In our previous article, "Breaking Down ME Network’s Modular Design: Execution, Settlement, and Data Availability Layers," we discussed how modular blockchain architecture decomposes the blockchain stack into distinct layers—Execution, Settlement, and Data Availability. This separation allows each component to specialize, significantly improving the overall performance, flexibility, and scalability of the blockchain.
Defining the Execution Layer
The execution layer is the computational engine of the blockchain, responsible for processing transactions and updating the state of the network. This includes verifying transaction validity—such as signature verification and balance checks—executing on-chain logic, and updating the state database. State changes occur as full nodes update their copies of the ledger to reflect new token transfers, smart contract updates, and data storage.
When discussing scalability in the context of the execution layer, it’s essential to recognize that this involves more than just increasing the number of transactions per second (TPS). It also encompasses the broader concept of handling greater computational throughput. As transaction complexity varies, so does the computational load, meaning the challenge in scaling lies in processing more computational work per second without dramatically increasing the hardware requirements for nodes that validate these transactions. The execution layer scaling solution, exemplified by Ethereum's Rollup technologies like Arbitrum and ZKSync, addresses these issues by offloading some of the computational burden.
Understanding Rollups
Rollups are Layer 2 scaling solutions that execute transactions off-chain while maintaining the security guarantees of the underlying Layer 1 blockchain. By processing transactions outside the main chain, Rollups reduce the competition for block space on the main chain (typically Ethereum). After executing transactions, Rollups submit a batch of transaction data or validity proofs back to the Layer 1 chain for settlement. This method allows Rollups to achieve high throughput and low fees while leveraging the security of the Layer 1 chain for finality and data availability.
ZK Rollups vs. Optimistic Rollups
There are two dominant types of Rollup solutions: ZK (Zero-Knowledge) Rollups and Optimistic Rollups. Optimistic Rollups assume by default that all transactions are valid, only generating and submitting fraud proofs to the Layer 1 chain when a potentially malicious or incorrect transaction is detected. If a fraudulent transaction is identified, the chain can roll back the transaction and penalize the party that submitted it.
ZK Rollups, on the other hand, operate by generating cryptographic proofs (validity proofs) for the correctness of the off-chain computations. These proofs are then posted to the Layer 1 chain, verifying that the Rollup correctly executed the transactions without revealing the transaction data itself. The key advantage of ZK Rollups lies in their ability to significantly reduce the time and resources needed for transaction verification, resulting in higher efficiency.
However, this efficiency comes at the cost of increased complexity and higher hardware requirements for generating these proofs.
Optimistic Rollups are particularly versatile, offering full support for smart contracts. This allows developers to deploy existing decentralized applications (dApps) on Layer 2 with minimal modifications, making them an attractive option for scaling complex, smart contract-heavy workloads.
Given the current technological landscape, ME Network has chosen to implement Optimistic Rollups for its execution layer.
ME Network’s Execution Layer Implementation
ME Network’s execution layer is built on Optimistic Rollup technology. This approach assumes that all transaction validations are honest but incorporates a challenge period during which participants can contest any transaction. If no challenges are raised within the designated period, the block is finalized, and the ME Network main chain accepts the withdrawal proofs from the Rollup chain, completing the transaction.
If a challenge is submitted within the period, any participant can broadcast a fraud proof, which is then validated by the network. If the challenge is upheld, the fraudulent transaction is invalidated, and the state is rolled back. To prevent malicious behavior, ME Network requires sequencers—entities responsible for ordering transactions—to stake tokens as collateral. Should a sequencer act maliciously, their stake is slashed and redistributed as a reward to the party that identified the fraud. Additionally, ME Network has implemented incentives to encourage the validation of fraud proofs, ensuring robust network security.
It’s important to note that a successful challenge does not result in a rollback of the ME Network mainnet’s state. The transaction order and the mainnet’s state remain unaffected; only the specific state submission on the Rollup chain is impacted.
To enhance the efficiency of the execution layer, ME Network employs a decentralized sequencer network to maintain security and stability. The sequencers publish the state roots to the settlement layer, while compressed transaction data is stored in the data availability layer. By offloading computational tasks to the Rollup, ME Network’s main chain (ME Hub) experiences reduced load, resulting in high TPS and lower gas fees.
Despite this, the ME Hub (settlement layer) is also a fully functional blockchain that supports smart contracts. Users who do not require the lower gas fees and concurrency advantages of the Rollup can choose to execute transactions directly on the ME Hub, much like deploying contracts on Ethereum. While ME Network does not encourage deploying resource-intensive applications on the settlement layer to preserve space for Rollups, the settlement layer can temporarily take on some execution duties until the Rollup technology is fully realized.
The modular design of ME Network’s blockchain allows for highly specialized execution capabilities, significantly boosting overall performance. In the future, ME Network will further enhance its execution layer through its proprietary virtual machine (MVM) and innovative transaction models, enabling high throughput and efficient processing of complex smart contracts. As demand for scalable, high-performance blockchain solutions continues to grow, ME Network is well-positioned to meet these challenges.
Moreover, ME Network supports multiple virtual machine execution environments (ME Rollup Executor), including EVM compatibility and Wasm. Rollup chains can select the most suitable environment based on their specific needs. Additionally, different Rollup chains can achieve seamless interoperability through ME Network’s cross-chain communication protocol, fostering a diverse and integrated multi-chain ecosystem.
Conclusion
Rollups are pivotal to the future of blockchain technology, acting as the primary interface between dApps and blockchain networks. ME Network’s commitment to exploring Rollup technology extends beyond Optimistic Rollups. As ZK-Rollup technology matures, we plan to integrate relevant execution environments and components. Simultaneously, we are closely monitoring advancements in large language models (LLMs) and other AI applications to create a more intelligent and user-friendly base layer for both developers and end-users.
