Espresso Systems: Innovative Shared Ordering Solutions for L2 Scaling

Espresso Systems initially planned to develop a highly scalable and privacy-focused decentralized L1 protocol, but later realized that not so many L1s were needed and shifted focus to building solutions for the Ethereum ecosystem. To achieve this goal, Espresso undertook two independent efforts addressing privacy and performance issues.

To provide better privacy options, Espresso has developed the CAPE application. This is a smart contract system that enables customizable configurations for transaction-level privacy and can be deployed on any EVM chain.

The sequencer is responsible for validating and batching transactions on the layer 2 blockchain, and then sending them back to the layer 1 chain for settlement. While rollups do not necessarily require a sequencer, this design choice aims to provide users with a lower fee and faster transaction confirmation experience.

The main issue with the current sorter is its tendency towards centralization, often operated by a single operator, which poses risks such as transaction censorship, MEV extraction, and single points of failure.

Espresso's shared sequencer and other solutions ( rely on independent permissionless network nodes ) aimed at addressing these issues. Espresso is creating a shared sequencing market, a Layer 2 chain that will sell block space to shared proposers, including proposers on the Ethereum mainnet EVM, who create value by meeting the demands of multiple on-chain users.

Technical Architecture

( CAPE

CAPE is the configurable asset privacy protocol implemented by Espresso Systems on Ethereum. It enables asset creators to issue private digital assets while specifying particular parties that can view ownership and transaction-related data. CAPE also supports advanced strategies using private verifiable credentials, freeze keys, or threshold schemes.

VERI-ZEXE is a decentralized private computing ) DPC ### system. It enhances transaction generation by approximately 9 times, increases memory usage by about 2.6 times, and will be utilized in future versions of CAPE to enable arbitrary user-defined asset strategies.

( HotShot

HotShot is a consensus protocol that prioritizes high throughput and fast finality, based on the HotStuff protocol. It employs a proof-of-stake security model, aiming to achieve strong performance without affecting the size of the validator set, capable of scaling to include all Ethereum validators ), currently over 700,000 ### participants.

( Tiramisu

Tiramisu is an innovative data availability solution that consists of three novel layers:

• Savoiardi: The foundational layer, providing the highest level of security as an anti-bribery layer.
• Mascarpone: Middle layer, ensures efficient data recovery through the election of a small data management committee.
• Cocoa: The top layer, providing content delivery network for Tiramisu, helping to deliver "Web2-level performance".

) Espresso Sequencer

Espresso Sequencer is a system for decentralized transaction ordering for layer 2 scaling solutions on Ethereum. It is designed around a single decentralized proof-of-stake security model, supporting consensus protocols for transaction ordering and data availability mechanisms that can achieve further performance advantages.

![From Concept to Reality: How Espresso Achieves L2 Scaling through Shared Ordering?]###https://img-cdn.gateio.im/webp-social/moments-6c808de8f56948fc4f7395d0086df837.webp###

Development Process

• June 2022: Started using CAPE on the Goerli testnet
• November 2022: Released Espresso Testnet 1 Americano, first public unveiling of Espresso Sequencer
• July 2023: Launched the shared Doppio testnet with Polygon zkEVM
• August 2023: Opened Doppio testnet to the public
• September 2023: Launched Testnet 3 Cortado, integrated OP Stack and Polygon zkEVM summary
• January 2024: Launch of Testnet 4 Gibraltar, showcasing integration with the Arbitrum technology stack.
• May 2024: Launch of Testnet 5 Cappuccino, expanding the HotShot final layer to 100 nodes.

Ecosystem Cooperation

Espresso Systems has established partnerships with several projects, including EigenLayer, Injective, AltLayer, Catalyst, Spire, Polygon zkEVM, Caldera, Offchain Labs, Blockdaemon, and Across. These collaborations aim to enhance interoperability, decentralization, and capital efficiency.

Project Team

• Ben Fisch: CEO and Co-Founder, Assistant Professor of Computer Science at Yale University
• Charles Lu: CEO and Co-founder, former head of Binance Labs
• Benedikt Bünz: Co-founder and Chief Scientist, PhD student at Stanford University

Project Financing

Espresso raised a total of $60 million through seed round and Series B financing:

• March 2022: $32 million seed round, led by Greylock Partners and Electric Capital.
• March 2024: $28 million Series B, led by A16zcrypto

Project Summary

Espresso provides shared ordering services as middleware, bringing new unification and efficiency to the Rollup and Ethereum ecosystems through a shared ordering market and powerful finality tools. It not only addresses the current fragmentation issues of Rollups but also lays the groundwork for future cross-chain operations and a broader ecosystem.