Espresso First Look: Enhancing Decentralization and Security

July 3, 2024

What is Espresso?

Espresso is a shared sequencing marketplace, consensus mechanism (HotShot) and data availability layer (Tiramisu DA). It can be used by any L2 or application built on Ethereum, but is, arguably, especially beneficial to rollups, due to the commonality between rollups in their need for sequencing and data availability as well as guarantees about both of these.

Sequencer Marketplace

Rollups, among other applications built on Ethereum, have sequencers – actors that are responsible for ordering transactions they receive. Typically, this is a trusted role, meaning that users rely on the honesty and integrity of the sequencer not to take advantage of their transaction or otherwise interfere with it. In many cases, sequencing is performed by the rollup (or application) itself and transactions are sequenced on a first-in-first-out (FIFO) basis.

As an example, the following diagram was taken from Arbtirum – a rollup platform built on Ethereum. The diagram shows transactions (tx, at top, left) submitted on the rollup to the sequencer and the resulting batch of transactions (see top, right – “sequenced txs”) being both sent to the L1 (Ethereum) and used to update the state of the rollup:

(Source)

Espresso has created a sequencer marketplace – where a group of sequencers bid for the right to sequence these transactions. Rollups and other apps can sell the sequencing task on their protocol to this group of decentralized sequencers.

The sequencing phase is broken down into three parts: bidding, assignment, and sequencing. A pool of decentralized sequencers on the Espresso platform bid on the right to sequence transactions. An auction solver provides a solution that assigns at most one sequencer per rollup. After this assignment phase, the winning sequencer(s) create bundle payloads and implicitly sequence the transactions.

HotShot Finality Mechanism

HotShot is the name of the consensus mechanism on Espresso. Consensus must be reached by operators on the results of the sequencing auction as well as the resulting L2 blocks. Due to the design of HotShot and the fact that there is no execution of transactions, finality is achievable within seconds. Once finality is reached, L2s have guarantees similar to those offered on Ethereum – for finality to be broken an attacker would need more than a third of the stake.

CDN + P2P: Espresso’s Hybrid Networking Approach

One of the key contributors to Espresso’s performance is its hybrid network approach used by both HotShot and Tiramisu DA. The idea is to use a content delivery network (CDN) optimistically, i.e., under normal circumstances, that resembles Web2 network architecture, i.e., hubs communicating with spokes (i.e., one-to-many) and to fall back to a slower, but reliable P2P network in the event of failures. This dual model allows for high performance and resilience (for more see Espresso’s white paper).

Tiramisu DA

Tiramisu DA is the data availability (DA) component of Espresso and is similar in concept to Danksharding on Ethereum, Eigen DA, or Celestia, for example. The fact that data availability is separated from consensus contributes to HotShot’s speed.

A helpful way to think about Tiramisu DA is that it starts with a basic approach to data availability that looks similar to Danksharding; though Tiramisu DA uses verifiable information dispersal (VID), which has some nice retrievability properties. It then layers on additional pieces that increase performance. For example, using a small DA committee to serve full data greatly improves performance. The protocol itself reverts to the slower-performing base layer if the DA committee is unable to serve the data.

(Source)

​​Espresso as an EigenLayer AVS

Decentralization and Enhanced Security:

By decentralizing the sequencer role, Espresso allows rollups, L2s, and other applications to move toward a more trustless, Web3 model. More specifically, some of the benefits of decentralized sequencing include: eliminating potential single points of failure, removing monopolistic behaviors, supporting fair ordering and private mempools, promoting interoperability, and potentially creating more revenue for roll ups and L2s (for more see here).

By using restaked Ether (ETH) to secure Espresso and tailoring slashing conditions to the needs of the protocol, the security guarantees of Espresso can approach those of Ethereum itself, but with much higher performance, i.e., finality within seconds, in the optimistic case.

Espresso’s role as an EigenLayer Active Validator Service (AVS) is pivotal. By incorporating restaking, Espresso not only diversifies its validation efforts but also aligns closely with Ethereum’s security model. This alignment allows Espresso to bootstrap and amplify the economic security of the network efficiently. Restaking via the Espresso Sequencer will leverage Ethereum’s vast staked capital and its decentralized validator set, which are essential for optimizing node utilization and enhancing overall capital efficiency.

The Espresso Team

The Espresso team is composed of experts who bring together a deep understanding of blockchain architecture, and the two co-founders are named Ben Fisch and Benedikt Bünz.

The Espresso Systems team has a diverse and accomplished background, bringing together expertise from various sectors. The diverse skillset and knowledge base of the Espresso Systems team equips them to innovate in their pursuit of advancing blockchain privacy and scalability solutions.

Figment involvement With Espresso

Figment is currently running four sequencer nodes and one data availability node on Espresso’s Cappuccino testnet and intends to be an operator on mainnet when Espresso launches, toward the end of the year/early next year.

Espresso Future Developments

The Espresso Systems team is actively working on enhancing the scalability and efficiency of the HotShot consensus protocol, which will further optimize node utilization and boost overall network performance. These collaborations will not only enhance the security and decentralization of Espresso but also contribute to the overall stability and growth of the Ethereum network. Stay tuned for more updates on Espresso’s mainnet.

Figment is the leading provider of staking infrastructure. Figment provides the complete staking solution for over 500 institutional clients, including asset managers, exchanges, wallets, foundations, custodians, and large token holders, to earn rewards on their digital assets. On Ethereum, Figment is the largest non-custodial staking provider of staked ETH. Institutional staking services from Figment include seamless point-and-click staking, portfolio reward tracking, API integrations, audited infrastructure, and slashing protection. This all leads to Figment’s mission to support the adoption, growth, and long-term success of the digital asset ecosystem. To learn more about Figment, please visit figment.io.

The information herein is being provided to you for general informational purposes only. It is not intended to be, nor should it be relied upon as, legal, business, tax, or investment advice. Figment undertakes no obligation to update the information herein.

SHARE POST

Meet with us

Bring the Complete Staking Solution to Your Organization

Hidden

Figment respects your privacy. By submitting this form, you are acknowledging that you have read and agree to our Privacy Policy, which details how we collect and use your information.