Sovereign rollups vs smart contract rollups on Celestia
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Explains that sovereign rollups handle execution and settlement via app light clients while the DA layer only orders and stores data, unlike smart contract rollups that settle on Ethereum. Weighs bridge, security and upgrade trade-offs and expects early NFT, gaming and meme chains.
Key claims
Sovereign rollups upgrade via forks instead of multisig-controlled contracts
They lack a native trust-minimized bridge, which limits liquidity-heavy use cases
No settlement cost on Ethereum
Sovereign rollups are the programmable execution layers of the @CelestiaOrg ecosystem. 🧱✨
My take on how they work and what the key differences to smart contract rollups are. 🧠⤵️
🏗️ Network Design
Smart contract rollups, as the name suggests, are basically just a set of contracts deployed on what serves as the settlement and likely DA layer (if we talk "true" rollups).
They publish complete blocks to the settlement layer and the role of the settlement layer is to arrange the blocks in order, depending on design ensure data availability, and verify the accuracy of transactions (e.g. by verifying execution proofs).
So a "true" rollup like @Arbitrum or @zkSync Era handles the execution of tasks and effectively delegates the responsibilities of consensus, data availability, and settlement to Ethereum.
A sovereign rollup on the other hand is a specific type of blockchain that publishes its transactions to another blockchain for tx ordering and DA purposes, while handling its own settlement.
Hence, within the modular stack, sovereign rollups take charge of execution and settlement, while a DA layer like @CelestiaOrg handles consensus and DA.
What's unique here, is that the DA layer does not verify the correctness of sovereign rollup transactions. It is the responsibility of the nodes validating the sovereign rollup to ensure the accuracy of new transactions that are added to the chain.
🧑💻 How does it work?
Let's assume that a hypothetical (sovereign) rollup is a validity rollup. It hence relies on ZK proofs that would be verified through the verifier contract on the settlement layer in the smart contract rollup case.
In the sovereign case, the "settlement" or proof/state verification happens through app light clients.
What's important to note here though (and hopefully evident from the above visualization) is that sequencer and app light clients are two different things.
The sequencer does just the sequencing (tx ordering) and local state derivation. As @andyyy mentions, this will likely be a shared sequencer like @AstriaOrg in many cases.
App light clients on the other hand can embed an execution validity proof verifier (basically settlement) and do DAS (for probabilistic DA gurantees) to serve the same purpose Ethereum + contracts do in the case of a rollup like @zkSync.
Implementation-wise, the app light client can be embedded in a user wallet so users won’t know they are running an app light client.
Alternatively, you could host some app light clients on your own infra (something that for example the @CelestiaOrg team can help projects do) and the wallets can just read and write state to the rollup via the app light client RPCs.
🌉 Bridges & Security
Sovereign rollups usually lack a native trust-minimized bridge with the DA layer, which is another key difference to smart contract rollups.
Smart contract rollups have trust-minimized security due to settlement layer verification of the entire block. However, the trust assumptions might be weakened if upgradeability via multisig is possible (see below).
While sovereign rollups can incorporate a trust-minimized bridge to the DA layer, it does not determine the correct canonical chain for the bridges with sovereign rollups primarily enable the transfer of the DA layer token (as Andy points out).
This enables the utilization of the DA layer token in applications such as DeFi & NFTs for #DA layers that lack smart contracts such as @CelestiaOrg.
🔄 Upgradeability
Finally, in the case of smart contract rollups, upgrades present various challenges. Modifying the smart contracts on the settlement layer is often done through a multisig and could pose a dangerous attack vector.
Total immutability is also not always desirable however, since it makes upgrades to the exisiting network essentially impossible.
Sovereign rollups function similarly to L1 blockchains. They upgrade through forks, providing nodes with the option to update client software or remain on the older version.
🧠 Summary & Look Ahead
Yes, there is some additional trust assumptions that come with sovereign rollups.
However, as always, there is both drawbacks and benefits to this, the latter for example being the sovereign and more flexible upgradeability that can be achieved on a node/client level, rather than by modifying a multisig-controlled smart contract.
Other benefits include lower cost since there is no settlement cost on Ethereum (or whatever the settlement layer is), no cost for bridging the DA attestation to the settlement layer (if a rollup settles on Ethereum and uses Celestia for DA) and customizable time to finality (not dependant on settlement layer).
In my opinion, the presence of a trust-minimized bridge to a settlement layer like Ethereum however, is something that makes smart contract rollups better positioned for use cases that require vast amounts of liquidity.
At least initially, I see a bunch of community-centric NFT, gaming or meme chains to emerge as the main adopters of this network design. This will be catalysed by no-code deployment frameworks like @RollkitDev.
As interop tech improves and the @CelestiaOrg ecosystem matures that might change though and the spectrum of use cases that we will see materialize on sovereign rollups will likely broaden.
Generally, I think sovereign rollups are an interesting app-chain design and using clusters of sovereign rollups that share a DA layer, we can create trustlessly composable app-chain ecosystems that can efficiently interoperate at scale, fueled by liquidity from the base layer (e.g. @CelestiaOrg), giving the native token of said base layer more utility and more tangible use cases.
Sovereign rollups are the execution layers of Celestia.
Modular Expansion 🧱✨
QUOTING @andyyy
The way I understand it is sovereign rollups are a blockchain design which rely on their own set of nodes for execution & settlement but outsource to @CelestiaOrg (or other DA layer) for data availability and consensus. Key difference here being the “settlement” component as tra
The way I understand it is sovereign rollups are a blockchain design which rely on their own set of nodes for execution & settlement but outsource to @CelestiaOrg (or other DA layer) for data availability and consensus. Key difference here being the “settlement” component as tra
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