Ethereum Layer 2 Executives Propose Rollup Upgrades to Strengthen Base Layer Integration

• MEV revenue redistribution to Ethereum base layer may boost ETH price, despite slower 12-second confirmations.
• FABRIC standards aim to unify rollup implementations, prioritizing long-term ecosystem cohesion over short-term sequencer profits.

Executives from major Ethereum layer 2 networks have endorsed upgrades called “based rollups” and “native rollups” to improve Ethereum’s security and reduce ecosystem fragmentation.

The proposal, discussed during a January 25 call with Ethereum founders, seeks to align layer 2 transaction processing with Ethereum’s base layer. Base lead Jesse Pollak stated that based rollups could enhance security by linking layer 2 operations more directly to Ethereum’s decentralized validator network.

Based rollups, a concept proposed by Ethereum developer Justin Drake in 2023, transfer transaction sequencing from private layer 2 operators to Ethereum’s base layer. This shift would replace centralized sequencers—systems currently used by networks like Arbitrum, Optimism, and Base—with Ethereum’s validators. 

Arbitrum and Base have generated $210 million and $96.2 million, respectively, from sequencer fees, according to Dune Analytics. However, reliance on centralized sequencers has led to concerns about network decentralization.

Native rollups aim to standardize transaction execution across Ethereum’s layers, improving interoperability. Both upgrades could redirect profits from Maximum Extractable Value (MEV)—revenue generated by transaction ordering—to Ethereum’s base layer. This shift might influence Ether’s market value, though decentralized sequencing would increase transaction confirmation times from one second to 12 seconds.  

Optimism’s Ben Jones framed the effort as urgent, calling for collaboration “in war time.” Meanwhile, Taiko CEO Daniel Wang confirmed support for FABRIC, a technical standard designed to unify based rollup implementations. Taiko became the first layer 2 to test based rollups in June 2023, addressing cross-chain compatibility issues.

“We’ve been waiting for the FABRIC standards so we can work together and provide a full solution,” Ethereum layer 2 Taiko’s CEO Daniel Wang said.

Adopting these upgrades would require layer 2s to surrender a large portion of sequencer-derived revenue. Proponents argue the trade-off—greater decentralization and base-layer revenue redistribution—justifies the cost. Current discussions reflect Ethereum’s broader prioritization of scalability solutions that preserve its foundational decentralized structure.

The first ever based rollup—Taiko—is live!

the endgame is based pic.twitter.com/v3Aqa4w1od

— Justin.eth Drake (@drakefjustin) June 6, 2024

The push for based and native rollups highlights ongoing debates over balancing speed, profit, and decentralization. As layer 2 networks experiment with these models, their decisions could reshape the economic flow between Ethereum’s layers and influence long-term network growth.  

Technical standards like FABRIC may accelerate adoption, but implementation timelines remain unclear. Stakeholders now face a choice: retain short-term profits from centralized systems or prioritize integration with Ethereum’s base layer for long-term cohesion.

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