Make local global again

At Luban, we see Ethereum as a settlement layer, for both hundreds of rollups and ETH as an asset. It is where state transitions and financial transactions obtain the ultimate finality and become part of the global truth. Local fee markets are essentially carving up Ethereum blockspace and trying to get a slice of it for their own, since getting included by Ethereum is the settlement they need.

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                                  How local fee markets share an Ethereum block

Settlement on Ethereum right now is indeterministic - same as any other transactions, a settlement transaction needs to compete for Ethereum blockspace in real time, and can only know whether it has made it when the block is finalized and proposed.

Indeterministic settlement has several problems.

  1. Volatile cost. Gas fee can fluctuate a lot. For businesses who require frequent settlement such as rollups, the settlement cost becomes a major uncontrollable factor in operation.
  2. Missed settlement. Due to the probabilistic nature of inclusion, there can be missed settlement, especially at times when gas fee surges. Ironically, this is exactly when settlement is needed the most for, e.g., oracles.
  3. Crippled composability. Two independent local fee markets can achieve trustless composability only when they settle together on the L1 in the same block. This is very difficult to do under indeterministic settlement, not to say on a regular basis, unless the two markets merge into one - which means giving up sovereignty.

Blockspace futures and settlement guarantee

Luban brings certainty back to settlement with blockspace futures, which are essentially chunks of future Ethereum blocks. A buyer can purchase some amount of gas — a chunk of block — from the proposer of that future block, and fully OWN the blockspace he has bought.

Buying future blockspace for a particular transaction gives your preconfirmation. In other words. preconfirmation is just a subset of blockspace futures. A more general description of the product enabled by blockspace futures is settlement guarantee. You don’t have to specify transaction details when buying future blockspace; instead, whatever you submit before the arrival of the destination block will get a guarantee of settlement.

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Settlement becomes deterministic with blockspace futures. Cost becomes stable because blockspace can be purchased in advance at a predetermined price that’s immune from gas volatility. Missed settlement won’t happen because you already own the blockspace needed.

Now on to the final boss: composability.

On-demand composability

Under the hood, what “composability” really means is “deterministic ordering of actions/transactions”. Two different fee markets can be composable if transactions on each market can be somehow deterministically ordered together (meshed). For example, if a swap transaction on rollup A can be sequentially executed, with certainty, with a swap transaction on rollup B without any other transactions happening in between, we say the two rollups are composable, and liquidity is shared between A and B.