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Complaining about the lack of interoperability on Ethereum is fun, but coming up with solutions…not so much. Today, we’ll look at how based rollups and Hyperlane are tackling this problem head on.

Hyperlane chain support:

The chart showcases Hyperlane's impressive growth in active chains throughout 2024, starting with just 15 in January and surpassing 100 in November. This exponential rise highlights Hyperlane's growing adoption as a secure and modular interchain communication protocol.

As of Dec. 12, Hyperlane supports 107 active chains, edging out LayerZero, which connects 105 networks. While both protocols enable seamless interoperability across blockchains, Hyperlane's modular "sovereign consensus" design could be driving this adoption by offering flexibility for developers seeking customizable interchain solutions. In contrast, LayerZero's cross-chain messaging relies on a relayer and oracle architecture. 

Hyperlane’s use of an EigenLayer Actively Validated Services (AVS) will enable Ethereum-native validators to secure cross-rollup communication with economic guarantees. Validators restake ETH or liquid staking tokens, earning rewards at the risk of slashing if fraud occurs. EigenLayer has not yet activated slashing mechanisms for AVSs, but once it does, this economic security mechanism will mitigate fraud risk and accelerate message transfers between rollups, reducing delays from days to minutes.

— Macauley Peterson (X: @yeluacaM | Farcaster: @Macauley)

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The debate around based rollups

Ethereum loves rollups. Of late, “based” rollups are in vogue.

What makes a based rollup special? Based sequencing, ie. deferring sequencing duties to Ethereum L1 validators.

There are two primary reasons why that is preferable: censorship resistance and interoperability. 

Using the L1 as a sequencer ensures the same liveness guarantees as Ethereum L1 blocks and avoids the major complaints of potential censorship surrounding trusted centralized sequencers.

The second advantage is better interoperability. Based rollup proponents such as Justin Drake have in recent months touted this benefit as “synchronous composability,” where transactions in Ethereum are sequenced (or bridged) across different L2s at the same time, within the same block — as if they were all on the same chain. 

Composability and “money legos” aren’t exactly new — they were always some of the core properties sold with the original vision of Ethereum. 

But the fragmented state of rollups today means an Arbitrum transaction is asynchronous with an Optimism transaction, which creates problems around fee uncertainty.

The first and largest existing based rollup in live production today is Taiko, which recently saw a burst in TVL and daily transactions this month.

Other based rollups are also in early production, such as Surge by the Nethermind team and UniFi by the Puffer Finance team, both of which are forks of Taiko.

Based rollups don't come without drawbacks, however. Since execution (ie, sequencing duties) is now being relegated back to L1 block validators, that means based rollups are constrained by the L1’s 12-second block time.

Hence, the purported benefits of based rollups, like synchronous composability, may be easier said than done. Based rollups would require real-time proving within the latency of one slot, without which based rollups cannot execute composable transactions.

To have that kind of fast proof generation in turn brings another technological dependency into the mix, but Brecht Devos, co-founder and CTO of Taiko, remains confident the tech is catching up.

Taiko recently enabled two zk proofs on its rollup by Risc Zero and Succinct Labs, on top of Intel’s SGX trusted execution environment (TEE). This makes it the first multi-proof based rollup in production without reliance on a single trusted party.

“Provers are improving quickly with more TEEs, faster and cheaper zkVMs and AVSs that can be used. We think the zk development is going very well and the sub-slot latency for proving is not far off,” Devos told Blockworks.

One other supposed disadvantage of based rollups is a loss of MEV as a key “revenue” stream, due to the lack of a centralized sequencer. Yet there are nifty workarounds available, Devos said.

On Taiko, “MEV can also be captured by auctioning ‘execution tickets’ to L1 block proposers,” Devos told Blockworks.

As such, while based rollups by default give up sequencing rights to L1 validators, it doesn’t necessarily have to be the case.

— Donovan Choy (X: @donovanchoy | Farcaster: @donovan)

EVM renaissance incoming? Monad, MegaETH, Berachain

Danny Knettel: Monad has also been doing a lot pre-launch, namely fostering startups and having competitions to encourage builders. It’s different from what we’ve seen from any other chain previously. Based on what we see now, Monad should have a vibrant ecosystem of apps on launch, compared to other mainnet launches.

Dan Smith: I’m bearish on Berachain, because of products like Eden, which is apparently the first sexual product built on a blockchain. Is it different? Yes. Is it cool? You decide. I’m interested in blockchains as asset ledgers facilitating the transfer of financial assets. That’s what gets me out of bed, pun intended. Call me a hater.

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Emerging technologies including AI and blockchain are set to transform society, but they often involve sensitive information. For these technologies to realize their full potential, private data sharing and privacy-preserving computation are essential prerequisites.

In the latest report from Blockworks Research, analyst Daniel Shapiro breaks down how emerging Privacy-Enhancing Technologies (PETs) could enable secure collaboration without compromising privacy, making it possible for individuals and organizations to leverage data across partners, users, and systems.

• Polygon proposes rehypothecating $1.3b in bridge stablecoins into Maker's sUSDS and Morpho Vaults, aiming to yield $70m for ecosystem incentives. Critics highlight risks of protocol hacks, regulatory scrutiny and potential devaluation of bridged assets. While innovative, concerns linger about pushing DeFi composability boundaries without opt-in safeguards.

• Cronos completed its Pallene upgrade Thursday, which the team says boosts its EVM transaction execution by 600x to 60,000 TPS. Other changes include enhancements to scaleability of IBC and the Cosmos SDK, with an eye towards empowering AI agents, DeFi and gaming applications.

• Treasure launched its layer-2 mainnet on ZKsync's Elastic Chain, empowering decentralized gaming with MAGIC token, interoperable tools and player-driven economies. The migration includes 15+ games, assets and NFTs, simplifying onboarding with Treasure Connect and innovative Game Exchange (GEX) features.