Arbitrum Orbit Chains Sequencer Profit Share

Self-service Arbitrum Orbit Chains provide a host of benefits, including dedicated blockspace, custom gas token, native account abstraction, the ability to utilize an alternative DA layer, and governance sovereignty. In a world where rollups/rollapps are proliferating, how should a rollup framework capture value? The most obvious answer is a revenue/profit share of sequencer profits, as that is how rollups generate profit.

This dynamic was first kickstarted by Coinbase’s L2, Base, which promised to give 2.5% of sequencer revenue or 15% of sequencer profit, whichever is greater, to the Optimism DAO, as Base is built using the OP stack. A simple conclusion could be that sequencer profit sharing might see a race-to-the-bottom dynamic, but we believe that will only occur to a relatively limited extent. Developers choosing to utilize various rollup stacks are free to do so today. For example, any rollup can utilize the OP stack freely and permissionlessly. But both Arbitrum and Optimism are building out features and tooling that have value-add to rollups, such as branding, ecosystem tooling, improved proof systems, etc. that could eventually “lock in” a rollup into that particular rollup stack. More importantly, Arbitrum/Optimism are developing shared sequencer solutions, and likely actively researching interoperability solutions. Shared sequencer/DA/interoperability/proof solutions would allow, rollups to access unified liquidity, a large number of existing users, a seamless bridging and user experience, and interoperability with all chains within the ecosystem, in exchange for a portion of sequencer profits. 

Given the large proliferation of rollups today built on various rollup stacks, it will be crucial to keep an eye on these rollups, which of them join “collectives” such as the OP Superchain and the Arbitrum Expansion program, and how this ultimately affects the value accrual the respective rollup tokens.