Understanding Puffer UniFi AVS: From Preconfs to the Next Decade of Ethereum?

Author: Puffer

On September 16, Puffer officially announced the Ethereum security infrastructure product "UniFi AVS," which serves as an Active Verification Service (AVS) based on EigenLayer. It is specifically designed to address the pre-confirmation (Preconfs) challenges in the Ethereum ecosystem, especially in the Based Rollup domain, aiming to unleash the full potential of Based Rollup.

Many users may still have the impression of Puffer as a single native liquidity re-staking platform, but as early as August, we have elevated ourselves to a decentralized infrastructure provider for Ethereum. The product architecture can be summarized as a "three-horse carriage": Based Rollup solution Puffer UniFi, pre-confirmation (Preconf) technology solution UniFi AVS, and re-staking product Puffer LRT.

This article will delve into the functional services of UniFi AVS. However, before that, it is necessary to briefly clarify the relevant concepts of Based Rollup. Once we understand Based Rollup, we can grasp the significant meaning and value of UniFi AVS for the future direction of Ethereum.

Based Rollup: The New Optimal Solution for Ethereum Rollup?

Based Rollup is a concept formally proposed by Ethereum Foundation researcher Justin Drake in March 2023, aimed at solving a series of problems in the existing Rollup ecosystem.

As is well known, after Vitalik Buterin released the "Rollup-Centric Ethereum Roadmap" in 2020, the Ethereum ecosystem entered the multi-Rollup era. According to incomplete statistics from L2BEAT, as of the publication date, there are as many as 39 Rollup L2s. Both Optimistic Rollup and ZK Rollup have alleviated old issues such as Ethereum's scalability to some extent, but they have also brought about a new dilemma of increasingly fragmented liquidity.

At the same time, the sequencer, as the core component of the L2-L1 architecture, is responsible for the transaction ordering and packaging from L2 to L1, playing an important role in improving transaction processing efficiency and reducing costs. However, due to the centralized sequencers controlled by a single or few entities in the running L2s, there are potential risks of sequencer failure or malicious behavior:

If a sequencer encounters problems, it can lead to transaction delays, data loss, or even threats to asset security, which is undoubtedly a huge risk for users relying on L2 for transactions.

What about the highly sought-after decentralized sequencers or shared sequencers in the market?

In theory, they can indeed eliminate the single point of failure and malicious risks brought by centralized sequencers, but their coordination and consensus mechanisms are relatively complex, and there may be compatibility issues between different decentralized sequencers, making seamless integration difficult. Moreover, to be realistic, there has yet to be a successful large-scale practical verification of decentralized sequencer networks, which may still face various potential attacks and vulnerabilities.

Therefore, Based Rollup directly follows the "Occam's Razor" principle, eliminating the separate sequencer network mechanism design: the responsibility for transaction ordering is shifted from the original L2 to L1, with Ethereum L1's validating nodes acting as block proposers responsible for transaction ordering.

This not only avoids the risks brought by centralized sequencers but also fully utilizes Ethereum's existing node network and decentralized characteristics, upgrading security to the same level as the Ethereum mainnet.

However, gaining one thing often means losing another, which brings about another challenge—the native Based Rollup network cannot achieve fast transaction confirmations.

The reason is simple: the commonly used L2s based on centralized sequencers can quickly sort and package transactions, achieving near-instant transaction confirmations. In contrast, Based Rollup's transaction ordering is handled by L1 validating nodes, meaning confirmation time entirely depends on the mainnet's block interval (about 12 seconds), resulting in a significantly inferior user experience compared to centralized sequencers.

Based Rollup Relies on Preconfs

In simple terms, Based Rollup aligns with L1 in terms of security and decentralization, but sacrifices transaction confirmation speed. For most on-chain scenarios with financial attributes, market conditions can change rapidly; even a 12-second difference can pose significant risks and uncertainties.

Given this, we need to apply a "patch" to Based Rollup, namely pre-confirmations (Preconfirmations, abbreviated as Preconfs). The logic is straightforward; as the name suggests, imagine this:

When we purchase train tickets on 12306, once we select the itinerary and place the order (sign the transaction), the ticketing system will first provide a pre-confirmation message, informing you that the ticket purchase (corresponding to each transaction) has been accepted and is entering the subsequent confirmation process. At this point, we can start planning our trip and preparing our luggage, and only when the ticket is finally confirmed with the carriage and seat (the transaction is published to L1) do we consider the ticket purchase transaction officially completed.

In short, in Based Rollup, pre-confirmation means committing to include the transaction in a block before it is formally submitted to L1 for confirmation, essentially giving users an initial confirmation signal, letting them know that the transaction has been accepted and is being processed.

This ensures that on-chain transaction scenarios that require timeliness do not have to wait a long 12 seconds and can achieve millisecond-level (about 100 milliseconds) transaction response speeds (see further reading: "++Why Does Based Rollup Need Preconfirmation (Preconfs) Technology?++").

This initiative not only significantly improves transaction speed and user experience but also does not require changes to Ethereum's core protocol. In a sense, Based Rollup and pre-confirmations (Preconfs) are like two sides of the same coin—to fully realize the potential of Based Rollup, a permissionless, neutral, and flexible pre-confirmation service must be achieved.

However, it is necessary to consider who will be responsible for ordering and pre-confirming transactions in the specific implementation mechanism, and ensuring adherence to the pre-confirmation commitments?

• For the first question, the Ethereum Foundation is developing a neutral registration contract that will not belong to any specific protocol, aiming to provide a common basis for the discovery and verification of pre-confirmations, similar to the "registration system" model in the stock market, allowing any L1 proposer to voluntarily register as a pre-confirmation validation node;
• For the second question, an economic reward and punishment mechanism based on penalties can undoubtedly ensure that validation nodes do not violate pre-confirmation commitments, but it faces a seesaw choice—if part of the ETH of the validation node is penalized, it would require re-implementing the Restaking smart contract logic, which is capital efficient but also complex; if additional collateral is required, it is less complex but has lower capital efficiency;

So, is it possible to leverage EigenLayer's AVS service to directly solve the penalty issue based on the economic security of the Ethereum mainnet?

Puffer UniFi AVS adheres to this line of thought. It utilizes EigenLayer's Restaking functionality and can potentially integrate with the Ethereum Foundation's neutral registration contract mechanism in the future to achieve an almost ideal scenario:

Establishing a permissionless pre-confirmation service participation mechanism that allows any L1 proposer to voluntarily register as a pre-confirmation validation node, thereby achieving direct reliance on the economic security of the Ethereum mainnet without additional punitive measures.

Puffer UniFi AVS: A Preconf Solution for Based Rollup

Puffer UniFi AVS specifically includes three key components: EigenLayer integration, on-chain registration, and penalty mechanism, among which EigenLayer integration grants Puffer UniFi AVS a unique competitive advantage in pre-confirmation services that is hard to replicate:

It can use the re-staked ETH from Puffer's re-staking validation nodes directly as pre-confirmation collateral without requiring additional deposits, thus "one organization, two brands," where re-staking validation nodes = pre-confirmation service nodes, not only improving capital efficiency but also quickly assembling a pre-confirmation validation node set with a vast number of participants and sufficient decentralization.

We can briefly outline the specific pre-confirmation implementation process of Puffer UniFi AVS.

First, because Puffer's validation nodes are registered as "Native Restaking" nodes on Ethereum, when users submit transactions that require pre-confirmation, Puffer's validation nodes will directly act as pre-confirmation validation nodes, providing a pre-confirmation commitment to users within about 100 milliseconds, allowing them to quickly know that their transaction has been received and will be included in a future block.

After providing the pre-confirmation service, Puffer's validation nodes will package these transactions with others and submit the block to Ethereum L1. Finally, the Puffer UniFi smart contract, Puffer Sequencer Contract, accepts the batch transactions, ensuring that the transaction status has been confirmed and cannot be rolled back.

Throughout this process, the on-chain registration and penalty mechanism of UniFi AVS play an important role—if validators fail to adhere to their pre-confirmation commitments, they will be penalized, thereby ensuring the reliability and security of the entire system.

As of the publication date, the requirements for participating in Puffer UniFi AVS are:

• Ownership of EigenPod. EigenPods are tools for Ethereum validation nodes to interact with EigenLayer, ensuring that UniFi AVS can penalize validation nodes that violate pre-confirmation commitments;
• 32 ETH. Since pre-confirmation validation nodes and Ethereum validation nodes are "one organization, two brands," pre-confirmation nodes need at least 32 ETH to participate. However, the participation form for operators is relatively flexible; whether they run their own native validation nodes or are part of the re-staking product (LRT) does not affect participation;
• Run Commit-Boost. Operators must run the Commit-Boost software alongside their validator client to ensure smooth execution of pre-confirmation services and communication between validators and the pre-confirmation supply chain;

It is worth noting that Puffer UniFi AVS, by integrating Commit-Boost, aims to focus on core functions such as registration mechanisms and penalty mechanisms, providing a more efficient, standardized, and community-centered pre-confirmation service while adhering to the fundamental principles of decentralization and openness in Ethereum.

Who Needs Puffer's UniFi AVS Service?

With a broader perspective, as the narrative around Based Rollup continues to expand, numerous Based Rollup projects are bound to emerge like mushrooms after rain, and their demand for pre-confirmation services is extremely urgent, especially in the face of complex market environments and technical challenges, requiring a reliable pre-confirmation technology service provider to safeguard them.

The market urgently needs a secure pre-confirmation technology service provider, thus Puffer UniFi AVS essentially serves as a universal solution that effectively meets the needs of all parties:

• On the supply side, linking re-staking validation nodes (not just Puffer, but also supporting native re-staking LRT protocol players like Etherfi and Renzo in the future), supporting them to participate in UniFi AVS to gain multiple benefits by selling their validation services for additional income;
• On the demand side, directly facing all project parties needing to build Based Rollup, supporting them to conveniently obtain pre-confirmation services through UniFi AVS, thereby accelerating transaction processing;

In summary, the service model of Puffer UniFi AVS is similar to EigenLayer's matching platform, aiming to promote the optimal allocation and utilization of resources—just like Uber or Didi, connecting re-staking validation nodes as suppliers and providing Based Rollup pre-confirmation services through matching for demanders.

This not only significantly accelerates the innovation process in the Based Rollup field and the Ethereum ecosystem but also creates new income sources for the Ethereum validation node community, injecting new vitality into the entire ecosystem.

Conclusion

Overall, Based Rollup, as a new Rollup approach frequently mentioned by Vitalik Buterin recently, is bound to play a more critical role in the evolution of Ethereum.

Therefore, the indispensable pre-confirmation service for Based Rollup is destined to become a key infrastructure related to the future direction of the Ethereum ecosystem, and Puffer UniFi AVS, as a pre-confirmation technology solution with innovative mechanism design, represents the most crucial step in "Based Rollup + Preconfs":

• For users, Puffer UniFi AVS brings an almost instant transaction confirmation experience, significantly enhancing user experience and laying a solid foundation for the popularization and widespread adoption of Based Rollup;
• For pre-confirmation service providers, it strengthens the reward and punishment mechanism through on-chain registration and penalty mechanisms, improving efficiency and credibility within the ecosystem;
• For L1 validation nodes, it opens up additional revenue channels, enhancing the attractiveness of participating nodes in validation, further strengthening the economic incentives and legitimacy of the Ethereum mainnet;

From a broader perspective, Puffer UniFi AVS starts with Based Rollup but goes beyond it—it is closely linked to Ethereum's long-term vision, achieving rapid pre-confirmation without changing the core protocol, with impacts extending beyond the EigenLayer ecosystem, providing a new paradigm for Ethereum innovation, bringing tangible benefits to users, validators, and the entire Ethereum community, and is expected to trigger a series of chain reactions for Ethereum's continued growth, injecting new and greater possibilities.