Espresso Systems: Driving L2 Scalability through Shared Ordering

Espresso Systems initially planned to build a highly scalable, privacy-focused decentralized L1 protocol, but later realized that there was no need for so many L1s, thus shifting towards building solutions for the Ethereum ecosystem. To achieve this vision, Espresso undertook two independent efforts to address privacy and performance issues.

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

The sequencer is responsible for validating and batching transactions on the Layer 2 blockchain, then sending them back to the Layer 1 chain for settlement. Rollups do not actually require a sequencer; this is merely a design choice aimed at providing users with a lower fee and faster transaction confirmation experience.

The main problem with current sequencers is that they are prone to centralization ( which is often run by a single operator, and ) with risks such as transaction review, MEV extraction, and single point of failure.

Solutions such as Espresso's shared sequencer ( rely on independent, permissionless network nodes ) aim to solve these problems. Espresso is creating a shared ordering marketplace through which Layer 2 chains can sell block space to shared proposers, including proposers of the Ethereum mainnet EVM, who create value by satisfying user needs across multiple chains.

! [From Idea to Reality: How Does Espresso Enable L2 Scaling with Shared Order?] ](https://img-cdn.gateio.im/webp-social/moments-ea5aa0f9feda365311d64358217c72f1.webp)

Technical Architecture

CAPE

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

VERI-ZEXE is a decentralized private computation ( DPC ) system that allows users to perform arbitrary computations off-chain and submit transactions using zero-knowledge proofs to verify the correctness of the computations. VERI-ZEXE has significant improvements in transaction generation and memory usage, and will be used in future versions of CAPE.

HotShot

HotShot is a consensus protocol that prioritizes high throughput and fast finality, based on the HotStuff protocol. It adopts a proof-of-stake security model and can scale to include all Ethereum validators (, currently over 700,000 ) participants.

Tiramisu

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

• Savoiardi: A base layer that offers the highest level of security but isn't very user-friendly.
• Mascarpone: The middle tier, which guarantees efficient data recovery by electing a small data management committee.
• Cocoa: The top layer, providing a content distribution network for Tiramisu to enhance data propagation speed.

Espresso Sequencer

Espresso Sequencer is a decentralized transaction ordering system for Layer 2 scaling solutions on Ethereum. It is designed around a single decentralized proof-of-stake security model, supporting a consensus protocol for transaction ordering and a data availability mechanism.

Development Process

• June 2022: CAPE enabled on the Goerli testnet
• November 2022: Launch of the Americano testnet and first public disclosure of Espresso Sequencer
• July 2023: Launched shared Doppio testnet with Polygon zkEVM
• August 2023: The Doppio testnet is open to the public
• September 2023: Launched the Cortado testnet, integrating OP Stack and Polygon zkEVM summary.
• January 2024: Launch of the Gibraltar testnet with integration of the Arbitrum technology stack
• May 2024: Release of the Cappuccino testnet, scaling to 100 nodes with support for Arbitrum fraud proofs

! [From Idea to Reality: How Does Espresso Enable L2 Scaling with Shared Order?] ](https://img-cdn.gateio.im/webp-social/moments-7e73facc88882a7e58f13e2e3a736098.webp)

Ecosystem

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

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 and Series B financing.

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

! [From Idea to Reality: How Does Espresso Enable L2 Scaling with Shared Order?] ](https://img-cdn.gateio.im/webp-social/moments-ca2677e126b5a027cfe4f669e8e489dd.webp)

Project Summary

As a middleware, Espresso mainly provides a shared ordering service, bringing new uniformity and efficiency to the Rollup and Ethereum ecosystem through a shared ordering marketplace and powerful finality tools. It not only solves the current problem of Rollup fragmentation, but also lays the foundation for future cross-chain operations and the broader ecosystem.