This is an open piece dedicated to those building the new layers of infrastructure in web3. View it as an open letter, if you will.
Revisiting crypto’s genesis
The way that crypto started has always intrigued me. Especially when I think back on the past 7 years in the industry and the things that I’ve seen. Both as a retail degenerate, as well as someone who works behind the scenes. Though still a degenerate at heart.
What started as a decentralized, peer-to-peer, immutable network called Bitcoin, has grown into a huge ecosystem of innovations that leverage blockchain technology. Crypto. Magic internet money, if you will.
At times, I feel we forget where it all started, and don’t spend enough time looking at where we’re going. What are we actually doing here? Are we just looking for ways to multiply our cash in the shortest amount of time?
No, that’s not it. That can’t be it.
What is the goal?
The goal is to build upon Satoshi’s vision, and usher in a new era of distributed, decentralized networks and systems. It’s about ownership. Breaking down barriers. Creating transparency where it is appropriate while ensuring true privacy where it is wanted.
In the end, we can describe the true goal in one word:
Decentralization
How decentralized is crypto really?
If decentralization is the goal, then I can’t help but ask one simple question: how decentralized is this industry? Have we done a good job at truly breaking down barriers?
The hidden story of layer 2 sequencers
The average layer 2 experience is controlled by a central entity. The power to verify, order, batch, and subsequently post user transactions to the L1, is solely controlled by the company who built the network.
Sequencers carry the task of verifying and ordering transactions on the rollup network. All transactions are batched together and sent to the L1. What’s in it for the sequencers? They earn a small portion of the fees collected from users. Especially with the explosive popularity and adoption of L2s, being the main sequencer becomes highly attractive in terms of revenue. We’re talking millions in revenue.
For a deeper dive into this topic, read: cryptomendo.com/research/the-quest-for-decentralised-sequencers/