Behind Layer2 Profits: The Key Role of Sorters and Decentralization Challenges

Layer2 currently mainly earns revenue through the Gas fees of user transactions. After deducting the Gas fees for submitting data to Layer1, the remaining part is basically pure profit. According to statistics, the profit of OP Mainnet in the second half of 2023 is approximately 5.23 million USD, Arbitrum's annual profit is 16.5 million USD, and zkSync Era's profit from March to December reaches 22.24 million USD.

Behind these considerable profits, there is a close relationship with the unique sorters running each project.

The Sequencer ( is a key role in Layer2. It is responsible for receiving user transactions and executing them, then submitting the sorted and compressed batch ) to Layer1. The Sequencer can be likened to a bus driver, responsible for picking up passengers ( user transactions ) into the city ( Layer1) and arranging the passengers' positions as efficiently as possible.

The current mainstream sorter operating methods are:

1. Centralized Sorter: Operated by the Layer2 team or a designated organization, it is efficient and cost-effective.

2. Permissionless Sequencer: Anyone can participate, but it may lead to resource waste.

3. Decentralized Sorter: Implements decentralization through various schemes.

There are usually two criteria for sorting: first come, first served or sorted by Gas fees. Layer 2 projects do not have strict regulations on sorting criteria.

To prevent malicious behavior by sorters, Optimistic Rollup adopts a fraud proof mechanism, while ZK Rollup uses a validity proof.

Currently, mainstream Layer 2 still uses centralized sequencers, which has raised some issues:

1. Weak censorship resistance
2. There is a risk of single point of failure
3. Possible improper acquisition of MEV profits

To address these issues, Layer 2 projects have proposed decentralized sequencer solutions, such as geographical decentralization, sequencer auctions, and leader elections. Another approach is for multiple Layer 2s to share a third-party sequencer network.

Decentralization is a long-term process, and the importance of sorters makes them a focal point. It is believed that through continuous exploration, these issues will ultimately find suitable solutions.