Sovereign Rollup

A sovereign rollup publishes its transaction data to a parent chain (like Celestia) for data availability but processes and settles all transactions on its own execution layer. This means the parent chain does not validate or enforce state transitions; it only guarantees data is available. The rollup's full nodes are responsible for deriving the canonical chain state from this data, making it the ultimate arbiter of its own ledger.

The rollup's community and validators have complete control over its fork choice rule. If a dispute arises, the sovereign rollup can decide to fork its own chain based on its social consensus and code, without requiring an upgrade or intervention from the parent chain's validators. This is a key differentiator from smart contract rollups, where the parent chain's consensus (e.g., Ethereum's) is the final arbiter.

Sovereign rollups are not constrained by the execution environment of their parent chain. Developers can choose any virtual machine (VM)—such as the Ethereum Virtual Machine (EVM), CosmWasm, or a custom VM—optimized for their specific use case. This allows for greater innovation in execution logic, fee markets, and state management compared to rollups bound by a host chain's VM constraints.

Upgrades and protocol changes are managed entirely by the rollup's own governance mechanisms. There is no dependency on the parent chain's governance or security council for upgrades. This allows for faster iteration and community-led evolution. The rollup can implement hard forks or new features based solely on the consensus of its users and validators.

Bridging assets to and from a sovereign rollup is typically a sovereign-to-sovereign interaction, similar to bridging between two independent Layer 1 chains. It does not rely on a smart contract on the parent chain to custody assets. Instead, bridges are implemented via light client verification or other trust-minimized protocols that read the state of each chain directly, enhancing security and reducing systemic risk.

While sovereign in execution and settlement, the rollup is dependent on an external data availability (DA) layer (e.g., Celestia, Avail, EigenDA) to publish its transaction data. This ensures data is available for full nodes to reconstruct the state. The security of liveness (ensuring data is published) is therefore delegated to the DA layer, while the security of correctness is maintained by the rollup's own nodes.

This is a key architectural comparison.

• Sovereign Rollup: Settles via its own fraud or validity proof system directly to its users. The L1 (DA layer) treats its data as raw bytes. Upgrades are managed by the rollup's social consensus.
• Smart Contract Rollup (e.g., Arbitrum, Optimism): Settles via a verification smart contract on an L1 like Ethereum. The L1 actively validates proofs. Upgrades are often controlled by a multisig or eventually by the L1 contract.

A core implementation detail is the lack of a canonical settlement contract. In a sovereign rollup:

• The base layer (e.g., Celestia) only guarantees data availability.
• Settlement—the definitive agreement on the canonical chain state—is performed by the rollup's nodes and clients by verifying its own proofs.
• This makes the rollup a truly independent blockchain that leverages another chain for data and security, not for validation.

A sovereign rollup posts its transaction data to a parent chain (like Celestia or Ethereum) for data availability but does not inherit its security for state validation. This separation means:

• Security: The rollup's validity is determined by its own node operators, not the parent chain's validators. Users must run or trust a full node to verify correctness.
• Censorship Resistance: While data is publicly available, the enforcement of correct state transitions is a social layer, relying on a honest majority of nodes.

Sovereign rollups have unparalleled upgradeability as they are not constrained by smart contracts on a settlement layer. However, this creates significant coordination challenges:

• Governance: Upgrades are enacted via soft forks at the node software level, requiring broad adoption by node operators.
• Fragmentation Risk: Disagreements can lead to chain splits, as there is no canonical settlement contract to enforce a single state.

Building on a sovereign rollup grants developers full control over the execution environment and virtual machine. The trade-offs include:

• Infrastructure Burden: Teams must build or adapt their own RPC nodes, indexers, and explorers, as they cannot rely on the parent chain's ecosystem tooling.
• Innovation Potential: This control allows for radical VM designs (e.g., SVM, MoveVM) and fee market mechanisms that are impossible on more constrained rollup models.

Sovereign rollups operate as independent blockchains, which fundamentally changes the interoperability model.

• Trust Assumptions: Bridging assets requires light client bridges or federations that verify the rollup's consensus, not just a smart contract proof. This can introduce new trust models.
• Native Cross-Chain: They can implement IBC or other cross-chain protocols directly at the consensus layer, enabling a more modular interoperability stack.

The economic design of a sovereign rollup differs significantly from smart contract rollups.

• Fee Sovereignty: 100% of transaction fees are captured by the rollup's validators/sequencers and its native token, with no revenue sharing with a settlement layer.
• Cost Structure: The primary cost is data availability fees paid to the parent chain. Throughput is cheaper than Ethereum L1 but may be more expensive than some optimistic rollups that batch proofs.

Key differentiators from optimistic and zk-rollups:

• Settlement: Smart contract rollups use a settlement contract for fraud proofs or validity proofs. Sovereign rollups settle on their own chain.
• Ecosystem Lock-in: Smart contract rollups are tightly integrated into their host L1's tooling and liquidity. Sovereign rollups must bootstrap their own ecosystem but are not limited by L1 design choices.

Sovereign rollups post compressed transaction data, known as blobs, to a parent chain like Ethereum. This provides a secure, immutable, and verifiable data layer. The parent chain does not validate the rollup's state transitions; it only guarantees the data is available for anyone to download and verify, enabling fraud proofs or validity proofs to be constructed off-chain.

Unlike smart contract rollups, sovereign rollups do not rely on a settlement contract on the parent chain. Settlement—the final confirmation of the canonical chain—is performed by the rollup's own nodes. Disputes are resolved through a social consensus or a proof system (like fraud proofs) that anyone can run by verifying the published data, making security dependent on the rollup's own validator set and user vigilance.

To interact with a sovereign rollup, users or applications typically run a full node. This node downloads the rollup's block data from the parent chain, re-executes all transactions, and independently verifies the chain's state. Light clients can also exist, which rely on assumptions of honest majority or cryptographic proofs to verify state with less data, though full nodes are the primary security model.

A sovereign rollup defines its own fork choice rule, the protocol that determines the canonical chain. This is completely independent of the parent chain's consensus. The rule is typically based on the longest chain of data posted to the parent chain, but the rollup's community must socially coordinate to adopt the correct fork in case of disputes, similar to Bitcoin or Ethereum's social layer.

Sovereign rollups have a sovereign upgrade path. Protocol upgrades are enacted by the rollup's node operators and community, not by a smart contract on the parent chain. This allows for rapid iteration and changes to the virtual machine, fee market, or consensus rules without requiring modifications to the underlying data availability layer.

Also known as enshrined rollups or Layer 2s, smart contract rollups (Optimistic, ZK) use a verification contract on the parent chain for settlement and dispute resolution. Key differences:

• Settlement: Handled on L1 vs. on the rollup.
• Bridges: Native vs. trust-minimized.
• Upgrades: Often require L1 governance vs. rollup-native governance.
• Security: Inherits L1's economic security for settlement vs. relies on its own validator set.