Why we invested in Rome Protocol
The Solana-Based Shared Sequencer
We at L2 Iterative Ventures (“L2IV”) are excited to announce that we incubated and participated in Rome Protocol’s pre-seed round, an innovative Shared Sequencing solution for L2s.
Here's why we invested in Rome Protocol
Rome Protocol is a shared sequencer infrastructure that leverages Solana to enable cross-rollup liquidity and interoperability for Ethereum L2 scaling solutions.
Currently, rollups operate in silos - each rollup has its own custom sequencer, which orders transactions within that individual rollup chain. This segmentation creates issues like:
Liquidity fragmentation: Assets and liquidity pools become isolated within each rollup, unable to move freely across rollups.
Complex cross-rollup transactions: It is very hard to execute a single atomic transaction across multiple rollups in a seamless way.
Redundant infrastructure: Each rollup team maintaining its own sequencer with validators is inefficient.
Shared Sequencing refers to the process of aggregating and ordering transactions from multiple L2 rollups into a single block, which is then posted to the main blockchain (L1) without executing the transactions.
Rome Protocol aims to solve these problems by providing a “Shared Sequencing” layer that can order transactions across all major rollups concurrently. This is enabled by leveraging Solana as the underlying execution layer (via dedicated Neon EVM smart contract deployments) for the shared sequencer.
Rome Protocol feels existing designs fail hard on two fronts:
sequencer centralization and
no native interoperability across chains.
Their shared sequencer powered by Solana’s SVM aims higher. Instead of just ordering transactions, Rome's sequencer executes smart contracts to process conditional logic across chains. This unlocks the crypto dream:
assets seamlessly hopping between rollups, apps splitting work across environments, and
atomic composability between fragmented worlds.
Rome's architecture lets the shared sequencer enforce cross-rollup rules and batch transactions atomically across multiple EVMs. So swaps, bridges, arbitrage - you name the complex workflow, and Rome can execute it without hiccups across chains.
The key ingredients enabling this are:
A sequencer that executes transactions over just ordering
Enforced invariants for atomicity
Rome combines these two masterfully with their Shared Sequencer infrastructure. This crystallizes the vision of deeply integrated, high-throughput rollups.
As major rollups have grown exponentially, the acute pain caused by fragmented liquidity pools has become more evident. When a protocol's liquidity exists fractured across 4-5 rollups, aggregating positions or routing swaps/trades itself becomes highly complex. This is the reason why Arbitrum and Optimism have actively advocated and adopted shared sequencers into their roadmap.
Want Cross-chain Assets to Be Social Butterflies?
Let Rome handle it
Rome's architecture unlocks a cooperative future for rollups
Shared Sequencer Input Layer: Responsible for ordering incoming user transactions that are batched within rollups before they go to the next components
Neon EVMs: Rome Protocol deploys a separate Neon EVM module for each rollup integration. This allows EVM smart contracts execution per rollup state on Solana itself, maximizing efficiency.
MEV Auctions: This component allows rollup transactions to be ordered and sequenced based on MEV auction mechanisms to optimize for profitability.
Atomic Composability Layer: This facilitates transactions across rollups that need atomic execution - ensuring they either fully complete or fully fail/rollback. This maintains consistency across chains.
Transactions are grouped into batches for efficient processing before being submitted to Solana and then to the Ethereum mainchain. Batches are compressed to save gas fees.
Hence, Rome Protocol enables interoperability across rollups by:
Using isolated EVMs
Aggregating transactions via mempools
Sequencing via a unified cross-rollup sequencer
Efficient bundled transaction processing on Solana
Submitting confirmation back to destination chains
Why Solana?
Solana’s high-speed throughput and parallelization capabilities have been the go-to tech to build on.
Cost per Transaction: With Solana's PoH consensus and Sealevel (Solana’s parallel smart contracts runtime), it effectively provides ~$0 cost per transaction, with very high throughput. This is much more efficient than running an EVM per rollup, as other solutions do.
Neon EVM allows Ethereum smart contracts to run easily on Solana. Rome Protocol can leverage this ready-made infrastructure rather than having to build their own systems.
Solana's industry-leading transaction speeds and throughput capabilities (2000+ TPS currently but poised to keep growing) make it well-equipped to handle the large transaction volumes Rome will need to process across all integrated rollups.
With over $1.4 billion worth of SOL tokens staked on Solana, Rome Protocol immediately benefits from the battle-tested security, decentralization, and reorg resistance at Solana's established scale.
L2IV Thoughts
After closely incubating Rome Protocol and observing their impressive progress, we at L2IV are thrilled to formally announce our pre-seed investment. Rome's vision of a shared sequencing infrastructure addressing current rollup limitations compelled us to partner early.
By elegantly leveraging Solana's capabilities for blazing throughput and highly parallelized transactions, Rome unlocks order-of-magnitude efficiency gains in shared validation, infrastructure, and liquidity across traditionally siloed rollups. Their novel solution centered on a collectively operated (Shared) sequencer executing transactions on behalf of multiple chains profoundly resonated with us.
Their model of a shared sequencer effectively eliminates the duplication of work that exists due to each rollup producing blocks in an isolated, uncoordinated manner. By consolidating this sequencing task into a shared unit, redundancy is removed.
We are proud to be working alongside Rome as they actualize this reality.
Disclaimer: This content is provided for informational purposes only and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisors as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services.