Rollup Centric Ethereum Future and ETH

Gateways and Multichain Trustless Liquidity Management

The rollup centric future of Ethereum is the most advantageous short to mid-term solution for scaling a blockchain’s use cases in a permissionless way. Users who want to use rollups need to deposit their asset to rollup’s contracts in Ethereum and withdraw back their assets once their transactional needs are fulfilled. In a generalized way, rollups are off-chain execution environments with shared security from the Ethereum base layer. However, the rollup economy comes with a base cost for this derived security guarantee. This is referred to as data publication, rollups require continually paying this cost to Ethereum to commit their compressed data proof into Ethereum for onchain data availability. If we look at the rollup economy, it has three categories of stakeholders: users, operators(who validate rollup transactions locally), and the base layer (Ethereum).

From a cost perspective

User cost = (Ethereum data publication fee + Rollup operator fee + Rollup transaction fee)

Operator cost = (Rollup operator cost + Ethereum data publication cost)

This can be used to formulate a rollup operating budget for its applications’ sustainable growth and sustainability. If a rollup operator has a negative budget balance, their operations are running at a loss and it's unprofitable for them to serve the rollup. This will result in them stopping services. Every rollup shall have an active short to long-term strategy for keeping the operating budget balance for their sustainable growth. This is likely executed with their native issued network token emissions for incentivizing long operator leases.

Ethereum blockspace is a scarce resource with continuous high demand. Post-merge Ethereum produces blocks at a 12 second constant interval. This will make transaction cost dynamics and validator payments more metered and predictable from a resource allocation perspective. On top of blockspace scarcity with constant production intervals, EIP1559 market fees will bring more advanced transaction queue pricing to the market. Rollups need to maintain a sufficient amount of ETH at stake to maintain enough blockspace access for their data publication. Otherwise, it will affect their budget balance adversely if they rely on the open market to procure blockspace. The fees will skyrocket for a small window.

Stakehouse is built as post-merge compliant, and Ethereum rollup centric future focused. Its SLOT tokens bring programmable transaction ordering and blockspace leases on a token level. It is essentially a meta lightweight proposer builder separation logic that enables long-term futures contracts for rollups executed on smart contracts. Validators can get paid automatically when the original staker validation rights are actively monitored and remarketed by market participants as blockspace inventory. As the registry contracts are off-chain friendly, the Ethereum ecosystem can have high-frequency auctions locally for SLOT tokens, and settle payments on-chain. This brings another factor into play, rollups need native ETH liquidity for their ecosystem growth that can be served via dETH and its Gateway contracts.

Gateways are savETH index liquidity bookkeepers; These assets can be ported externally from Ethereum. A user or protocol can curate savETH to a gateway index, and export dETH to a destination blockchain/rollup without any bridges. This will allow rollups to have a strategic method to maintain their liquidity and security budget. Optimally, having a balanced portfolio of dETH and SLOT, that can secure growth capital for applications with fast track withdrawals and long lease blockspaces for data publication cost. We have seen a myriad of auto rebalancing and strategy based protocols in DeFi for yield optimization in the last two years. With Stakehouse protocol, it will be easy for a DAO or protocol to have a multichain fixed income strategy. It allows a rollup to have a more resilient network by incentivizing monetary policies. Ethereum is a builder's heaven and innovation breeding ground. Stakehouse is built for builders as a fully permissionless and immutable protocol from day one.