UserOps | |||
Sequencer Can Reorder for MEV | |||
Sequencer Can Drop TX (Denial of Service) | |||
Requires Trusted Assumptions | Honest Majority of L1 Validators | Honest Majority of Sequencer Set | Cryptoeconomic Security (PoS) |
Primary Risk | Liveness Failure | Cartel Formation | Economic Attack Cost |
Example Implementations | Arbitrum, Optimism, Base | Shared Sequencer Testnets | Espresso (config), Radius |
deep-dive
THE BOTTLENECK
The Mechanics of Sequencer Censorship
Account Abstraction centralizes censorship power in the L2 sequencer, creating a single point of failure for transaction ordering and inclusion.
Sequencer is the gatekeeper. In an AA system, the user's transaction flow terminates at the L2 sequencer, not the base layer. The sequencer decides which user operations to include, in what order, and at what price, granting it unilateral censorship power over the entire L2.
Bundlers have no recourse. While EIP-4337's design includes alternative bundlers, they are economically non-viable for censorship resistance. A censoring sequencer will not include a censored transaction in a block, making a competing bundler's alternative bundle invalid and forcing it to pay gas for a failed on-chain submission.
MEV intensifies the risk. Sequencers maximize profit by extracting MEV through transaction reordering. This creates a direct financial incentive to censor or delay transactions that conflict with the sequencer's own arbitrage or liquidation strategies, a conflict of interest not present in decentralized base layers.
Evidence: The Flashbots SUAVE initiative explicitly acknowledges this problem, aiming to decentralize block building to prevent such centralized MEV extraction and censorship, which is now migrating from Ethereum to L2s like Arbitrum and Optimism.
risk-analysis
L2 SEQUENCER CENSORSHIP
The Slippery Slope: From Convenience to Control
Account Abstraction's user-centric promise is undermined when L2 sequencers can arbitrarily filter, reorder, or block transactions, creating a new centralization vector.
01
The Problem: The MEV-Censorship Nexus
Sequencers are profit-maximizing entities. They can censor by excluding transactions from blocks or reordering them for maximal extractable value (MEV). This directly conflicts with AA's goal of permissionless access.
- Real-Time Filtering: Blocks can be built without OFAC-sanctioned addresses.
- Ordering Arbitrage: User's bundled AA ops can be reordered to extract value, breaking atomicity.
- Opaque Logic: Censorship is often a black box, decided by sequencer operators like Arbitrum Nova or Optimism.
>99%
Block Share
Single
Point of Failure
02
The Solution: Force Inclusion & Permissionless Auctions
Protocol-level mandates that force sequencers to include valid transactions after a timeout, coupled with open auction mechanisms.
- Ethereum's 1559-like Slots: A permissionless queue where anyone can pay to force-include a tx, bypassing the sequencer.
- Shared Sequencer Networks: Projects like Astria and Espresso decentralize sequencing power across multiple actors.
- Economic Disincentives: Heavy slashing for provable censorship, moving beyond social consensus.
~12s
Force Delay
Multi-Entity
Sequencer Set
03
The Fallback: Direct L1 Settlement
The nuclear option: bypass the L2 sequencer entirely by submitting the AA transaction bundle directly to Ethereum L1. This is the ultimate censorship resistance guarantee but negates L2 benefits.
- Prohibitive Cost: Paying ~$50+ in L1 gas for a simple swap defeats AA's purpose.
- Architectural Necessity: AA smart accounts (ERC-4337) must have this path codified.
- User Experience Catastrophe: The UX falls back to primitive EOAs, losing all AA conveniences.
100x
Cost Increase
Final
Guarantee
04
The Entity: Arbitrum & Optimism's Centralized Sequencer
Today's dominant L2s operate a single, permissioned sequencer. While they pledge to not censor, the technical capability and legal pressure point exist.
- Sole Block Producer: Offchain Labs (Arbitrum) and OP Labs (Optimism) have full control over transaction inclusion/order.
- Legal Attack Surface: A single corporate entity can be compelled to comply with regulations.
- Roadmap Promises: Both point to decentralization via sequencer decentralization and proof-of-stake models, but execution is slow.
$20B+
Combined TVL
1
Active Sequencer
05
The Alternative: Intent-Based Architectures
Shift from transactional (submit this) to declarative (achieve this) models. Users express outcomes, and a decentralized solver network competes to fulfill them, inherently bypassing a single sequencer.
- Solver Competition: Networks like UniswapX and CowSwap create a market for fulfillment, reducing reliance on one L2's sequencer.
- Cross-Chain Native: Intents can be fulfilled across domains via bridges like Across and LayerZero, fragmenting censorship power.
- Sequencer as Commodity: The L2 sequencer becomes just one potential route, not a gatekeeper.
Multi-Chain
Fulfillment
Auction-Based
Execution
06
The Metric: Time-to-Censor (TtC)
The critical measure for AA resilience: the time delay between a user submitting a transaction and it becoming uncensorable. A short TtC is essential.
- Inclusion Delay: How long can a sequencer legally delay a tx before force-inclusion? 12 seconds is a target.
- Finality Speed: How fast does the L2 reach full Ethereum-level finality? Optimistic Rollups have a ~7-day window; ZK Rollups are faster.
- User Awareness: Wallets need to surface TtC and censorship risk, allowing users to choose chains and pay for urgency.
~7 days
ORU Window
<10 min
ZK Target
counter-argument
THE INCENTIVE MISMATCH
The Rebuttal: "But They Wouldn't Do That"
The assumption that sequencers will not censor is naive and ignores the structural incentives of centralized infrastructure.
Sequencers are rational economic actors operating centralized services. Their primary incentive is profit and regulatory compliance, not network neutrality. A government order or a lucrative private deal will override any philosophical commitment to censorship resistance.
Account Abstraction creates a new attack surface by routing user intents through a centralized sequencer. Unlike a simple ETH transfer, a complex AA bundle for a UniswapX trade or a Safe transaction is opaque and easier to filter without detection.
The risk is already materializing. The OFAC compliance demonstrated by Flashbots on Ethereum post-Merge provides the exact legal and technical blueprint. L2s like Arbitrum and Optimism are the next logical targets for enforcement, as their sequencers are identifiable legal entities.
Evidence: The Tornado Cash sanctions created a precedent where infrastructure providers, not just end-users, are held liable. Any L2 sequencer operating under US/EU jurisdiction faces the same legal pressure to filter transactions.
FREQUENTLY ASKED QUESTIONS
FAQ: The Builder's Dilemma
Common questions about relying on L2 Sequencers as Censorship Points in AA Transactions.
The Builder's Dilemma is the trade-off between user experience and censorship resistance when L2 sequencers order AA transactions. A sequencer can front-run, censor, or reorder user operations for MEV, compromising decentralization. This creates systemic risk for protocols like Starknet, zkSync Era, and Arbitrum that rely on a single sequencer, forcing builders to choose between speed and security.
takeaways
DECENTRALIZING TRANSACTION ORDERING
Takeaways: The Path Forward
Account Abstraction makes users dependent on L2 sequencers for transaction inclusion, creating new censorship risks. Here are the actionable paths to mitigate this centralization.
01
The Problem: Sequencer as a Single Point of Censorship
A centralized sequencer can silently drop or reorder AA user operations (UserOps). This breaks the core Web3 promise of permissionless access.
- Risk: A single entity controls the mempool for AA transactions.
- Impact: Can block sanctioned addresses or competitive dApps.
- Example: A sequencer could front-run or censor transactions for MEV extraction.
1
Active Censorship Point
100%
Reliance for AA
02
The Solution: Permissionless Sequencing & Shared Mempools
Decouple transaction ordering from block building. Allow any builder to propose blocks and create a shared, public mempool for UserOps.
- Mechanism: Implement a PBS-like auction (Proposer-Builder Separation) for sequencer slots.
- Protocols: Espresso Systems, Astria, and Shared Sequencer networks enable this.
- Outcome: Creates competitive ordering markets, reducing reliance on a single actor.
N>1
Competing Sequencers
Public
Mempool
03
The Solution: Direct L1 Inclusion & Fallback Mechanisms
Empower AA wallets to bypass the L2 sequencer entirely by submitting UserOps directly to an L1 mempool or a secure bridge.
- Implementation: Bundlers must support a forced inclusion path via L1, like Arbitrum's delayed inbox.
- Fallback: If the sequencer censors, users can pay higher gas to post directly, guaranteeing eventual inclusion.
- Trade-off: Introduces latency (~1 L1 block time) and cost, but ensures liveness.
~12s
L1 Fallback Latency
Guaranteed
Liveness
04
The Solution: Intent-Based Architecture & Solving
Shift from transactional (UserOps) to declarative (intents) models. Let specialized solvers compete to fulfill user goals, breaking the sequencer's monopoly on order flow.
- How it Works: User submits a signed intent (e.g., 'swap X for Y at best rate'). Solvers like those in UniswapX or CowSwap compete to fulfill it.
- Benefit: Solvers can source liquidity across chains via Across or LayerZero, making any single L2 sequencer irrelevant for cross-domain execution.
Multi-Chain
Liquidity Sourcing
Competitive
Solver Market
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