Scalability

Scalability is the top priority among the BNB Chain roadmap goals that the Binomial protocol can support directly. As the BNB Chain ecosystem puts great emphasis on L2 Rollups with regard to scalability, we will also dive into the theme of Rollups and RaaS providers, and how Binomial supports enhancing those solutions.

Rollups main challenges: sequencing

The main challenge with rollups is the centralization of the sequencer. Most rollups depend on sequencers managed by the protocol developers, and while this centralization is often tolerated due to trust in well-established operators, it poses a long-term risk. Relying on a single entity undermines the decentralization ethos of blockchain. To build truly decentralized solutions, we must move beyond centralized sequencers, ensuring no single party can manipulate the system, thus preserving integrity and decentralization in the long run.

Another challenge with centralized sequencing arises with Rollup-as-a-Service (RaaS) providers. While they offer valuable services that reduce costs and resource needs for teams launching rollups, their business model depends on centralized sequencing and execution. RaaS providers typically take a portion of sequencing revenue, incentivizing them to keep clients locked in for extended periods. This vendor lock-in creates risks, as a dominant RaaS provider may unilaterally change fee structures or extract MEV (Maximum Extractable Value), prioritizing profits over the client’s needs and decentralization.

Centralized systems, or even decentralized setups with a significant discrepancy of computational resources among participants, may present a high potential for censorship. A single centralized actor or a small group of actors controlling the sequencing process could selectively prevent certain transactions from being included in blocks. While the Layer 2 (L2) solutions are designed to extend the throughput of the base layer, they are still vulnerable to censorship if the sequencing mechanism lays in the hands of a centralized party.

Binomial solution:

Providing the means to select decentralized sequencing resources among the PoSA (Proof-of-Staked-Authority) validators, Binomial enhances anti-censorship capabilities and distributes the responsibility for transaction ordering across multiple participants. This ensures that no single entity can control which transactions are being processed, thus maintaining decentralization and censorship resistance across L2 solutions before finalizing the state on the main network.

Moreover, a shared decentralized sequencer removes the vulnerability of having single points of failure by distributing transaction processing across a decentralized network of nodes. If one node goes down, the system remains operational because other nodes continue processing transactions. This improves the overall stability and reliability of the network by reducing reliance on any single sequencer.

Rollups main challenges: verification

Optimistic rollups rely on the assumption that at least one honest participant is verifying that the state committed by the rollup operator on the main chain accurately reflects the correct execution of transactions and prior validated states.

However, many app-specific rollups lack the mature ecosystem of trusted verifiers that general-purpose rollups enjoy, leading to a shortage of participants with sufficient incentives to actively monitor the network. This lack of oversight can weaken the security of these app-specific rollups, making them more vulnerable to incorrect state commitments.

Binomial solution

Binomial secures and incentivizes the verification of rollup state correctness by allowing validators to restake BNB and earn rewards for verifying rollups. The protocol decentralizes monitoring, reducing reliance on a single party, and imposes slashing penalties on validators for incorrect state validation. Additionally, decentralized shared sequencing ensures proper transaction ordering, while extending BNB's crypto-economic security to rollups. Together, these mechanisms foster a secure and incentivized process for ensuring accurate rollup state transitions within the BNB Chain ecosystem.

Rollups main challenges: finality

The main challenges for fast finality in the current BNB Chain ecosystem primarily stem from centralized sequencing and network congestion. Centralized sequencers can create bottlenecks, slowing down transaction processing and confirmation. Additionally, as the BNB Chain scales, handling the high volume of transactions while ensuring timely validation becomes more difficult.

Binomial solution

Binomial addresses these issues by decentralizing the sequencing process and incentivizing validators to prioritize faster, accurate finalization, thereby reducing delays and drastically improving overall transaction throughput in the BNB Chain ecosystem.

Binomial’s scalability impact: conclusion

The Binomial restaking protocol enhances scalability solutions like Rollups within the BNB Chain ecosystem by introducing decentralized shared sequencing. This functionality improves the coordination of rollups, enabling faster finality, and verification of rollup state correctness. Binomial supports both optimistic and zk rollups, ensuring scalability across different architectures. Additionally, it provides crypto-economic security by leveraging restaked BNB for consensus validation, further securing rollups while decentralizing the validation process and boosting performance in handling high transaction volumes.

• Decentralized Shared Sequencing: Binomial allows rollups to share decentralized sequencers, reducing centralization risks and improving coordination between rollups, enhancing throughput and fairness in transaction ordering.

• Verification of Rollup State Correctness: By leveraging restaked capital, Binomial helps validate rollup state transitions, ensuring the correctness of both optimistic and zk rollups.

• Faster Finality: The protocol accelerates transaction finality across rollups, reducing latency and improving the user experience.

• Support for Both op and zk Rollups: Binomial accommodates both optimistic and zk-rollup architectures, offering flexibility and broad scalability to the ecosystem.

• Crypto-Economic Security: Restaked BNB strengthens the security of the rollups, ensuring that validators have financial incentives aligned with the integrity of the system, reducing risks of malicious behavior.