The Sequencer is the entrypoint to Layer N. The role of the sequencer is to receive transactions, and to order them. Once ordered, they move on to be executed by the leader validator.
The core issue plaguing the entire rollup ecosystem is liquidity fragmentation. Decentralised applications must decide on two things: 1) whether they want to compromise their performance and functionalities by going cross-chain or prioritize the user experience on the native chain and preventing other potential applications from building on top of them, 2) whether they want to deepen the liqudity and TVL within their own application which means drying up liquidity for other dApps on the same chain, or work collaboratively with other dApps.
Layer N solves the dillemas with a shared sequencer. Rollups built using Layer N’s technology can share the same sequencer, ensuring that their state is settled together, block by block. This way, native cross-rollup communication secured by Ethereum is made possible without the need for external bridges or wrapped token systems. An EVM rollup can let applications directly engage with Nord rollups in an atomic manner in the Layer N ecosystem, effectively removing the risks of third-party bridges.
Moreover, this changes the nature of zero-sum liquidity protectionism on chain and opening up endless possibilities for dApp composabilities. For example, decentralized exchanges can optimize for performance while allowing other protocols to access their liquidity without worrying about losing critical depth on the book as all dApps tap into the same shared liquidity pool. This breakthrough unlocks numerous opportunities for DeFi developers and enables DEX protocols to attract market makers without heavy incentivisations.
Layer N’s shared sequencer structure will push DeFi not only to match traditional finance performance but also to provide a superior experience with applications which are not possible anywhere else made possible by leveraging composability.
Since a centralized sequencer model is fast-to-launch and easy-to-implement, Layer N plans to launch with a single sequencer. However, Layer N plans to decentralize its sequencer set in the future.
Here we outline the vision for Layer N's decentralized sequencer network:
In partnership with EigenLayer ↗ (opens in a new tab), Layer N can make use of a decentralized network of ETH restakers. This decentralized network's sole purpose is to provide a censorship-resistant, and self-manageable MEV environment, for ordering transactions (thereby avoiding state growth problems). This network can be horizontally scaled by assigning random subsets of sequencing nodes to order different subsets of transactions.
For the public EVM rollup, Layer N plans to fully decentralize the sequencer set for the purposes of censorship-resistance and fair-ordering of transactions. This means that a network of sequencers will come to consensus on the ordering of transactions. For Nord, Layer N’s exchange-optimized rollup, decentralization will be achieved through a leader auction mechanism instead, allowing it to avoid high consensus latencies while preserving gurantees of censorship-resistance and fair-ordering.
Layer N is also surveying other decentralized sequencing solutions.
Layer N is firmly committed towards building out the most robust, censorship-resistant, and fair decentralized sequencer set.