From Fusaka to Based Rollup: How Much Further is the Road to ETH Value Capture?

After the Ethereum Fusaka upgrade, due to the adoption of EIP-7918 (blob fee minimum reserve price, approximately 1/16 of the base execution fee), with a bottom price mechanism in place, many users initially thought it could solve the ETH value capture problem.

In reality, there is still a long way to go. Currently, L2 still captures most of the profits, for example, Base captures over 70%, paying only a small amount of blob fees to Ethereum L1.

To truly solve this issue and also address the liquidity fragmentation problem in L2, there are solutions. One of them is Based Rollup, which allows L2 to directly inherit the decentralization, economic security, and activity of Ethereum L1, rather than creating a new centralized sequencer or small validator set. If combined with Native Rollup (execution layer integration), it would be even better.

Using Based Rollup can alleviate two major current issues in the Ethereum ecosystem: liquidity fragmentation and ETH value capture. Most L2s today rely on centralized sequencers, which can refuse to include transactions; crashes can cause L2 outages (which have happened multiple times in history); MEV and profits are monopolized by L2 teams, preventing ETH from capturing fair value.

With Based Rollup, L2 can move towards decentralization. Traditional L2s need to implement decentralization through fraud/validity proofs and decentralized sequencer systems, which is very complex. Based Rollup allows the L1 proposer to handle transaction ordering, supported by DA and fraud/validity proofs. Meanwhile, all transactions in the Based Rollup are ordered within the same L1 block, enabling cross-L2 interoperability and alleviating liquidity fragmentation; ETH capture on Ethereum L1 is stabilized, and most of the profits from L2 sequencers become income for L1 block builders, which can be converted into rewards for ETH stakers. The key premise here is that L2 must be willing to adopt Based Rollup. Currently, most L2s are reluctant to give up their most lucrative profits.

Currently, L2 application chain Reya uses ZK proofs to ensure finality and relies on L1 validators/delegators for transaction ordering, with 20% of protocol/transaction fees used to buy back ETH. This setup is more friendly to Ethereum L1 ecosystem feedback than lighter solutions. If Reya succeeds, more L2 application chains will adopt based Rollup architecture, which will benefit ETH value capture.