Shared sequencing commoditizes block building. Today, every L2 stack like Arbitrum and Optimism operates its own sequencer, creating redundant infrastructure and fragmented liquidity. A shared sequencer like Espresso or Astria provides a neutral ordering layer, allowing rollups to outsource this function and focus resources on virtual machine innovation.
layer-2-wars-arbitrum-optimism-base-and-beyond
Blog
Why Shared Sequencing Will Redefine the L2 Landscape
Shared sequencing, pioneered by Espresso and Astria, unbundles transaction ordering from execution. This modular shift directly challenges the revenue and sovereignty of monolithic L2s like Arbitrum and Optimism, forcing a fundamental re-architecting of the Layer 2 stack.
introduction
THE NEW PRIMITIVE
Introduction
Shared sequencing is the infrastructure layer that will commoditize execution and force L2s to compete on application logic, not block production.
The value shifts to the application layer. This separation mirrors the evolution from monolithic to modular blockchains. Just as Celestia decoupled data availability, shared sequencers decouple transaction ordering. The competitive battleground moves from who can build blocks fastest to who can build the best application-specific execution environments.
Evidence: Espresso's testnet processes orders for multiple rollup stacks concurrently, demonstrating the throughput and atomic composability that fragmented sequencers cannot provide. This model is the logical endpoint of the modular thesis, reducing costs and complexity for every new chain.
thesis-statement
THE INCENTIVE REALIGNMENT
The Core Argument: Sovereignty and Revenue Under Siege
Shared sequencers will dismantle the current L2 economic model by decoupling transaction ordering from execution, forcing a fundamental re-evaluation of value capture.
Sequencer revenue is the foundation of today's L2 business model. This revenue, derived from MEV and base fees, funds protocol development and security. Shared sequencing protocols like Espresso and Astria externalize this function, creating a competitive market for block production.
Sovereignty becomes a service, not an architectural mandate. Rollups must choose between full control (expensive, slow) and shared security/performance (cheap, fast). This trade-off mirrors the Celestia vs. Ethereum DA debate, where modularity sacrifices some control for scalability.
The value shifts upstream to the sequencing layer and its stakers. L2s become execution clients competing on VM efficiency and developer experience, while the shared sequencer captures the economic rent. This is the modular stack's inevitable endgame.
Evidence: Arbitrum and Optimism currently capture 100% of their sequencer profits. A shared sequencer market would commoditize this, redirecting a significant portion of that value to a new protocol layer, as seen in the redistribution of value from Ethereum L1 to rollups post-EIP-1559.
market-context
THE BOTTLENECK
The Current State: A Monopoly on Ordering
Today's L2s centralize transaction ordering power, creating a single point of failure and rent extraction.
Sequencer Centralization is Inevitable: Every major L2—Arbitrum, Optimism, zkSync—operates a single, permissioned sequencer. This is not a temporary oversight but a direct consequence of the rollup security model; the sequencer must be trusted to order transactions before they are proven on L1.
The Monopoly Extracts Value: The incumbent sequencer captures maximum extractable value (MEV) and transaction fee revenue. This creates a rent-seeking entity at the core of the network, analogous to a centralized exchange's order book, which directly contradicts the credibly neutral settlement promised by Ethereum.
It's a Systemic Risk: A single sequencer is a single point of failure for censorship and liveness. If Arbitrum's sequencer halts, the entire network stalls until users perform costly forced transactions via L1, breaking the user experience promise of L2s.
Evidence: Over 99% of Arbitrum and Optimism transactions are ordered by their official sequencers. The resulting MEV, currently captured by these entities, is estimated to be a multi-billion dollar annual market, as seen in the success of Flashbots on Ethereum L1.
key-trends
SHARED SEQUENCING
The Unbundling Wave: Three Inevitable Trends
Monolithic L2s are a temporary artifact. The modular stack is unbundling, and the sequencer is the next component to become a competitive commodity.
01
The Problem: The L2 as a Rent-Seeking Monopoly
Today's L2s bundle execution, data availability, and sequencing. The sequencer is a single-point-of-failure cash cow, extracting ~90% of transaction fees as pure profit while offering no credible liveness guarantees. This creates misaligned incentives and centralization risk.
- Extractive Economics: Users pay for security, but sequencers capture most value.
- Single Point of Failure: A sequencer outage halts the entire chain.
- No Credible Neutrality: The sequencer can front-run, censor, or reorder transactions.
~90%
Fee Capture
1
Single Point
02
The Solution: A Commoditized Sequencing Marketplace
Shared sequencers like Espresso, Astria, and Radius decouple ordering from execution. They create a competitive market where rollups auction block space, driving costs toward marginal. This enables cross-rollup atomic composability and introduces verifiable liveness via decentralized validator sets.
- Cost Reduction: Market competition pushes sequencing fees to near-zero.
- Cross-Rollup UX: Atomic execution across chains like Arbitrum and Optimism.
- Enhanced Security: Decentralized sequencer sets with slashing for liveness failures.
~$0
Marginal Cost
Atomic
Cross-Rollup
03
The Endgame: Intents and Proposer-Builder Separation
Shared sequencing is a stepping stone. The final form is a network of specialized actors: Searchers find optimal routes, Builders construct blocks, and Proposers commit them. This PBS model, inspired by Ethereum's roadmap and UniswapX, shifts the paradigm from transaction execution to intent fulfillment.
- Optimal Execution: Users submit goals ("intents"), not transactions.
- Specialized Roles: Efficiency gains from market segmentation.
- Censorship Resistance: Decentralized proposer sets prevent transaction filtering.
Intent-Based
New Paradigm
PBS
Architecture
SHARED SEQUENCING IMPACT
Monolithic vs. Modular Stack: The Power Shift
A comparison of L2 architectural paradigms, focusing on how shared sequencing redefines sovereignty, economics, and interoperability.
| Architectural Feature | Monolithic L2 (e.g., Arbitrum, Optimism) | Modular L2 with Solo Sequencing | Modular L2 with Shared Sequencing (e.g., Espresso, Astria) |
|---|---|---|---|
Sequencer Sovereignty | Full control by L2 core team | Full control by L2 core team | Shared with a decentralized network |
Sequencer Revenue Capture | 100% to L2 treasury | 100% to L2 treasury | Shared with sequencing network (e.g., 50-80% to L2) |
Cross-L2 Atomic Composability | Not natively possible | Not natively possible | Native via shared sequencing layer |
Time to Finality (L1 Inclusion) | ~1-10 minutes | ~1-10 minutes | < 1 minute (via pre-confirmations) |
MEV Capture & Redistribution | Centralized to L2 sequencer | Centralized to L2 sequencer | Decentralized; programmable via SUAVE-like auctions |
Protocol Upgrade Complexity | High (requires hard fork) | High (requires hard fork) | Low (swap sequencing provider) |
Infrastructure Cost | High (dedicated sequencer ops) | High (dedicated sequencer ops) | Low (shared resource pool) |
Key Dependency | Own sequencer reliability | Own sequencer reliability | Shared sequencer liveness (e.g., EigenLayer AVS) |
deep-dive
THE ARCHITECTURAL SHIFT
The Mechanics of Disruption: How Shared Sequencing Wins
Shared sequencing dismantles the core economic and technical assumptions of today's rollup-centric L2 model.
Shared sequencing eliminates rollup sovereignty as the primary scaling bottleneck. Today's L2s operate as isolated state machines, each with its own sequencer enforcing a single, canonical transaction order. This creates fragmented liquidity and forces users to pay for redundant security and data availability across chains like Arbitrum and Optimism.
A shared sequencer is a public good, not a proprietary profit center. It processes transactions for multiple rollups in a single, atomic batch. This enables cross-rollup atomic composability—a transaction on one rollup can depend on the outcome of a transaction on another, executed in the same block. This is the interoperability that Celestia's rollup-centric vision promised but couldn't deliver.
The economic model inverts from rent extraction to utility pricing. Isolated sequencers, like those run by Arbitrum and Base, capture MEV and transaction fees. A shared sequencer, as proposed by Espresso Systems or implemented in test by Astria, commoditizes sequencing, driving costs toward the marginal cost of computation and bandwidth.
Evidence: Espresso's HotShot sequencer demonstrated 10,000 TPS in a testnet with 150 validators, a throughput ceiling that isolated sequencers cannot approach due to their inherent single-threaded design. This proves the throughput ceiling for shared infrastructure is an order of magnitude higher.
protocol-spotlight
WHY SHARED SEQUENCING WILL REDEFINE THE L2 LANDSCAPE
The Attackers: Espresso, Astria, and the New Stack
The monolithic L2 stack is being unbundled, with shared sequencers emerging as the critical battleground for sovereignty, liquidity, and user experience.
01
The Problem: The L2 Sovereignty Trap
Rollups are forced to choose: cede control to a centralized sequencer for speed or build a costly, complex decentralized one. This creates a single point of failure and fragments liquidity across isolated chains.\n- Vulnerability: Centralized sequencers are a $20B+ honeypot for MEV and censorship.\n- Inefficiency: Each rollup replicating sequencing is like every website building its own internet backbone.
1
Point of Failure
$20B+
TVL at Risk
02
Espresso: The Shared Sequencing Marketplace
Espresso Systems is building a decentralized marketplace where rollups auction sequencing rights. It turns sequencing from a cost center into a revenue stream via MEV redistribution.\n- Timeboost: Auction mechanism for ordering priority, capturing and redistributing MEV.\n- HotShot: Its high-throughput consensus layer, enabling sub-2-second finality and seamless cross-rollup composability.
<2s
Finality
Market
For MEV
03
Astria: The Shared Sequencer-as-a-Service
Astria provides a bare-metal, decentralized shared sequencer that rollups can plug into like AWS. It focuses on simplicity and execution, not economic games.\n- Celestia Stack Native: Built for modular chains using Celestia for DA, optimizing the full stack.\n- Instant Liquidity: Transactions are ordered in a shared mempool, enabling native cross-rollup arbitrage and composability from day one.
0
Sequencer Ops
Native
Cross-Rollup
04
The New Stack: From Monoliths to Specialists
Shared sequencers complete the modular stack: Execution (OP Stack, Arbitrum Orbit), Settlement (Ethereum, Celestia), Data Availability (Celestia, EigenDA), and now Sequencing (Espresso, Astria).\n- Interoperability First: Shared sequencing is the missing link for atomic cross-rollup transactions, challenging bridges like LayerZero and Axelar.\n- VC Bet: This is where the next wave of infrastructure investment is flowing, betting on the unbundling of the blockchain stack.
4-Layer
Modular Stack
Atomic
Cross-Rollup
05
The MEV Endgame: From Extraction to Redistribution
Centralized sequencers currently capture all MEV. Shared sequencers with decentralized ordering enable MEV redistribution back to rollups and users, akin to CowSwap or UniswapX on L1.\n- Transparent Auction: Protocols like Espresso's Timeboost make MEV flows visible and contestable.\n- New Business Model: Rollup revenue shifts from pure gas fees to a share of sequencer profits, aligning economic incentives.
Redistributed
MEV
New Revenue
For Rollups
06
The Existential Threat to Appchains
Why launch a fragile, illiquid appchain when you can spin up a sovereign rollup with instant shared sequencing? This attacks the Cosmos and Avalanche Subnet model.\n- Instant Security & Liquidity: Bootstraps network effects from day one via the shared sequencer's existing validator set and mempool.\n- Developer Focus: Teams can concentrate on application logic, not Byzantine fault-tolerant consensus.
Day 1
Liquidity
Sovereign
Rollup
counter-argument
THE INTEGRATED STACK
The Bull Case for Monoliths: Why They Might Survive
Monolithic L2s offer superior performance and simplicity, creating a durable competitive moat against modular fragmentation.
Integrated execution environments win. A unified stack like Arbitrum or Optimism eliminates cross-domain latency and composability breaks inherent to modular designs. This creates a deterministic, high-performance environment for applications that is impossible to replicate with a fragmented sequencer, prover, and DA layer.
Developer experience is the moat. Building on a monolithic chain like Arbitrum Nitro is operationally simpler than managing a sovereign rollup's security and data availability. This reduces friction and concentrates developer talent, creating network effects that are difficult for nascent modular frameworks to dislodge.
Shared sequencing introduces new centralization vectors. While Espresso and Astria propose decentralized sequencing networks, they create a meta-consensus problem. The sequencer set becomes a new trust layer, potentially more fragile than a single, heavily-audited monolithic sequencer operated by a foundation with skin in the game.
Evidence: Arbitrum processes over 1 million transactions daily with sub-second finality. This throughput and user experience is the product of a tightly-coupled, vertically-integrated stack, not a best-of-breed modular assembly.
risk-analysis
CENTRALIZATION & COMPETITION
The Inevitable Friction: Risks of the Shared Future
Shared sequencing promises a unified L2 future, but introduces new systemic risks and power dynamics that will reshape the landscape.
01
The Single Point of Failure
A shared sequencer becomes a systemic risk vector for all connected rollups. A liveness failure or censorship attack at this layer could halt a $10B+ TVL ecosystem. This creates a new, concentrated attack surface that adversaries will target.
- Liveness Risk: A single bug or DoS attack can stall dozens of chains.
- Censorship Vector: A malicious or coerced sequencer can censor transactions across the network.
- Regulatory Capture: A centralized sequencer is a clear jurisdictional target for enforcement.
1
Critical Chokepoint
$10B+
TVL at Risk
02
The MEV Cartel Problem
Centralized sequencing power enables maximal MEV extraction. A dominant sequencer like Espresso or Astria could internalize cross-rollup arbitrage, turning latency into a monetizable asset and creating a closed club for professional searchers.
- Internalized Arbitrage: The sequencer can front-run its own user transactions across L2s.
- Proposer-Builder Separation (PBS) Failure: The economic model collapses when the sequencer is both builder and proposer.
- Stifled Innovation: Independent MEV searchers and fair ordering protocols like SUAVE are sidelined.
~100ms
Arb Latency Edge
>90%
MEV Capture Potential
03
The Interoperability Trap
Shared sequencing creates vendor lock-in for interoperability. Rollups become dependent on the sequencer's native cross-chain messaging, creating a moat that undermines sovereign bridge choice and fragments liquidity.
- Protocol Lock-in: Migrating away means losing native, fast cross-L2 communication.
- Bridge Fragmentation: Competes with and weakens dedicated interoperability layers like LayerZero, Axelar, and Wormhole.
- Sovereignty Erosion: Rollups cede control over a core component of their stack and user experience.
1
Vendor Protocol
Multi-Chain
Dependency Created
04
The Economic Centralization Flywheel
Sequencer revenue (fees + MEV) creates a winner-take-most market. The largest shared sequencer can reinvest profits into subsidizing rollup adoption, creating an economic flywheel that crowds out decentralized alternatives like based sequencing or individual rollup sequencers.
- Subsidy Wars: Ability to offer loss-leading sequencing fees to capture market share.
- Barrier to Entry: New entrants cannot compete with the capital and integrated ecosystem of the incumbent.
- Fee Market Distortion: Artificial pricing disrupts the natural economic security of individual L2s.
-50%
Subsidized Fees
10x
Revenue Advantage
future-outlook
THE INFRASTRUCTURE SHIFT
The New Landscape: Predictions for 2024-2025
Shared sequencing will fragment the L2 stack, commoditizing execution and forcing a redefinition of value capture.
Shared sequencing commoditizes execution. Decoupling the sequencer from the rollup client, as pioneered by Espresso Systems and Astria, turns execution environments into replaceable modules. This creates a competitive market for block space, driving down costs and forcing rollups like Arbitrum and Optimism to compete on features beyond simple transaction ordering.
Value accrual shifts to data availability. With neutral sequencing layers like Espresso's shared sequencer network, the primary moat for an L2 becomes its data availability (DA) solution and settlement guarantees. This accelerates the adoption of efficient DA layers like Celestia, EigenDA, and Avail, making the Ethereum blob market a direct cost battleground.
Cross-domain atomic composability emerges. A shared sequencer enables atomic cross-rollup transactions without complex bridging. This unlocks new application designs, moving liquidity fragmentation from a problem solved by LayerZero and Across to a native feature of the execution layer, directly challenging intent-based architectures.
Evidence: Espresso's testnet processes batches for multiple rollup stacks concurrently. The economic model shifts from sequencer MEV extraction to fee markets for guaranteed ordering and fast finality, fundamentally altering the L2 business model.
takeaways
WHY SHARED SEQUENCING WILL REDEFINE THE L2 LANDSCAPE
TL;DR for Busy Builders
Shared sequencing is the next infrastructure war, moving the bottleneck from execution to ordering. Here's what it solves.
01
The Problem: Isolated L2s Are Inefficient Islands
Every major L2 today runs its own sequencer, creating siloed liquidity, fragmented security, and no atomic composability across chains. This is the multi-chain problem, repeated.
- Wasted Capital: Billions in TVL locked in separate bridges and liquidity pools.
- No Atomic Cross-Rollup Trades: Impossible to execute a swap on Arbitrum and a mint on Optimism in one atomic transaction.
- Security Overhead: Each sequencer set must be bootstrapped and maintained independently.
$10B+
Bridged TVL
~3-12s
Settlement Latency
02
The Solution: A Neutral, Decentralized Sequencing Layer
A shared sequencer like Espresso Systems or Astria provides a canonical ordering service for multiple rollups. Think of it as a decentralized mempool for L2s.
- Atomic Composability: Enables trust-minimized cross-rollup transactions within a single block.
- Enhanced MEV Resistance: Proposer-builder separation (PBS) models and encrypted mempools become viable at the L2 level.
- Shared Security & Liquidity: Rollups inherit economic security from the shared validator set and a unified liquidity pool.
~500ms
Proposal Time
1-N
Rollups Served
03
The Catalyst: Intents and Cross-Chain UX
Shared sequencing is the missing infrastructure for intent-based architectures like UniswapX and CowSwap. Users express a desired outcome, and solvers execute across the most efficient L2s.
- Solver Efficiency: Solvers can coordinate complex multi-rollup bundles without worrying about cross-chain settlement risk.
- User Abstraction: The "which chain?" question disappears. The shared sequencer becomes the user's chain.
- Killer Apps: Enables previously impossible DeFi primitives like cross-rollup flash loans and unified limit order books.
>60%
Fill Rate Boost
-90%
Failed Tx
04
The Trade-off: Sovereignty vs. Interoperability
Adopting a shared sequencer means ceding control over transaction ordering. This is a fundamental political and economic decision for L2 teams.
- Pro: Instant interoperability with every other rollup in the shared set, creating a unified ecosystem.
- Con: Reduced ability to capture sequencer revenue and tailor MEV strategies. Reliance on a third-party system.
- The Middle Path: LayerZero's OApp standard and Across show alternative, application-layer interoperability, but without atomic guarantees.
~$50M/yr
Sequencer Revenue at Risk
100+
Potential L2s
05
The Endgame: A Modular Stack Re-Ordering
Shared sequencing inverts the rollup stack. Execution layers become commodities, while the sequencing layer becomes the primary source of value accrual and user aggregation.
- New Business Model: The sequencer layer captures fees from all connected rollups, not just one.
- Vertical Integration: Expect rollup-as-a-service providers like Caldera and Conduit to bundle shared sequencing.
- The Big Bet: The winning shared sequencer could become more valuable than any single L2 built on top of it.
10x
Fee Multiplier
L1-L2
Convergence
06
The Risk: Recreating L1 Consensus Problems
A high-value shared sequencer becomes a massive honeypot. We risk rebuilding the same scalability and decentralization challenges we tried to escape with rollups.
- Centralization Pressure: High throughput demands may lead to permissioned validator sets initially, akin to Binance Smart Chain.
- Congestion Spillover: A popular app on one rollup can congest the shared sequencer, degrading performance for all connected chains.
- Protocol Risk: A bug or exploit in the shared sequencer halts every dependent L2 simultaneously.
1
Single Point of Failure
TBD
Time to Decentralize
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