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What are Rollups-as-a-service (RaaS)?

What are Rollups-as-a-service (RaaS)?

Alex Gu headshot

Written by Alex Gu

Logan Ross headshot

Reviewed by Logan Ross

Published on August 23, 20234 min read

Rollups-as-a-Service (RaaS) offers a layer of abstraction over Rollup frameworks and SDKs to make it easy to deploy, maintain, and build on top of custom, production-grade application-specific rollups (AppRollups).

RaaS empowers developers to focus on building the application layer, turning what used to take multiple engineers dozens of hours into a 10 minute no-code deployment process.

To understand RaaS, we first need to establish some definitions. For the purposes of this article, we’ll assume readers have a basic understanding of L1s, sidechains, and general purpose L2 rollups (eg. Optimism and Arbitrum).

An application-specific blockchain, or appchain, is a blockchain dedicated to serve and operate one specific application instead of multiple apps like a public blockchain.

In this way, appchains offer a more sustainable long-term approach to scaling applications while enabling web3 developers to exercise greater freedom over economic structure, governance structure, and consensus algorithm for their apps.

A year ago, app developers faced three primary choices when deciding where they wanted to deploy their application: 

1. Public L1s or Sidechains like Ethereum, Solana, and Polygon

2. Shared general-purpose L2 rollups like Optimism and Arbitrum

3. L1 appchain networks like Cosmos

Each of these came with a unique set of tradeoffs that we’ll discuss below. Fortunately, we now have more advanced alternatives thanks in large part to Rollup SDKs.

Rollup SDKs are frameworks for developers to build customized rollups from scratch.

In practice, this enables any developer to create their own new, dedicated application-specific rollup (AppRollup) based on the same underlying software as leading general purpose rollups like Arbitrum and Optimism. As such, popular rollup SDK providers include Arbitrum Orbit, the OP Stack, and Rollkit.

AppRollups built with Rollup SDKs combine the customizability and flexibility of dedicated appchains with the security and scalability of general purpose rollups.

Unfortunately, building effective AppRollups using Rollup SDKs requires intensive infrastructure engineering along with a comprehensive knowledge of all pieces involved in the modular stack to ensure the final infrastructure best suits the unique needs of the application.

That’s where RaaS comes in to help.

In addition to deployment, RaaS providers like Caldera, Ankr, or Dymension work with developers to tailor AppRollups to fit their specific use-case through custom data availability and settlement layers, fee payments, and even native gas tokens.

Deploying a custom AppRollup through the Rollup SDKs requires teams to build support tools like testnet faucets, block explorers, and bridge interfaces. Most RaaS providers create these tools for every chain through their service, along with continued support with infrastructure-related needs in perpetuity.

While deploying on top of an existing public L1 comes with strong security guarantees and robust resources, the nature of sharing blockspace with dozens of other applications inevitably hurts performance, raises user transaction costs, and limits customizability.

As an L1 network and its applications grow in popularity, so do costs and processing speeds.

For example, block times on Caldera chains will take 10-100 milliseconds on average compared to 10-12 seconds on Ethereum.

In order to combat the scaling issue, the development of more rollups which provide sufficient scalability while still preserving the security of the underlying base chain, has become commonplace. 

RaaS providers enable developers to leverage the security of a base layer such as Ethereum, and enjoy the customizability of a dedicated appchain, all while maintaining EVM-compatibility and access to popular developer tools.

Like public L1s, every dApp deployed on top of an Ethereum L2 (including general purpose rollups like Arbitrum and Optimism) is forced to share computational resources with all the other dApps on that rollup, leading to inevitable battles for the limited blockspace.

These shared networks also lack customizability in comparison to RaaS, as they’re meant to serve a wide range of usecases rather than optimize for a single one.

Imagine a blockchain based video game that needs quick settlement time and is ok with a centralized sequencer. For this team, a RaaS makes much more sense than sharing blockspace on a general purpose L2.

The limited blockspace and lack of customizability mentioned above have contributed to the rise of application-specific blockchains through frameworks like the Cosmos ecosystem, Polygon Superchains, and Avalanche Subnets.

The trouble is that these L1 appchains require developer teams to bootstrap their own validator network for security, despite possessing far smaller developer communities with fewer resources and tooling.

In contrast, RaaS solutions are able to inherit security from their settlement layers, while abstracting away difficult infrastructure engineering and providing developers access to the full suite of EVM tooling.

RaaS represents a new status quo in Web3 infrastructure, enabling developers to deploy custom, performant AppRollups in the click of a button without the hassle and cost of intensive infrastructure engineering.

The primary tradeoff for working with a RaaS provider at the moment is the lack of liquidity that you’d face with any new appchain.

As expected, public general-purpose chains like Ethereum will almost always have more liquidity across its network due to the sheer number of applications and users operating all at once.

However, for RaaS: the edge in performance enables a smoother user-experience, the customizations allow for more sustainable revenue generation (through MEV optimization, sequencer fee collection, etc), and the bridge interfaces make it easy for users to transfer funds from large public chains onto the AppRollups.

These features should render any immediate lack of liquidity insignificant in the long term for most successful projects.

Because of the customizability, RaaS is a great infrastructure solution for nearly any application that plans to build at scale. These include on-chain gaming, DeFi applications, and a variety of consumer & enterprise protocols.

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