From L2 to Superchain: The Optimism Bedrock Update

The Bedrock update is the biggest and most awaited update of Optimism Mainnet, and the foundation of the OP Stack Modules.

The upgrade will take place today, the 6th of June! Let’s get into it.

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What are the Main Features of Bedrock?

Lower Transaction Fees: Batching and Compressing

The two main cost sources when sending a transaction on Optimism Mainnet are:

• The L2 execution fee (comparable to how regular transaction fees work on Ethereum)

• The L1 data/security fee (majority of costs: crucial to the security of Optimism because it means that all of the data needed to sync an Optimism node is always publicly available on Ethereum).

Bedrock improves the efficiency of how “large amounts of data posted to Ethereum” are compressed, by changing how Optimism sends data to L1 to maximize the usage of available space.

The Lower Transaction fees come from transaction batching and compressing.

Batches take away ”as much extra information as possible, retaining only essential, small amounts of metadata”. Therefore, L2 transactions, called “sequences batches” are compressed into a “channel”.

These channels will then be compressed again (increasing their efficiency) and broken further down into “channel frames”.

As a result, Optimism is able to handle large L2 transactions by sending them to L2 in parallel, through several channel frames.

That’s how it works:

1. Transactions are batched into “Sequencer Batches”

2. Further compressed into “Channels”(this is the data that will be compressed and submitted on Ethereum)

3. Channels are divided into “Channel Frames”: independent chunks of the channel data. Since the order of frames is already established, they can be submitted in parallel to Ethereum, increasing efficiency.

This is estimated to reduce protocol costs/security fees by 47% (comprising 99% in state chain commitments and 20% in batch submission costs).

The costs are expected to decrease further once EIP-4844 is implemented on Ethereum.

For those who are interested, you can refer to my article providing a quick intro to EIP-4844:

Bedrock also reduces deposit times by 70%, from 10 minutes to 3 minutes, and implements EIP-1559 to reduce the variance of Transaction costs.

Minimal Code difference with Ethereum

Bedrock re-uses a lot of code from Ethereum!

From principle, it was built on purpose to have minimal difference from Geth, the most used Ethereum execution Client.

Optimism forked Geth into Op-Geth, which has only about 2500 lines of difference from Geth. You can dive into the details of all the modifications:

Using an established and battle-tested client:

• Increases security;

• Decreases attack surface;

• Leverages Ethereum equivalence.

Making development similar to Ethereum is a fundamental component to attract high-caliber developers. Anyone building on Optimism will have minimal differences from building on Ethereum and will find it really easy to leverage the OP Stack, for instance, to build their own L2.

Furthermore, the interoperability with Ethereum will also mean that it will be easier to bridge applications from Ethereum to Optimism and open possibilities for cross-chain integrations with other L2 solutions, such as Arbitrum and Polygon.

Multiple Clients

Modular execution with the engine API: dividing consensus and execution, enabling the introduction of custom execution engines and Virtual Machines.

The implementation of the engine API enables a multi-client ecosystem, a fundamental step towards infrastructural decentralization and chain security: for instance multiple clients may catch some divergences, making the overall system more secure.

Bedrock Modularity

Arguably the most important features of Bedrock.

1. Modular Consensus

Bedrock swaps out the consensus layer and replaces it with an OP node, allowing Optimism to reach consensus using L1 consensus and consuming raw L1 data.

Since this is basically just a raw stream of data, there can be new data sources added on top of it (such as off-chain sources of data, EIP-4844 etc.) which allows further modularity and scalability.

2. Modular Execution

We’re all familiar with the debate between Optimistic Rollups (relying on fault proofs) and ZK Rollups, which are considered to be superior.

The modularity of the OP stack makes it possible for Optimism to seamlessly switch to a ZK Rollup once the technology is ready to do so. OP will do so through “Cannon”, its execution implementation that “generate the execution trace over the client and allows to prove an execution trace” either with fault proofs or ZK Proofs.

OP stack: standardized and open source libraries that provide:

• Shared security

• Composability

• Coordinating Sequencing

The OP stack offers full modularity between different layers, that other L2s can combine according to their requirements:

• Consensus Layer: how the chain gets constructed

• Execution Layer: Virtual Machine executed over the chain of inputs

• Settlement Layer: where withdrawals occur.

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What are some of the options projects can choose?

Having an upgradable and modular ecosystem is a fundamental requirement in the ever-changing landscape where L2s operate.

Who knows what else is going to come in the next few years? But what we know, and have already experienced in the first wave of natural selection of crypto projects from early years, is that if you lock in your infrastructure you’ll soon be obsolete.

Optimism envisions a “Cambrian explosion” of L2s built on the OP Stack, in turn, these projects will have a choice to use the OP Sequencer.

Let’s assume that they do so, then an increasing amount of fees will be gathered by the OP Sequencers, leading to a virtuous cycle:

in fact, Optimism makes pretty impressive use of game theory and incentives, with their Retroactive Public Good Funding (RPGF): a process for funding public goods for the benefit of the Collective.

20% of the initial OP token supply has been allocated to RPGF, as well as profits generated from Network Sequencing and for future L2s building on Optimism using the OP Sequencer.

The sequencer revenue can, in fact, be used to fund projects that benefit the public goods of the Optimism Ecosystem, that in turn increases the value of the OP Stack.

An interesting example, in this case, is the fact that some Core Devs of the OP Foundations previously asked for a grant to the Ethereum Foundation. Nonetheless, since they were a public company, they did not have the right to a grant.

RPGF solves this!

For an overview of all the projects nominated you can refer to:

The RPGF program will move in three phases: first with $1m allocated, then with $10, and eventually will become a permanent endeavor.

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Wen Bedrock?

The highly anticipated OP Mainnet upgrade to the Bedrock release will take place on June 6, 2023 at 16:00 UTC! During the upgrade, the OP Mainnet will experience about 2-4 hours of downtime for OP Mainnet.

If you wish to monitor the OP Mainnet Bedrock Upgrade you can track the Status of the OP Infrastructure here.

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Food for Thought

Bedrock is an impressive development that steps up the game for Optimism and the OP Stack.

The upgrade moves in several directions:

• Lower fees

• Modularity

• Ethereum Compatibility

Combined, these Positive Feedback loops and incentives alignments make it much easier for developers to choose the OP Stack.

I believe this is incredibly interesting for an L2: since the development of their op-Geth they have focused on reusing Ethereum code and making it as easy as possible for developers to switch seamlessly between the two.

This is unfortunately a point that is often overlooked, especially by other L1s and L2s that build using new Programming Languages and Libraries.

As such the opportunity cost for developers to switch chains will increase exponentially as they will have to learn a new way to build and sort of put themselves out there and link themselves to the success of a new chain.

The network effect is arguably one of the key aspects that an L2 has to leverage to build a critical mass of users.

IMHO Optimism is showing a wise long-term approach focused on:

• Improving the network for users (fewer fees)

• Improving the network for developers (interoperability)

• Improving the network for more projects (modularity)

It will be interesting to see how things will move forward given the big unlock that has had a negative price impact on the OP Token.