AltLayer Explained: Rollups-as-a-Service
AltLayer has come a long way from aggregating boxed zk solutions to launching proprietary technologies to scale and accelerate web3 based on restaking. Let's dive into this with applied examples!
Disclaimer: The content presented in this article, along with others, is based on opinions developed by the analysts at Dewhales and does not constitute sponsored content. At Dewhales, we firmly adhere to a transparency-first philosophy, making our wallets openly available to the public through our website or DeBank, and our articles serve as vehicles for self-expression, education, and contribution to the ecosystem.
Dewhales Capital does not provide investment advisory services to the public. Any information should not be taken as investment, accounting, tax or legal advice or as a recommendation to purchase, sell or hold or to pursue any investment style or strategy. The accuracy and appropriateness of the information is not guaranteed by Dewhales Capital.
1. Introduction
2. Rollup Hub
3. Restaked Rollups
3. Involved Players
3.1 Partnerships and projects that use AltLayer technology
3.2 Integration Examples
4. Tokenomics
5. Who is behind the AltLayer?
6. Backers
7. Conclusion
1. Introduction
In the ever-evolving landscape of the blockchain, scalability and customization have become major concerns for application developers. With the growing popularity of ZK Rollups and Optimistic Rollups, there's a clear need for solutions that empower developers to scale their applications while maintaining flexibility and control.
In recent times, ZK Rollups and Optimistic Rollups have gained significant traction in the blockchain space due to their ability to significantly enhance the throughput and efficiency of existing blockchains like Ethereum. However, despite their promise, these rollup technologies come with their own set of challenges, particularly in terms of accessibility, customization, centralization of sequencers, soft finality, fragmented liquidity, etc.
This is where AltLayer comes in. Unlike the existing options available to application builders today, AltLayer provides a Rolups-as-Service offering to developers seeking hands-on control of their rollup solutions. The RaaS service allows developers to manage their rollups directly, offering a high degree of customization and control over their blockchain infrastructure.
However, what truly sets AltLayer apart is its new Restaked Rollup framework that brings restaking to rollups. RaaS together with the Restaked Rollup framework makes it possible for anyone including individuals with little to no coding experience to create their own tailored blockchain execution layer within minutes and bring added security and decentralization to their rollup. This remarkable feature bridges the gap between technical and non-technical users, making AltLayer an accessible choice for a wide spectrum of application builders.
In this article, we'll delve deeper into the mechanics and potential of AltLayer, exploring how it stands as a Rollup-as-a-Service solution among the rapidly evolving blockchain landscape.
2. Rollup Hub
AltLayer is a Rollup-as-a-Service protocol for developers to launch their own Layer 2s (imagine launching an application-dedicated version of Optimism, zkSync, Arbitrum, etc). AltLayer offers:
SDK for developers who wish to manage their rollups themselves
No-code dashboard that allows everyone to spin up a customized execution layer within 2 mins through a few simple clicks
Basically, AltLayer is a decentralized rollup hub that allows individuals to launch their own L2 solution for their needs. However, some questions may arise as to the types of execution methods made available, rollup speed, general/specialized purpose rollups and so on.
AltLayer allows launching both ZK Rollups and Optimistic Rollups with EVM, WASM, or other run time for general purpose or application-specific purpose. A user can fully customize their rollup according to their needs and preferences.
As mentioned above, AltLayer allows fast deployment in minutes, the process is pretty much similar to deployment on a general chain. Rollups of AltLayer don’t need to be secured by hundreds of validators (such as Cosmos SDK for example), because they use an underlying chain (Layer 1) as the security layer.
AltLayer has been designed with modularity at its core, enabling end-users to tailor their rollup solutions according to their preferences. This flexibility extends to the choice of runtime environments, including options like EVM, WASM, and more. Additionally, users have the freedom to select their preferred data availability layer, whether it's the L1 blockchain or a data layer like Celestia. AltLayer also allows users to opt for their preferred settlement layer, e.g. Ethereum or Arbitrum One.
The main issue most of the rollups face is sequencer decentralization (ordering and processing the transactions). However, AltLayer is operated by a decentralized sequencer network. These sequencers are selected from a sequencer network called SQUAD based on their stake and some randomness. We’ll talk more about SQUAD in the next section.
Lastly, a core feature worth mentioning is Tiered-Finality. Traditional blockchains typically categorize blocks as either finalized or not. However, AltLayer takes a more nuanced approach to block finalization, implementing a tiered system. This tiered system empowers end-users to determine the finality status of a transaction based on their chosen security budget. As a block progresses through these various finalization tiers, the level of confidence in its finality gradually increases. Confidence in finality is at its lowest at the execution-level and reaches its peak at the rollup-level.
AltLayer's finalization process comprises three distinct tiers: Execution-level (suitable for a low-security budget), Verification-level (ideal for a medium-security budget), and Rollup-level (tailored for a high-security budget).
Execution-level Finalization: Transaction pool contents are gathered and organized into blocks by block producers. These blocks are subsequently subjected to the consensus protocol. Once the consensus protocol validates and accepts these blocks, along with the transactions they contain, they attain finality at the execution-level.
Verification-level Finalization: Once produced and validated by block producers and the consensus protocol, blocks undergo verification by verifiers, achieving verification-level finalization. Further, stronger finalization occurs when additional verifiers can confirm or reject an update, with more confirmations increasing the likelihood of correctness.
Rollup-Level Finalization: Blocks cleared through quorum consensus undergo a challenge phase, enabling anyone to run their verifier and participate in verification. A challenger may raise a challenge if they detect a discrepancy with the on-chain proposal. A successful challenge invalidates subsequent blocks, triggering a state revert. An unsuccessful challenge results in a stake slash for the challenger.
AltLayer also provides another type of rollups called Flash Layers, which are more tailored towards scalability problems. Flash layers are disposable application-tailored rollups with optional fraud proofs.
With Flash Layers, a dApp developer can do the following
Quickly launch a fast and scalable rollup secured by a Layer 1
Using the rollup for as long as needed and thereby prevent clogging of the Layer 1
Dispose of the rollup by doing an “end-of-life” settlement on the Layer 1.
This optimizes resource utilization significantly as the execution layer, and its resources, are only called upon when the dApp is experiencing high traffic that exceeds the Layer 1 limit. When the demand decreases, the dApp can seamlessly return to operating on Layer 1.
The potential use-cases that can be there are NFT Mint Events, Games, Event Ticketing, and more.
3. Restaked Rollups
This is a new concept proposed in collaboration with EigenLayer. It comprises a set of three vertically integrated Actively Verifiable Services (AVS), created on demand for a given rollup bundle. These AVS collectively offer three key services for rollup applications: decentralized ordering, state correctness verification, and faster finality. This helps with rollup decentralization, security enhancement, and interoperability between rollups, while leveraging Ethereum's trusted network through restaking. The updated rollup bundles consist of three modular components, called:
VITAL (AVS for decentralized rollup state verification)
MACH (AVS for fast finality)
SQUAD (AVS for decentralized sequencing)
Let's take a closer look at these components:
VITAL acts as an integrated verification layer for rollup bundles. It consists of a network of AVS-registered operators who verify all new states proposed by SQUAD operators. VITAL operators detect invalid state roots and can challenge SQUAD operators using the bisection protocol.
In essence, VITAL is a network of operators verifying new states. Unlike the preliminary confirmation provided by the rollup sequencer, the confirmation given by VITAL is much stronger due to its underlying economic incentives. This enables the instant withdrawal of assets. VITAL can also work with optimistic and ZK proofs, where VITAL operators can require SQUAD operators to generate a ZK proof for a disputed state root.
MACH is designed to address the slow finality of rollups by validating rollup blocks and ensuring that blocks are valid according to the rollup's state transition function. Upon detecting an invalid block, MACH operators will raise an alert. If a sufficient number of operators agree with the alert, it can be escalated upstream to dApps.
MACH services for end-users will be provided as an RPC endpoint that reports whether a specific rollup block is considered final. This RPC endpoint can be integrated into any aggregated decentralized application, providing faster and more reliable confirmations. Also MACH will be beneficial for exchanges, bridges, light clients, and other auxiliary services that require streaming access to rollup states and blocks to deliver their products and services.
SQUAD enables nodes operated by EigenLayer AVS operators to register their interest as sequencers for rollups. Once the required number of sequencers has staked the minimum collateral, these sequencers can begin sequencing transactions for the rollup.
To facilitate the discovery of sequencers, SQUAD is designed as a network of nodes that any EigenLayer AVS operators can join, effectively functioning as a full-fledged blockchain with WASM and EVM execution environments. The nodes in SQUAD are referred to as validators, which is typical for any PoS network.
3. Involved Players
3.1 Partnerships and projects that use AltLayer technology
AltLayer has a multitude of partnerships, most of which are integrative in nature, involving either the use of AltLayer's technological stack or the integration of technological stacks from other projects to work with AltLayer. This is a strong indicator of a product offering Rollup- as- a- service. As of September 2023, AltLayer had several partnerships and integrations: EigenLayer, Sovereign SDK, HyperLane, Celestia, Orbiter Finance, Espresso Systems, Radius, Double Jump.Tokyo, Arbitrum Orbit, and other projects associated with AltLayer included: Another World, My Square, Connext, MatchBox, Oveit, BendDAO, Skyark, Port3, Degame, Uforica, Evolv, Chirpley, StratisX, RNS.ID, 3UP, Evolv, Fobo.club, Automata, MySquare NFT, TaskOn, and DF Archon. Now, as of late May 2024, AltLayer has an extensive number of partnerships and integrations, with blog announcements appearing every week, and the Ecosystem section featuring 120 projects across various categories.
3.2 Integration Examples
EigenLayer is an Ethereum restaking protocol. AltLayer and EigenLayer have collaborated together to propose the concept of Restaked rollups, as mentioned earlier. AltLayer has the following restaked rollups currently live on EigenLayer mainnet.
Polyhedra - ZkBridge from Polyhedra Network represents significant progress in the blockchain industry, offering a robust, efficient, and secure cross-network interaction protocol across various layer 1 and layer 2 networks. With the integration of zkBridge, AltLayer rollups can now ensure seamless compatibility with over 30 different layer 1 and layer 2 networks. As part of the partnership, AltLayer plans to join the Polyhedra AVS with restaking for Bitcoin zkBridge.
Injective - integrated MACH from AltLayer for inEVM, which allows deploying and integrating smart contracts compiled to EVM bytecode within the Injective ecosystem, while also ensuring composability through WASM/EVM. MACH from AltLayer will provide restaking-based security in inEVM, benefiting applications running through inEVM.
Brevis is a zero-knowledge co-processor that allows smart contracts to read and utilize complete historical data from any chain and perform customized computations in a trustless manner. Using Brevis, developers can create a variety of data-driven features. AltLayer’s restaked rollups will now be enhanced with the Brevis co-processor. Restaked rollups are our flagship product. By making the Brevis co-processor available for restaked rollups, developers on AltLayer can reliably perform in-chain historical data computations and build data-driven decentralized applications that respond to dynamic data inputs.
Sovereign SDK is an ecosystem of interoperable and scalable rollup packages that can operate on any blockchain. Their SDK is an open-source toolkit for creating zk and optimistic rollup packages. Sovereign SDK is used by protocols such as Haun, 1kx, EigenLayer, and Celestia. In AltLayer, Sovereign is integrated to facilitate the deployment of rollup packages within the Rollups-as-a-Service (RaaS) ecosystem.
HyperLane simplifies the deployment of functional compatibility for any protocol in its blockchain. With permissionless interaction capabilities, users can deploy Hyperlane anywhere and anytime. As a result, blockchain creators and developers can enjoy greater autonomy and quickly make their products available across chains. AltLayer partnered with Hyperlane to provide permissionless compatibility within the AltLayer ecosystem. In addition to the built-in merger bridges, projects using AltLayer's stack can also utilize Hyperlane for inter-merger service deployment and communication.
Celestia is a modular blockchain used by AltLayer for data availability (DA) to address data availability and reliable state verification challenges. AltLayer is configured to support Celestia's DA layer as one of the possible rollup package options created through the AltLayer merger dashboard, reducing the costs required for data availability. As part of the integration, AltLayer developers will extract chain data from Celestia, compress it, and upload it to the Celestia network. This will allow for the complete reconstruction of the state of the rollup using data from Celestia.
Nebra - AltLayer has partnered with Nebra to integrate their advanced Universal Proof Aggregation (UPA) technology into their rollup solutions. UPA by Nebra, the first production-ready universal proof aggregation protocol, is designed to achieve more than a 10-fold reduction in gas costs and composability for zero-knowledge proof verification.
Orbiter Finance acts as a bridge between Ethereum and L2 rollups. Orbiter partnered with AltLayer to address liquidity fragmentation in L2 through functional compatibility tools.
Espresso Systems integrated into the AltLayer stack adds the Espresso Sequencer, a solution for decentralizing the sequencer. Developers can choose whether to deploy their rollup package using AltLayer's decentralized verification solution and/or Espresso Sequencer when deploying within the AltLayer stack. This partnership provides application developers with a straightforward way to launch scalable and customizable L2 layers while ensuring that future users of merged packages benefit from the properties that decentralized sequencer provides.
Radius redefines the decentralization of rollup packages by protecting against MEV, censorship resistance, and financial stability. Along with encryption-based sequencing, this protects users from censorship and MEV risks. As Radius integrates with AltLayer, developers will discover the dual advantages of the user-friendly and efficient AltLayer platform for creating rollup packages combined with encryption-based sequencing provided by Radius.
Double jump.tokyo - a leading Japanese startup in the blockchain gaming and NFT space, has partnered to integrate AltLayer's comprehensive technological stack into Oasys - a blockchain optimized for game development, created by a group of developers, including Double jump.tokyo.
It's worth noting that, in general, AltLayer embraces the web3 gaming narrative and caters to clients in this sphere. AltLayer offers game developers two types of rollup packages: ephemeral and persistent. Ephemeral rollup packages are ideal for event-driven applications that experience rapid demand spikes within a short time frame, such as mini-games or round-based games. On the other hand, persistent rollup packages are best suited for games with a longer lifespan.
Notably, AltLayer's rollup packages (flash layer) have been previously utilized to host popular fully networked games like Dark Forest, attracting a quarter-million transactions per day. AltLayer positions the Flash Layer as a solution suitable for gaming as well.
Arbitrum Orbit is a recently announced permissionless solution developed by the Arbitrum Foundation, enabling developers to create fully customizable Layer 3 secured by Arbitrum One. AltLayer has initiated the integration of support for Arbitrum Orbit and its technological stack on its code-free launch dashboard and will be ready for use in the second quarter of 2023, becoming the first rollup package provider to support Arbitrum Orbit.
Deri Protocol - Deri Protocol is a way to trade derivatives using DeFi: hedging, speculation, arbitrage, all on-chain. With Deri Protocol, trades are executed according to the AMM paradigm, and positions are tokenized as NFTs, making it easy to integrate them with other DeFi projects.
Automata - Automata is a blockchain middleware provider backed by Binance Labs, Jump Crypto, and others. They recently launched a modular attestation layer where attestation is conducted entirely on-chain for off-protocol computations.
Cometh - Cometh is a game studio from France. They have previously collaborated with prestigious clients such as La Française des Jeux (FDJ), Lacoste, FanLive Rugby, and Life Beyond Studios for their Web3 needs.
4. Tokenomics
The functionality of the AltLayer token includes the following:
Economic Bond: The ALT token will be used alongside restaked assets to provide economic stake. This stake can be slashed if malicious behavior is detected.
Governance: ALT token holders can vote on governance decisions.
Protocol Incentivization: Operators in the AltLayer ecosystem can earn ALT tokens as rewards for their services.
Protocol Fees: Network participants will need to pay for intra-network services in ALT tokens.
Additionally, AltLayer has token wrappers - reALT and stALT:
reALT: This stands for "restaked ALT token," an ERC20 interest-bearing token that records the holder’s stake in ALT and accumulates earned rewards through compound interest. The reALT token is issued to users who stake ALT in the main staking pool. It is a reward-bearing token that accumulates restaking rewards.
stALT: This is an ERC1155 token representing the holder’s stake in the main staking pool. The stALT token can be manually converted to reALT through the portal.
5. Who is behind the AltLayer?
Most of the team consists of core team members and developers from Zilliqa, with their experience mainly dating back to 2017, indicating a strong technical background. Additionally, team members have a solid reputation within the crypto industry.
Yaoqi Jia, CEO - In 2019, Yaoqi was named to Forbes "30 Under 30 in Asia." He holds a PhD in Computer Science from the School of Computing at NUS in 2017. Yaoqi led the design and creation of the first publicly accessible blockchain platform with full sharding capabilities, including network, transaction, and smart contract sharding. He also collaborated with Xfers on the StraitsX stablecoin initiative for Southeast Asia and participated in blockchain projects with Mindshare, Singapore Exchange, Hg Exchange, and others. Before Zilliqa, Yaoqi worked at Parity Technologies.
Amrit Kumar, COO - Amrit holds a master's degree in security, cryptography, and coding of information systems. He earned a PhD in Computer Science from the University of Grenoble-Alpes, France, and worked at the Grenoble Informatics Laboratory (Inria). He co-founded and served as the Chief Investments Officer of Zilliqa and is currently the Chief Operating Officer at Alt Research, a research company related to AltLayer.
Tan Jun Hao, Head of Product Engineering - An ex-co-founder and core developer of Zilliqa, Tan Jun Hao was highly active in the Zilliqa community, spanning technical aspects to the DeFi ecosystem and its state. He has been involved in computer security since 2019 and holds a bachelor's degree in computer science with a focus on information security from the National University of Singapore.
Antonio Nunez, Head of Platform Development - Antonio holds a bachelor's degree in physics and computer engineering from Ateneo de Manila University. He has extensive development experience with various languages and tools since 2006 and is an ex-co-founder and senior engineer of Zilliqa.
Dorothy Liu, Head of Growth - Dorothy holds bachelor's degrees in International Business Management and a Master's degree in Marketing. She previously worked as a consultant at Deloitte and served as VP at OSL. With confirmed experience in prestigious companies such as Synthetix and HashKey Trading, Dorothy possesses exceptional knowledge of blockchain's interlayer mechanisms.
Aparna Narayanan, Head of Communications - Previously in Public Affairs & Strategic Communications at APCO Worldwide, Aparna holds bachelor's degrees in economics, management, political science, and public policy. She entered the crypto space in 2019 and progressed from CM to Head of Communications at Zilliqa.
6. Backers
AltLayer boasts backers primarily from Tier 1 category and individuals with a strong reputation in the crypto industry: Polychain Capital, Breyer Capital, Jump, Binance Labs Fund, Hashkey Capital, Bankless Ventures, IOSG Ventures, Primitive Ventures, TRGC, Mask, OKX Ventures, DAO 5, as well as notable figures such as Sean Nevile - co-founder of Circle, Gavin Wood, Balaji Srinivasan - a16z General Partner, Kain Warwick - Synthetix, Ryan Selkis - Messari, Jordan Momtazi - Synthetix, and Bodhi Ventures.
7. Conclusion
In the past cycle of the crypto industry, projects aimed to increase fragmentation in the battle for liquidity and users, striving to claim a dominant position in the market. However, there is now a growing realization that collaboration is essential. Each project has its strengths and weaknesses, as well as a focus on specific user categories and developers. In recent years, there has been a clear trend toward aggregation – dApps, different strategies, liquidity, and modular blockchains have emerged.
AltLayer is a project that aligns with the current times, aiming to provide developers with maximum convenience without the need to expend significant resources, not only on launching their own network but even on implementing it from an SDK. Furthermore, AltLayer offers its own practical technical solutions for various blockchain layers to launch rollups and the ability to utilize other technologies, including modular ones, presenting the product as Rollup as a Service.
Furthermore, AltLayer successfully integrates with new technologies and incorporates them into its stack. This is evident in the integration with EigenLayer - AltLayer quickly offered solutions based on AVS and seamlessly integrated its products for rollups into them.
AltLayer links:
Website | Twitter | Discord | Docs | Medium | GitHub
To help us improve and provide you with the best content possible, we'd appreciate it if you could share your thoughts and opinions on the article you just read. Your feedback is very valuable to us and won't take more than 1 minute.
Also, this post is public so feel free to share it post as well
Thank you so much! ❤️
Our links:
🔗 Website
🐦 Twitter
✉️ Substack
🔸DeBank
🐰 Friend.tech