Espresso Systems: An Innovative Solution for L2 Scaling through Shared Ordering

Espresso Systems initially planned to build a highly scalable and privacy-focused decentralized L1 protocol, but later shifted to providing solutions for the Ethereum ecosystem. Their goal is to address privacy and performance issues through two independent efforts.

To provide better privacy options, Espresso has developed the CAPE application, which is a smart contract system that can be deployed on any EVM chain, capable of achieving customizable configurations for transaction-level privacy.

The sequencer is responsible for validating and batching transactions on the second-layer blockchain, and then sending them back to the first-layer chain for settlement. While Rollups do not have to use a sequencer, this design can provide users with lower fees and faster transaction confirmation times.

The main issues facing the current sorters are the tendency towards centralization, as well as risks such as transaction censorship, MEV extraction, and single points of failure.

Espresso's shared sequencer solution is designed to address these issues. It relies on independent, permissionless network nodes, creating a shared sequencing market through which Layer 2 chains can sell block space to shared proposers.

Technical Architecture

CAPE

CAPE is the implementation of Espresso Systems' configurable asset privacy protocol on Ethereum. It allows asset creators to issue private digital assets while specifying the parties that can view ownership and transaction data. CAPE also supports advanced strategies using private verifiable credentials, freeze keys, or threshold schemes.

VERI-ZEXE is a decentralized private computing ( DPC ) system that has significant improvements in transaction generation and memory usage. It will be used in future versions of CAPE to enable arbitrary user-defined asset strategies.

HotShot

HotShot is a consensus protocol that prioritizes high throughput and fast finality. It employs a proof-of-stake security model and is capable of scaling to include all Ethereum validators (, currently over 700,000 ) participants.

Tiramisu

Tiramisu is an innovative data availability solution that consists of three layers:

• Savoiardi: Base layer, providing the highest level of security.
• Mascarpone: Middle layer, ensuring efficient data recovery through the election of a small data management committee.
• Cocoa: The top layer, providing a content delivery network for Tiramisu, accelerating data dissemination.

Espresso Sequencer

Espresso Sequencer is a system for decentralized transaction ordering for Layer 2 scaling solutions on Ethereum. It supports the decentralization of L2, handling decentralized ordering and data availability of aggregated transactions. Espresso Sequencer is designed to be deployable on any zk-VM or optimistic VM platform.

Development Process

• June 2022: Started using CAPE on the Goerli testnet
• November 2022: Released Espresso Testnet 1( Americano )
• July 2023: Launched the shared Doppio testnet with Polygon zkEVM
• August 2023: Opened the Doppio testnet to the public
• September 2023: Launched testnet 3(Cortado)
• January 2024: Release of Testnet 4(Gibraltar)
• May 2024: Launch of Testnet 5( Cappuccino )

Ecosystem

Espresso Systems has established partnerships with multiple projects, including EigenLayer, Injective, AltLayer, Catalyst, Spire, Polygon zkEVM, Caldera, Offchain Labs, Blockdaemon, and Across. These collaborations aim to enhance interoperability, decentralization, and capital efficiency.

Project Team

• Ben Fisch: CEO and co-founder, Assistant Professor of Computer Science at Yale University
• Charles Lu: CEO and Co-founder, former head of Binance Labs
• Benedikt Bünz: Co-founder and Chief Scientist, focused on cryptocurrency cryptography

Project Financing

Espresso Systems raised a total of $60 million through seed and Series B financing:

• March 2022: Raised $32 million, led by Greylock Partners and Electric Capital
• March 2024: Completed a $28 million Series B financing, led by A16zcrypto.

Project Summary

Espresso, as middleware, primarily provides shared sorting services. By leveraging a shared sorting market and powerful finality tools, it brings new unity and efficiency to the Rollup and Ethereum ecosystems. Espresso not only addresses the current fragmentation issues of Rollup but also lays the foundation for future cross-chain operations and broader ecosystem development.