The New Modular Rollup Toolkit

Another acronym to add to your crypto vocabulary?

RaaS, or Rollups-as-a-Service.

An increasingly popular solution to both customize and scale blockchains, RaaS holds promise to address the current complexities and issues facing rollups while making them more manageable and tailor-made to specific use cases like DeFi or gaming.

In this article, we will explore the significance of RaaS, what these platforms enable, and what projects are at the forefront of this burgeoning ecosystem. Let’s get into it! 👇

What is RaaS and Why is it Important?

Initially, all blockchains were monolithic, operating on only one layer. However, during bull markets, particularly the 2021 NFT craze on Ethereum, these blockchains struggled with performance issues due to bottlenecks that constrained throughput and caused on-chain transaction fees to surge.

As a result, modularity was born — a design approach that splits actions across multiple layers to address these issues.

Rollups exemplify this design structure, separating execution from Ethereum’s Mainnet to facilitate higher transaction throughput while ensuring security and reducing costs.

However, the intricacies involved in creating, deploying, and managing these rollups pose challenges, slowing the rapid adoption of Layer 2 (L2) solutions. RaaS platforms simplify this process, enabling developers and even people with low to no coding experience to easily launch rollups without the usual technical burdens.

As a result, the advent of RaaS signifies a pivotal shift for rollups, promising to accelerate the adoption of L2s. With EIP-4844 arriving next week – signaling a significant step for Ethereum towards its rollup-centric future – and the blossoming of the data availability market acting as catalysts for rollups, the rise of RaaS stands to enable a new era for blockchains. This will be an era of interoperability and one where highly specialized blockchains exist to tackle any use case.

How Does RaaS Work?

At their core, RaaS platforms operate by offering all, or a particular set, of three services — Software Development Kits (SDKs), No-Code Development Options, and Shared Sequencers — designed to make the experience of developing and managing rollups as seamless as possible.

SDKs provide toolkits for developers to launch rollups with, usually configured for a specific ecosystem. Examples of these include Optimism’s OP Stack, Arbitrum’s Orbit chains, and zkSync’s Hyperchains.

No-Code Development Options are platforms that allow users with limited coding expertise to launch and manage customized rollups quickly.

Shared Sequencer systems process rollup transactions together and pass them on to a Layer 1, like Ethereum or Cosmos.

Through these services, RaaS platforms provide users, whether developers or not, with the tools they need to launch their own rollup. Each RaaS provider develops their own spin on the above trio, offering additional features they believe will be attractive to deployers.

Below, we look at some of the leading providers — AltLayer, Conduit, Dymension, and Movement Labs — to examine the unique twist they give to this product suite. 👇

🔷 AltLayer

The recently launched AltLayer provides a versatile RaaS protocol, supporting both optimistic and zk-rollups. Designed with a multi-chain, multi-virtual machine (VM) world vision in mind, AltLayer decided to support both Ethereum Virtual Machine (EVM) and Web Assembly (WASM) smart contracts — used by Cosmos and Polkadot — from the start, a smart step as it allows for interoperability between ecosystems and future support of alternative VMs like Solana VM or Move VM.

In their product suite, AltLayer offers a No-Code Dashboard for users without programming backgrounds to launch rollups within minutes that can be extensively customized, with a specific number of sequencers or a gas limit, for example. They also offer a Rollup SDK for developers who want to integrate rollups directly into the products and a Shared Sequencer Set via their Beacon Layer. Using a base set of nodes known as the Beacon Layer, AltLayer provides a shared sequencer for all L2 rollups deploying via AltLayer. The Beacon Layer also makes possible cross-chain transactions and messaging between all L2s that launch with AltLayer.

🩵 Conduit

RaaS platform Conduit allows developers to launch optimistic rollups with ease, managing all the operations so that developers can concentrate on building products.

Originally launching exclusively with the OP Stack, Conduit expanded to include support for Arbitrum’s Orbit chains — though the most noteworthy chains they have launched all use the OP Stack. Zora Network, Public Goods Network, Mode, Aevo, and Frame have launched — or will launch — using Conduit. These teams and others that launch with Conduit profit from sequencer fees and MEV from their rollups. Part of these fees are also redistributed to the OP Collective to support public goods funding. 

To further bolster its OP Stack chains, Conduit developed Elector, a consensus layer that reduces sequencer downtime for OP Stack-based chains by over 50%. The OP Stack traditionally relies on a single sequencer, making it vulnerable to downtime during software updates or hardware failures, which in turn delays transactions and halts user interaction with the rollup. Elector addresses this by incorporating a trio of sequencers into its protocol. If one sequencer fails, another just takes over, thus maintaining rollup operations with "99.95%+" uptime. This innovative approach not only enhances reliability but also allows for seamless software and infrastructure updates without any downtime.

⚫️ Dymension

As perhaps the flagship RaaS, Dymension stands out as a modular, Proof of Stake (PoS) blockchain ecosystem tailored specifically for RollApps — dedicated rollups designed for executing transactions off-chain and being managed by a solo sequencer or group of them. 

Dymension's architecture can be divided into two sections:

1. The Dymension Hub: A settlement layer that ensures smooth operation for RollApps.
2. The RollApp Development Kit (RDK): A toolkit for developing and deploying permissionless RollApps.

The Dymension Hub, aka the Hub, acts as the settlement layer and core of Dymension’s network, working with Dymint — Dymension’s version of Cosmos’ Tendermint consensus mechanism — to create blocks for RollApps. The Hub checks updates from RollApps, assuming they're correct unless proven otherwise, which helps RollApps work faster and with fewer delays. Interestingly enough, it only makes blocks when needed, saving resources and costs, as opposed to continuously generating blocks like other chains. Like with Cosmos, The Hub also connects RollApps, allowing them to communicate, bridge, and trade with each other.

Also, the Hub provides the opportunity to stake Dymension — a tactic similar to Celestia where people staked TIA to qualify for other airdrops. A few of the airdrops already announced for DYM stakers include ValiDAO (DAO-owned validator), Avail (modular infrastructure), and NIM Network (gaming-focused rollapp).

The Dymension RollApp Development Kit (RDK), similar to the Cosmos SDK, comes equipped with several modules to speed up deployment. These modules come from the Cosmos SDK, the Inter-Blockchain Communication (IBC) Protocol, Ethermint, and CosmWasm, all of which come together to provide RollApps tools for governance, token transfer, upgrade capabilities, and support for both EVM and CosmWasm smart contracts. 

Additionally, Dymension RollApps stand out due to the series of benefits they receive from the Hub, like inheriting the same level of security as the settlement layer or being able to use Dymension’s validator network instead of bootstrapping their own — something that greatly reduces the chain’s security budget and minimizes token dilution since they don’t have to incentivize validator participation when first launched. Further, by outsourcing consensus to the Hub, RollApps can focus exclusively on maximizing throughput and low latency. Even more, thanks to Dymension Hub’s native Automated Market Maker (AMM), they share liquidity — addressing a common issue for L2s (liquidity fragmentation) — and have fees paid directly to them, rather than to Dymension, in whatever token they choose. To kickstart adoption, Dymension recently launched an incentive program for their AMM, issuing over 100% APR to liquidity providers of certain pools. 

🍨 Gelato Network

Last September, Gelato, a frontrunner in providing backend infrastructure and smart contract services for EVM chains, announced they were adding Rollups-as-a-Service to their suite. With support for the OP Stack, Arbitrum Orbits, and the Polygon Chain Development Kit (CDK), Gelato makes it easy for developers to launch both optimistic and zero-knowledge (ZK) rollups using their preferred framework. Further, Gelato’s background as an infrastructure provider lets them provide developers with an additional suite of tools like:

• Account Abstraction: A Software development kit that allows developers to build more user-friendly wallets with features like “Sign in with Google,” “Sign up with Email,” or gasless transactions.
• Web3 Functions: A service that lets developers connect smart contracts to off-chain data and automate responses. 

Additionally, their network of infrastructure partners lets developers pull from services like LayerZero or Moonpay to further augment their chains with features like cross-chain integration or easy on-off ramping. 

Gelato's existing product suite and partner ecosystem provide a strong foundation to compete with other RaaS providers. This suite lets them cater further to the developer experience, while also making tools accessible for developers to focus on building the best user experience they can — whether it be with something like Account Abstraction or fiat on/off ramping. 

Conclusion

In summary, Rollups-as-a-Service (RaaS) platforms provide a set of tools for building towards a modular future.

By offering a spectrum of services, from SDKs for developers, no-code options for non-programmers, and shared sequencer systems for efficiency, RaaS platforms like AltLayer, Conduit, Dymension, and Gelato Network not only alleviate the complexities common to rollups but also usher in a future where blockchains can be tailor-made solutions, highly interoperable, and developed by almost anyone.

As the blockchain landscape continues to evolve, it will be interesting to see where RaaS takes hold — if it does. Regardless, RaaS provides an exciting opportunity to potentially solve the problems that commonly plague L2s while weaving together ecosystems and making their alluring qualities available to all.