Puffer UniFi is a pioneering Based Rollup solution, addressing the issue of fragmented liquidity on layer-2, while increasing interaction capabilities and improving transaction speeds up to 100ms on Ethereum.
Puffer Finance deploys Puffer UniFi to build the first Based Rollup on Ethereum
Puffer Finance (https://coin68.com/puffer-finance-la-gi/) - the liquid restaking (https://coin68.com/liquid-restaking-la-gi/#:~:text=Liquid%20Restaking%20l%C3%A0%20c%C6%A1%20ch%E1%BA%BF,Jito%2C%20Mantle%2C...) protocol integrated into Eigenlayer (https://coin68.com/eigenlayer-la-gi/) - has deployed the first Based Rollup on Ethereum (https://coin68.com/ethereum-la-gi/) called Puffer UniFi to connect and address liquidity fragmentation issues on layer-2.
— Puffer Finance 🐡 (@puffer_finance) July 5, 2024 (https://twitter.com/puffer_finance/status/1809266347756703944?ref_src=twsrc%5Etfw)
In the context of the continuous development of layer-2 (L2) on Ethereum, significant progress is being made in solving the scalability problem on Ethereum.
However, the increasing presence of layer-2s has also led to a fragmented liquidity ecosystem. This reduces the efficiency of different asset types on different layer-2s, affecting user experience due to dependency on complex bridges. Moreover, this creates difficulties for developers to integrate and maintain their dApps on too many L2s, which affects the potential for further expansion and development on Ethereum.
Puffer UniFi is a Based Rollup deployed by Puffer Finance, built to address fragmentation issues in the Ethereum ecosystem by connecting various layer-2s.
Based Rollup is a Rollup integrated with Ethereum’s verifier and supports the ability to synchronize and directly interact between separate layer-2 Rollups in the same block. This helps users avoid the need to use complex bridges to transfer assets between different rollups, reducing latency and increasing transaction speeds.
Imagine you have two neighborhoods in a city, each neighborhood representing a rollup. Instead of having to cross a big road (bridge) to move from one neighborhood to another, you can move directly between them through tunnels that connect these two neighborhoods together.
Puffer Finance’s UniFi uses Ethereum’s sequencing to order transactions in the rollup and transactions are processed with high security. UniFi integrates the preconfirmation mechanism to provide users with transaction speeds of only about 100ms.
Transaction verification mechanism on UniFi. Source: Puffer Finance
Specifically, transactions will be preconfirmed by Puffer Restaked Validators, and then the Puffer protocol will arrange the transactions and send them to the UniFi OP Stack for further processing. The transactions are packaged into batch rollups and proposed as blocks on Ethereum’s layer 1.
Some applications that UniFi brings:
• Reduced ETH inflation: Contention fees that layer-2s will pay to be preverified on UniFi will be sent to Ethereum, helping to burn more ETH when features like MEV-Burn are implemented.
• Feeless transactions: UniFi uses native yield pufETH to pay for gas fees, enabling feeless transactions on based app-chains.
• Based App-chains Ecosystem: Developers can build App-chains on UniFi and receive rewards from shared contention fees.
Puffer Based App-chain ecosystem
However, UniFi still has limitations to consider, such as scalability if a large number of layer-2s interact with UniFi and how UniFi integrates with dApps on different Rollups.
Furthermore, layer-2s are increasingly developing and expanding their own ecosystems, such as Optimism’s Superchain (https://coin68.com/optimism-gioi-thieu-op-stack-va-tham-vong-tro-thanh-superchain/), (https://coin68.com/optimism-gioi-thieu-op-stack-va-tham-vong-tro-thanh-superchain/) ZKsync’s Hyperchain (https://coin68.com/matter-labs-va-zksync-era-gioi-thieu-bo-cong-cu-zk-stack-voi-tam-nhin-phat-trien-hyperchain/), (https://coin68.com/matter-labs-va-zksync-era-gioi-thieu-bo-cong-cu-zk-stack-voi-tam-nhin-phat-trien-hyperchain/) and the layer-3 system (https://coin68.com/arbitrum-ra-mat-mainnet-10-layer-3-bo-cong-cu-orbit/) on Arbitrum with stable user base and liquidity. Is the UniFi solution really necessary to address the liquidity fragmentation problem?