Author: Dewhales Research
Compiled by: TechFlow
AltLayer has evolved from aggregating boxed zk solutions to launching proprietary technology to scale and accelerate web3 based on restaking. Let’s dive into this with an application example!
1 Introduction
In the evolving landscape of blockchain, scalability and customization have become major concerns for application developers. With the growing popularity of ZK Rollups and Optimistic Rollups, there is a clear need for solutions that allow developers to scale their applications while maintaining flexibility and control.
ZK Rollups and Optimistic Rollups have gained a lot of attention in the blockchain field in recent years due to their ability to significantly improve the throughput and efficiency of existing blockchains such as Ethereum. However, despite their promise, these rollup technologies also bring their own challenges, especially in terms of accessibility, customization, centralization of sorters, soft finality, liquidity fragmentation, etc.
This is where AltLayer comes in. Unlike existing options available to application builders today, AltLayer offers Rollups-as-a-Service (RaaS) to developers seeking actual control over their rollup solutions. RaaS allows developers to directly manage their rollups, providing a high degree of customization and control over their blockchain infrastructure.
However, what really sets AltLayer apart is its new re-staking Rollup framework, which introduces re-staking into rollups. RaaS combined with the Re-Staking Rollup framework enables anyone, including individuals with little to no programming experience, to create their own custom blockchain execution layer in minutes and bring additional security and decentralization to their rollup change. This remarkable feature bridges the gap between technical and non-technical users, making AltLayer an accessible option for a wide range of application builders.
In this article, we will take a deep dive into the mechanics and potential of AltLayer, exploring how it can serve as a Rollup-as-a-Service solution in the rapidly evolving blockchain landscape.
2.Rollup Hub
AltLayer is a Rollup-as-a-Service protocol for developers to launch their own Layer 2 (imagine launching an application-specific version of Optimism, zkSync, Arbitrum, etc.). AltLayer provides:
Provide SDK for developers who want to manage rollups themselves
No-code dashboard that allows anyone to launch a custom execution layer in 2 minutes with a few simple clicks
Basically, AltLayer is a decentralized rollup hub that allows individuals to roll out their own L2 solutions to suit their needs. However, questions may arise regarding the types of execution methods available, rollup speeds, general/special rollups, etc.
AltLayer allows ZK Rollups and Optimistic Rollups to be launched using EVM, WASM, or other runtime environments to meet general or application-specific purposes. Users can fully customize their rollups according to their needs and preferences.
Figure 1: Benefits of AltLayer’s Rollup-as-aService product. Source: docs.altlayer.io
As mentioned above, AltLayer allows for rapid deployment in minutes, with a process similar to deployment on a general-purpose chain. AltLayer rollups do not require hundreds of validators to ensure security (such as Cosmos SDK) because they use an underlying chain (Layer 1) as a security layer.
AltLayer is designed with modularity at its core, enabling end users to customize rollup solutions based on their preferences. This flexibility extends to the choice of runtime environment, including options such as EVM, WASM, etc. In addition, users can choose their preferred data availability layer, whether it is an L1 blockchain or a data layer like Celestia. AltLayer also allows users to choose their preferred settlement layer, such as Ethereum or Arbitrum One.
Figure 2: RaaS architecture. Source: docs.altlayer.io
The main problem faced by most rollups is the decentralization of sorters (the ordering and processing of transactions). However, AltLayer is operated by a decentralized network of sorters. These sorters are selected from a network of sorters called SQUAD based on their stake and some randomness. We will discuss SQUAD in detail in the next section.
Finally, a core feature worth mentioning is hierarchical finality. Traditional blockchains typically classify blocks as finalized or unfinalized. However, AltLayer takes a more nuanced approach to block finalization, implementing a tiered system. This tiered system enables end users to determine the finality of a transaction based on the security budget they choose. As a block passes through these different tiers of finality, the confidence in the finality gradually increases. The confidence in the finality is lowest at the execution level and culminates at the rollup level.
AltLayer’s final confirmation process includes three different levels: execution level (suitable for low security budgets), verification level (suitable for medium security budgets), and rollup level (suitable for high security budgets).
Execution-level finality: The transaction pool contents are collected and organized into blocks by block producers. These blocks are then submitted to the consensus protocol. Once the consensus protocol verifies and accepts these blocks and the transactions they contain, they receive finality at the execution level.
Validation-level finality: Once a block produced and validated by the block producers and consensus protocol is validated by validators, validation-level finality is achieved. Further, stronger finality occurs when more validators are able to confirm or reject the update, and more confirmations increase the likelihood of correctness.
Rollup-level finalization: Blocks cleared by arbitration consensus will go through a challenge phase, where anyone can run their validator and participate in the validation. If a discrepancy is found in the on-chain proposal, the challenger can raise a challenge. A successful challenge will invalidate subsequent blocks and trigger a state rollback. An unsuccessful challenge will result in the challenger's stake being slashed.
AltLayer also offers another type of rollup, called Flash Layers, which are better suited to address scalability issues. Flash Layers are one-off, application-customized rollups with optional fraud proofs.
With Flash Layers, dApp developers can:
Quickly launch a fast and scalable rollup secured by Layer 1
Use rollup when needed to prevent Layer 1 congestion
Rollups are processed by performing “final settlement” on Layer 1
This significantly optimizes resource utilization, as the execution layer and its resources are only called upon when the dApp experiences high traffic that exceeds Layer 1 limits. When demand decreases, dApps can seamlessly return to Layer 1 operations.
Potential use cases include NFT minting events, gaming, event ticketing, and more.
Figure 3: Flash layer rollups. Source: docs.altlayer.io
3. Re-staking Rollups
This is a new concept proposed in collaboration with EigenLayer. It includes a set of three vertically integrated active verifiable services (AVS) created on demand for a given rollup package. Together, these AVS provide three key services for rollup applications: decentralized ordering, state correctness verification, and faster finality. This contributes to the decentralization of rollups, security enhancements, and interoperability between rollups, while leveraging Ethereum's trusted network through re-staking. The updated rollup package consists of three modular components, namely:
VITAL (AVS for decentralized rollup state verification)
MACH (AVS for Fast Finality)
SQUAD (AVS for Decentralized Sorting)
Figure 4: Restaked rollups. Source: altlayer.io/restaked-rollups
Let's take a closer look at these components:
VITAL acts as an integrated verification layer for rollup packages. It consists of a network of AVS registered operators who verify all new states proposed by SQUAD operators. VITAL operators detect invalid state roots and can challenge SQUAD operators using a bipartite protocol.
Essentially, VITAL is a network of operators that validate new states. Unlike the initial confirmation provided by rollup sequencers, the confirmation provided by VITAL is more powerful due to its underlying economic incentives. This enables instant asset withdrawals. VITAL can also work with optimistic and ZK proofs, where VITAL operators can ask SQUAD operators to generate ZK proofs for disputed state roots.
Figure 5: VITAL. Source: blog.altlayer.io
MACH aims to solve the slow finality problem of rollup by validating rollup blocks and ensuring that the blocks are valid according to the state transition function of the rollup. Once an invalid block is detected, MACH operators will issue an alert. If enough operators agree with the alert, it can be upgraded to upstream dApps.
The MACH service will be available to end users as an RPC endpoint that reports whether a specific rollup block is considered final. This RPC endpoint can be integrated into any aggregated decentralized application, providing faster and more reliable confirmations. In addition, MACH will be beneficial to exchanges, bridges, light clients, and other auxiliary services that need streaming access to rollup states and blocks to deliver their products and services.
Figure 6: MACH. Source: blog.altlayer.io
SQUAD enables nodes operated by EigenLayer AVS operators to register their interest in being a rollup sorter. Once the required number of sorters have staked the minimum collateral, these sorters can begin sorting transactions for the rollup.
To facilitate sorter discovery, SQUAD is designed as a network of nodes that any EigenLayer AVS operator can join, effectively acting as a full blockchain with WASM and EVM execution environments. Nodes in SQUAD are called validators, which is typical in any PoS network.
Figure 7: SQUAD. Source: blog.altlayer.io
4. Relevant Participants
Partners and projects using AltLayer technology
AltLayer has a large number of partners, most of which are of an integration nature, involving the use of AltLayer's technology stack or integrating with other projects' technology stacks to collaborate with AltLayer. This is a strong indicator of providing a Rollup-as-a-Service product. As of September 2023, AltLayer has multiple partners and integrations: EigenLayer, Sovereign SDK, HyperLane, Celestia, Orbiter Finance, Espresso Systems, Radius, Double Jump.Tokyo, Arbitrum Orbit.
Other projects related to AltLayer include: Another World, My Square, Connext, MatchBox, Oveit, BendDAO, Skyark, Port3, Degame, Uforica, Evolv, Chirpley, StratisX, RNS.ID, 3UP, Evolv, Fobo.club, Automata, MySquare NFT, TaskOn and DF Archon. By the end of May 2024, AltLayer has a large number of partners and integrations, with weekly blog announcements, and the ecosystem section covers 120 projects in different categories.
Figure 8: AltLayer ecosystem. Source: altlayer.io
Integration Examples
EigenLayer is an Ethereum re-staking protocol. As mentioned above, AltLayer and EigenLayer jointly proposed the concept of re-staking rollup. AltLayer currently has the following re-staking rollups on the EigenLayer mainnet:
Polyhedra: ZkBridge from Polyhedra Network has made significant progress in the blockchain industry, providing a powerful, efficient and secure cross-network interaction protocol covering multiple Layer 1 and Layer 2 networks. By integrating zkBridge, AltLayer rollup now ensures seamless compatibility with over 30 different Layer 1 and Layer 2 networks. As part of the collaboration, AltLayer plans to join Polyhedra AVS to re-stake Bitcoin zkBridge.
Injective: Integrates AltLayer’s MACH for inEVM, allowing smart contracts compiled to EVM bytecode to be deployed and integrated in the Injective ecosystem while ensuring composability through WASM/EVM. AltLayer’s MACH will provide re-staking-based security in inEVM, benefiting applications running through inEVM.
Brevis: Brevis is a zero-knowledge coprocessor that allows smart contracts to read and utilize the complete historical data of any chain and perform custom calculations in a trusted manner. Using Brevis, developers can create a variety of data-driven functions. AltLayer's re-staking rollup will now be enhanced by the Brevis coprocessor. Re-staking rollup is our flagship product. By making the Brevis coprocessor available for re-staking rollup, developers on AltLayer can reliably perform in-chain historical data calculations and build data-driven decentralized applications that respond to dynamic data inputs.
Sovereign SDK: This is an interoperable and scalable rollup package ecosystem that can run on any blockchain. Their SDK is an open source toolkit for creating zk and optimistic rollup packages. The Sovereign SDK is used by protocols such as Haun, 1kx, EigenLayer, and Celestia. In AltLayer, Sovereign is integrated to facilitate the deployment of rollup packages in the Rollups-as-a-Service (RaaS) ecosystem.
HyperLane: Simplifies the deployment of functional compatibility on its blockchain. With the permission interaction function, users can deploy Hyperlane anytime and anywhere. As a result, blockchain creators and developers can enjoy greater autonomy and quickly make their products available on various chains. AltLayer has partnered with Hyperlane to provide permission compatibility in the AltLayer ecosystem. In addition to the built-in merge bridge, projects using the AltLayer technology stack can also leverage Hyperlane for merged service deployment and communication.
Celestia: A modular blockchain used by AltLayer for data availability (DA) to address data availability and reliable state verification challenges. AltLayer is configured to support Celestia's DA layer as one of the possible options for rollup packages created through the AltLayer merge dashboard, reducing the cost required for data availability. As part of the integration, AltLayer developers will extract chain data from Celestia, compress it, and upload it to the Celestia network. This will allow the state of the rollup to be fully reconstructed using Celestia's data.
Nebra: AltLayer has partnered with Nebra to integrate its advanced Universal Proof Aggregation (UPA) technology into its rollup solution. Nebra’s UPA is the first production-ready Universal Proof Aggregation protocol designed to achieve over 10x gas fee reduction and composability of zero-knowledge proof verification.
Orbiter Finance: Serving as a bridge between Ethereum and L2 rollup. Orbiter works with AltLayer to solve the liquidity fragmentation problem in L2 through functional compatible tools.
Espresso Systems: Integrated into the AltLayer stack, adding the Espresso sorter, a decentralized sorter solution. Developers can choose to use AltLayer's decentralized verification solution and/or the Espresso sorter when deploying rollup packages in the AltLayer stack. This partnership provides application developers with an easy way to launch a scalable and customizable L2 layer, while ensuring that future users of rollups benefit from the properties provided by the decentralized sorter.
Radius: Redefines the decentralization of rollup packages by protecting them from the threat of MEV, censorship resistance, and financial stability. Through cryptographic-based ordering, this protects users from censorship and MEV risks. With the integration of Radius with AltLayer, developers will find the dual advantages of the user-friendliness and efficiency of the AltLayer platform combined with the cryptographic-based ordering provided by Radius.
Double jump.tokyo: Japan’s leading blockchain gaming and NFT startup, has partnered with AltLayer to integrate its comprehensive technology stack into Oasys, a blockchain optimized for game development created by a group of developers including Double jump.tokyo.
It is worth noting that AltLayer embraces the web3 gaming narrative in general and caters to customers in this space. AltLayer offers two types of rollup packages for game developers: short-lived and persistent. Short-lived rollup packages are ideal for event-driven applications that experience rapid demand spikes in a short period of time, such as mini-games or turn-based games. On the other hand, persistent rollup packages are best suited for games with longer life cycles.
Secondly, AltLayer’s rollup package (Mountain Layer) has been used to host popular full-network games such as Dark Forest, which attracts 250,000 transactions per day. AltLayer positions Flash Layer as a solution suitable for gaming.
Arbitrum Orbit: A permissioned solution recently announced by the Arbitrum Foundation that enables developers to create fully customizable Layer 3s secured by Arbitrum One. AltLayer has begun integrating support for Arbitrum Orbit and its tech stack on its no-code startup dashboard and will be ready for use in Q2 2023, becoming the first rollup provider to support Arbitrum Orbit.
Deri Protocol: Deri Protocol is a way to trade derivatives using DeFi: hedging, speculation, arbitrage, all on-chain. Through Deri Protocol, transactions are executed according to the AMM paradigm and positions are tokenized as NFTs, making them easy to integrate with other DeFi projects.
Automata: Automata is a blockchain middleware provider backed by Binance Labs, Jump Crypto, etc. They recently launched a modular proof layer where proofs are done entirely on-chain for off-protocol computations.
Cometh: Cometh is a French gaming studio. They have previously worked with high-profile clients such as La Française des Jeux (FDJ), Lacoste, FanLive Rugby, and Life Beyond Studios for their Web3 needs.
5. Token Economics
AltLayer token features include:
Economic Bond: ALT tokens will be used along with re-pledged assets to provide economic collateral. This collateral can be slashed if malicious behavior is detected.
Governance: ALT token holders can vote on governance decisions.
Protocol Incentives: Operators in the AltLayer ecosystem can earn ALT tokens as rewards by providing services.
Protocol Fees: Network participants need to pay ALT tokens to use services within the network.
Additionally, AltLayer has token wrappers — reALT and stALT:
reALT: stands for "re-staked ALT token", an ERC20 interest-bearing token that records the holder's stake in ALT and accumulates rewards through compound interest. reALT tokens are issued to users who stake ALT in the main staking pool. It is a reward token that accumulates re-staking rewards.
stALT: This is an ERC1155 token that represents the holder’s stake in the main staking pool. stALT tokens can be manually converted to reALT through the portal.
6. Who is behind AltLayer?
Most of the team members and developers are from Zilliqa, and their experience mainly dates back to 2017, indicating that they have a strong technical background. In addition, the team members have a good reputation within the crypto industry.
Yaoqi Jia, CEO. Yaoqi was named one of Forbes' "30 Under 30 Asia" in 2019. He received his PhD in Computer Science from the School of Computing at the National University of Singapore in 2017. Yaoqi led the design and creation of the first publicly accessible blockchain platform with full sharding capabilities, including network, transaction, and smart contract sharding. He also worked with Xfers on the StraitsX stablecoin project in Southeast Asia, and has been involved in blockchain projects with Mindshare, Singapore Exchange, Hg Exchange, and others. Prior to Zilliqa, Yaoqi worked at Parity Technologies.
Amrit Kumar, COO. Amrit holds a Master’s degree in Information Systems Security, Cryptography and Coding, and a PhD in Computer Science from Grenoble Alpes University, France, and has worked at the Grenoble Informatics Laboratory (Inria). He co-founded and served as Chief Investment Officer of Zilliqa, and is currently the COO of Alt Research, a research firm associated with AltLayer.
Tan Jun Hao, Head of Product Engineering. Tan Jun Hao is the former co-founder and core developer of Zilliqa, and he is very active in the Zilliqa community, ranging from technical aspects to the DeFi ecosystem and its status. He has been working in computer security since 2019 and holds a Bachelor of Computer Science with a focus on Information Security from the National University of Singapore.
Antonio Nunez, Head of Platform Development. Antonio holds a bachelor’s degree in Physics and Computer Engineering from Ateneo de Manila University. He has extensive development experience in various languages and tools and is the former co-founder and senior engineer of Zilliqa since 2006.
Dorothy Liu, Head of Growth. Dorothy holds a Bachelor’s degree in International Business Management and a Master’s degree in Marketing. She has worked as a consultant at Deloitte and is a Vice President at OSL. With experience at well-known companies such as Synthetix and HashKey Trading, Dorothy has an excellent understanding of the inter-layer mechanisms of blockchain.
Aparna Narayanan, Head of Communications. Aparna previously worked in public affairs and strategic communications at APCO Worldwide and holds a bachelor’s degree in Economics, Management, Political Science, and Public Policy. She entered the crypto space in 2019 and rose through the ranks from Community Manager to Head of Communications at Zilliqa.
7. Supporters
AltLayer's supporters mainly come from Tier 1 and individuals with good reputations in the crypto industry: Polychain Capital, Breyer Capital, Jump, Binance Labs Fund, Hashkey Capital, Bankless Ventures, IOSG Ventures, Primitive Ventures, TRGC, Mask, OKX Ventures, DAO 5. And well-known people such as Circle co-founder Sean Nevile, Gavin Wood, a16z general partner Balaji Srinivasan, Synthetix's Kain Warwick, Messari's Ryan Selkis, Synthetix's Jordan Momtazi and Bodhi Ventures.
Figure 10: AltLayer supporters. Source: altlayer.io
8. Conclusion
In past cycles of the cryptocurrency industry, projects have aimed to increase fragmentation in the process of competing for liquidity and users, striving to dominate the market. However, now there is a growing recognition that cooperation is essential. Each project has its own strengths and weaknesses, and also focuses on specific user categories and developers. In recent years, there has been a clear trend of convergence, and dApps, different strategies, liquidity and modular blockchains have emerged.
AltLayer is a project that keeps pace with the times and aims to provide developers with the greatest convenience without spending a lot of resources, not only for launching their own network, but also for implementing it from the SDK. In addition, AltLayer provides its own practical technical solutions for various blockchain layers to launch rollups, and is able to leverage other technologies (including modular technologies) to present products as Rollup as a Service.
Additionally, AltLayer successfully integrates with new technologies and incorporates them into its stack. This was evident in its integration with EigenLayer, where AltLayer quickly provided an AVS-based solution and seamlessly integrated its product for rollups into it.