james ding
January 25, 2025 15:00
The ‘foundation’ movement is reshaping Ethereum and addressing fragmentation through innovations such as foundation sequencing. Learn about the Ethereum ecosystem and its impact on the future of blockchain technology.
The Ethereum network is undergoing a transformation phase known as the ‘foundation’ movement, which addresses long-standing fragmentation issues within the ecosystem. According to the SSV team, this innovative approach, specifically through underlying sequencing and pre-verification, is set to redefine how applications and services operate on Ethereum’s Layer 1.
Understanding fragmentation issues
Fragmentation emerged as a significant challenge with the advent of rollups, which were developed to provide cheaper transactions and improve throughput. Despite its advantages, rollups inadvertently create silos, each with their own developer ecosystem and liquidity pools, breaking away from the interoperability and shared liquidity known as Ethereum’s Layer 1.
The rollup-centric roadmap introduces solutions like Optimistic and ZK-rollup, which process off-chain transactions to alleviate congestion. However, liquidity fragmentation across various rollups, currently estimated at $44 billion, has disrupted composability, increasing the risk for users having to navigate multiple rollups and associated smart contract risks.
Block construction and sequencing
In addition to rollup fragmentation, the block-building ecosystem faces the challenge of several sidecars, such as MEV, that can compromise network security and increase complexity. This is especially difficult for home stakers who prefer large-scale staking protocols as they cannot run multiple sidecars.
Sequencing plays an important role in managing transaction order within Layer 2 protocols. Different rollups use different ordering methods, which introduces risks associated with centralization and censorship. However, based sequencing offers a promising solution by leveraging Ethereum’s validator set for improved decentralization and reduced fees.
Base exercise description
The ‘foundation’ movement is not a new concept within blockchain, but it has gained momentum as a solution to Ethereum’s scalability issues. By leveraging Ethereum’s validator set, underlying sequencing allows for decentralized transaction processing that preserves network effects while minimizing historical blocking factors such as high fees.
Pre-confirmation further complements this approach by allowing validators to commit to transaction inclusion, reducing confirmation delays and improving user experience. These innovations are further advancing the underlying ecosystem, with several projects already underway and more expected by 2025.
Implications for the future of Ethereum
The underlying movement has the potential to expand beyond layer 2 solutions, providing a framework for bootstrapping applications and services directly at layer 1 of Ethereum. This establishes shared security standards across the network, promotes frictionless interoperability, and encourages developers to choose Ethereum over fragmented subs. -Ecosystem.
An infrastructure layer that connects Ethereum’s validator set directly to your application can reduce operational complexity and simplify the bootstrapping process. As the underlying ecosystem evolves, platforms like SSV Network are poised to play a pivotal role in enhancing the functionality of the Ethereum network by leveraging distributed verification technology.
Image source: Shutterstock