Uniswap Labs unveils Unichain, the first Ethereum Layer 2 to integrate Flashbot's Rollup Boost solution

Uniswap UNI +11.58% Labs unveiled a testnet for its forthcoming Ethereum scaling solution Unichain on Thursday — joining the growing ranks of firms looking to build custom Layer 2s — a person familiar with the matter told The Block. 

“Uniswap Labs has a lot of experience with liquidity and building trading systems, so we think that we are also well positioned to augment the cross-chain space with regards to access and liquidity,” a developer, who asked to remain nameless, said. 

The system has been under development from ideation to launch since about last November, though the bulk of the building was done in the past few months. The Uniswap protocol, the decentralized trading juggernaut with a cumulative $2.4 trillion trading volume, will be launched on the testnet chain, beginning with V2 and V3. 

A “preview version” of the much anticipated Uniswap V4 — expected to go live by year’s end — will also be deployed. “Basically showcasing everything that's been audited and fixed so far,” the developer said.

Unichain will tap the Optimism Superchain, a scalable and interoperable network of Ethereum L2s that uses so-called Optimistic rollups. Many firms have tapped the Superchain to launch their L2s — including Coinbase, Zora and now Uniswap. The Superchain allows for the connection of multiple L2 networks, known as OP Chains, to share security, a communication layer and an open-source technology stack.

Asked whether the introduction of another Layer 2 would increase the fragmentation of the ecosystem in terms of users and liquidity, the developer explained that “the Superchain is the best place to do that because it’s building towards very fast native interoperability between L2s."

"You can imagine a world where every extra L2 is not necessarily an increase to the fragmentation of Ethereum, but rather it's just an increase to the total amount of things that the system can do,” he added. 

“After years of building and scaling DeFi products, we’ve seen where blockchains need improvement and what’s required to continue advancing Ethereum’s roadmap,” CEO of Uniswap Labs Hayden Adams said in a statement . “Unichain will deliver the speed and cost savings already enabled by L2s, but with better access to liquidity across chains and more decentralization.”

Flashbots integration

Moreover, Uniswap thinks it is bringing a unique solution to the process of block building, which will help differentiate the blockchain. The firm is the first to partner with MEV experts Flashbots to integrate its novel Rollup-Boost protocol that debuted in August , which the team hopes will enable one-second block times at launch and eventually "effective sub-second" block times. 

Typically, an L2 creates transactions validated and executed by validator nodes. The network’s sequencer node, the system that organizes and orders transactions that make up the blocks of a blockchain, will then update the network state. A proposer node will then publish the updated network state and some transaction details onto the main chain. 

Rollup Boost is middleware that inserts itself into that process by streaming the transactions to a trusted execution environment before the block is given to the sequencer. While it sounds like an extra step, these environments can be given code that splits up transactions in sub-blocks, speeding up block building.

“Every 250 milliseconds, so four times per second, it will take all the transactions we have so far, order them into a little mini sub-block that will then be stacked four times in a row to create a full block,” the developer said. “As long as the trust execution environment is doing those rules, those sub-blocks can be treated as basically little blocks.”

Trusted execution environments can be trusted, in part, because they’re critical infrastructure — literally a part of a node’s hardware — across any industry that relies on a computer’s central processing . They can also be given code that proves a script was performed as written, similar to how Merkle trees are used by blockchains. 

"We are excited to work with Uniswap Labs and OP Labs on Unichain and launch Rollup-Boost, a TEE-powered side car for L2 extensions," Flashbots steward and strategy lead Hasu said in a statement. "This new platform will offer near-instant transactions, native revert protection, and MEV internalization for the next generation of DeFi applications."

Unichain, the block builder and node software are all open source under an MIT license and available for others to adopt. 

“Moving forward, we do plan to continue working closely with the OP collective as a whole,” the developer said. “We'd love to participate in building infrastructure – smart contracts and anything – in an open-source way that can be used by the rest of the community.”