Celebrating the Champions: The Recipients of Layer 2 Community Grants

The Privacy & Scaling Explorations group is thrilled to declare the recipients of the Layer 2 Community Grants 2022.

The round for Layer 2 Community Grants commenced on October 24th, 2022, and remained open for a duration of 6 weeks. We received over 130 proposals in total, and we appreciate every project for dedicating their time to submit. The wishlist gathered applications from diverse sectors, encompassing Layer 2 explorers, cryptography, and education.

The following chart illustrates the percentage of initial applicants categorized by sector:

In light of the superior quality of submissions, we extended the budget from an original 750k USD to an overall total of 948k USD.

The percentage of awarded applications categorized by type:

Grantees

We extend our congratulations to the 22 awarded grantees and provide their project summaries categorized as follows:

🔒 Cybersecurity

• Candidelabs – ERC-4337 Public Infrastructure

  • A public good infrastructure providing an open-source bundler and paymaster service for ERC-4337 smart contracts wallets, with a focus on Layer 2.

• Quantstamp – Rollup Security Framework

  • This initiative will develop a comprehensive security framework tailored to the unique aspects of rollups. Their aim is to create a foundation for fundamental best practices and transparency regarding these features to aid new developers of these systems and allow the community to evaluate security risks of a specific rollup prior to utilization. This will be akin to existing resources for smart contract development and the broad overviews of rollup security like L2Beat.com. The framework will cover issues and specifics regarding escape hatch creation and operational risks for developers and end-users, establishing a consistent terminology for these and other aspects.

👨‍💻 User Experience

• Spiro – zkWallet

  • Multi-party wallets (for example, Gnosis safe multisigs) have proven to be an effective method for a collective of users to jointly manage their account’s digital assets and activities. Regrettably, current multi-party wallet implementations reveal the privacy of their total number of operators and their linked externally owned accounts. This project aims to develop a confidential multi-party wallet that safeguards end users by utilizing account abstraction (EIP-4337) coupled with zero-knowledge proofs.

• Kautuk Kundan – Stackr Network

  • Stackr Network serves as an SDK for initiating standalone customizable app-specific rollups, utilizing familiar web2-like tools. It adheres to the fundamental principle of a roll-up, which is to operate a state machine off-chain and employ L1 to retain transaction details. This objective can be realized through general-purpose languages that maintain the app-state off-chain and provide an interface for interaction, thereby serving as an independent L2. This permits the creation of a new category of applications that will possess greater freedom regarding their execution options.

• ScopeLift – L2 Optimizers

  • Layer 2 networks share security with the main-net by posting transaction call data to Layer 1. Consequently, Layer 2 users incur their share of main-net gas expenses during transaction execution. Layer 1 gas can be >25,000 times pricier than Layer 2 gas; thus, the cost of call data often overshadows L2 transaction costs. By employing custom router contracts that utilize less call data than conventional methods, we can significantly lower transaction costs for popular protocols.

• Testinprod – Layer1.5

  • Layer 1.5 allows anyone to establish their own Layer 2 by providing user-friendly tools. It offers a straightforward application that launches your Layer 2 while equipping it with essential tools—for instance, block explorer, token bridge, monitoring tools, etc.

• ScopeLift – Layer 2 Governance with Flexible Voting

  • Flexible Voting is an extension of the widely adopted Governor system utilized by numerous DAOs. It enables the creation of new types of delegation contracts, simplifying participation in on-chain votes for governance token holders. This grant addresses a specific application: Layer 2 governance voting. Holders of bridged governance tokens could cast votes from Layer 2, benefiting from reduced gas prices available there. These votes would be seamlessly reflected on L1, where the DAO’s Governor system is implemented.

• Clement Walter – Starksheet

  • Starksheet aspires to democratize access to and use of on-chain resources (data and logic). It utilizes an intuitive spreadsheet to assist users in querying and linking with on-chain resources. The results are stored on-chain as NFTs and can later be queried from any other dApp/contract

• Kristof Gazso – Typescript ERC-4337 Bundler

  • This project involves creating an ERC-4337 bundler in Typescript and incorporating the necessary adjustments to a Geth node for simulation purposes, enabling the bundler to function on any Geth-compatible chain (which encompasses the majority of L2s) with minimal changes. The bundler will also expose the
    “`RPC calls outlined in the documentation, and sustain an internal mempool to ensure longevity as P2P dissemination is enhanced.

• Soul Wallet – Open-source ERC-4337 wallet

  • User-friendly browser wallet solution powered by ERC-4337.

📚 Community and Education

• Jose Figueroa – L2 en Español
  
  • L2 en Español represents an open community focused on researching, educating, and promoting the adoption of Ethereum’s scaling solutions. Their emphasis is on both developers and newcomers as they strive to keep abreast of these technologies and their applications. They generate content and organize a variety of activities, ranging from publications to workshops at no cost, while backing diverse projects that introduce innovation in this sector, maintaining their core impartiality.

• Bruce Xu – MyFirstLayer2
  
  • This will evolve into an open-source, community-centered, and educational initiative. It will serve as a platform for individuals interested in Layer 2, yet lacking prior knowledge about Layer 2 or Blockchain. We aim to employ well-structured diagrams and interactive animations to facilitate a comprehension of Layer 2 within 30 minutes. Subsequently, we will guide users to some practical Layer 2 applications step by step, allowing them to experience the advantages of Layer 2.

🗄️ Data Analysis

• Blockscout – Blockscout Block Explorer
  
  • A need currently exists for an open-source block explorer in the L2 ecosystem. Blockscout is already utilized by several L2 projects, and further customizations tailored to L2 data needs will enhance usability. Furthermore, a revamped interface, additional features, analytics, and developer-friendly upgrades will contribute to establishing a more clear and user-friendly community explorer.

• Quantstamp – Assessing Rollup Compression
  
  • Compression is frequently underestimated when addressing rollups. By their nature, rollups must make data accessible to validate state transitions or state roots; however, the method of this distribution varies and may involve compressed data. There is also a range of compression techniques employed. This initiative will investigate the application of compression within the rollup context. Initially, the project will clarify where compression is applied and document the strategies that may be utilized. Next, the project will analyze existing rollups to study the methods that are actually employed in real scenarios. Additionally, the project will evaluate strategies proposed or utilized in similar setups and attempt to understand why a specific method is chosen. In conclusion, the project will leverage the insights gathered to recommend new strategies for compressing rollup data and highlight open questions for the community.

• Diablobench – Performance and Security Assessment of Layer 2 Blockchain Systems
  
  • The University of Sydney and EPFL have established a benchmark suite for evaluating the security and performance of blockchain systems. Initial evaluations contrasted Layer 1 blockchains such as Algorand, Solana, and Diem, with results set for publication soon in a peer-reviewed international conference (Eurosys). This project intends to incorporate Layer 2 blockchain systems into the Diablo benchmark and utilize it to develop the first comprehensive and realistic assessment of Layer 2 blockchain systems globally.

• Web3-data – Layer 2 Activity Monitoring & Comparison Suite
  
  • Through this initiative, we seek to provide a top-notch suite of dashboards that assist data scientists, researchers, and all community participants in gaining better insights into Layer 2 activity.
  • We will gather data across Layer 2 networks utilizing sources such as Dune, L2Beats, Santiment, CoinGecko, Github, Discord, and often directly from the project APIs/RPCs.
  • Our aim is to clean and organize this data, producing a collection of displays that will allow the community to visualize shifts across essential L2 metrics (e.g., tps, rent disbursed to Ethereum, changes in TVL, daily active addresses, new addresses, total addresses, fees paid, and developer engagement based on GitHub affiliated repo commits).
  • We plan to categorize smart contracts (and in turn allow the community to categorize smart contracts) based on usage types (Native transfer, DeFi DEX, DeFi other, NFT, CEX, Stablecoin, ERC20 other, L2 rent, Bridge, Arbitrage/MEV, Utility). This categorization will enable us to analyze and visualize usage patterns at a broader scope and identify the “hottest” smart contracts across various usage types. We will be utilizing recognized labels from Dune, Arbiscan, Etherscan, and others.

• L2 Beat – L2 Beat
  
  • Continue to engage in transparent and verifiable insights regarding evolving Layer 2 (L2) technologies with augmented metrics and educational efforts.

📊 Data Visualization

• Quantstamp – Back-End API Specification for L2 Block Explorers
  
  • This initiative will distinctly outline the characteristics that a block explorer must fulfill to be regarded as feature-rich within the broader Layer 2 context. Additionally, we aim to propose and define a standard API that Layer 2 networks should make available to generalized block explorers. We anticipate that such a standardized interface will facilitate and significantly ease the development of multiple block explorers that can seamlessly interface with all Layer 2 networks that adhere to the standard. Ideally, this standard would transform the establishment of a new block explorer’s core into a project that an adept team could complete within a weekend hackathon. Our objective will also be to establish a standard that is agnostic to individual consumers.As a result, it will be irrelevant whether it is utilized by a commercially offered block explorer, is open-source, or potentially decentralized. The initiative will focus on what specific layer two information a block explorer should deliver, particularly highlighting aspects pertinent to the security of the chains it oversees.

• Blossom Labs – Blobscan
  
  • The inaugural explorer for EIP-4844 shard blob transactions. It catalogs and showcases them in a searchable layout that users can effortlessly visualize and navigate, supplying the essential infrastructure to enhance Ethereum’s scalability.

🧮 Cryptography and Zero-knowledge proofs

• Zhe Ye, Ujval Misra, and Dawn Song (University of California at Berkeley) – Specular
  
  • Currently, the leading optimistic rollups (ORUs), Arbitrum and Optimism, seek to extend the existing Ethereum client program (Geth) to accommodate interactive fraud proof (IFP) construction, aiming to utilize previous L1 engineering advancements and replicate EVM semantics at L2. However, this tightly integrates their on-chain IFP verifier with a specific client application binary—unaware of its higher-level semantics. This methodology (1) inhibits the trust-minimized, unrestricted participation of multiple Ethereum client applications, amplifying the risk of monolithic failure; (2) results in an unnecessarily expansive and intricate trusted computing base (TCB) that is challenging to independently evaluate; and (3) suffers from a frequently activated yet unclear upgrade process—further heightening auditing burdens and complicating long-term on-chain access control.
  • Thus, our concentration is on developing a secure, trust-minimized ORU that resolves these issues while maintaining scalability and dispute resolution efficacy. To achieve this, we have created an IFP system that is native to the EVM, enforcing Ethereum’s semi-formally specified semantics [5] precisely at the granularity of a single EVM instruction. As part of this initiative, we developed Specular, an ORU that utilizes Geth—modified minimally by only 99 lines of code to enable IFP construction—showcasing the practicality, extensibility, and trust-minimal characteristics of our strategy.

• Nethermind, Justin Thaler (Georgetown University), Matthew Green (Johns Hopkins University), and Pratyush Tiwari (Georgetown University) – Concrete Security Analysis for L2 Deployed Proof Systems
  
  • We intend to evaluate the concrete security of the proof systems (SNARKs, STARKs) that secure -rollups. We note that certain proof systems have security examined in the interactive context, while their security upon applying the Fiat—Shamir transformation remains speculative. Additionally, we believe that in some instances, more efficient attacks may be feasible than the asserted security level suggests.

• Ethstorage – Proof of Storage on L2 Dynamic Datasets with an Ethereum L1 Contract
  
  • Given a collection of commitments of BLOBs (for instance, KZG commitments from EIP-4844/Danksharding, indexed from 0 to n-1) in an L1 contract, this project aims to explore an efficient proof system to confirm on L1 that the BLOBs are stored off-chain with the desired redundancy (for example, 30 to 50 physical replicas). By establishing these storage nodes in an L2 network and assuming that 1/m of the nodes operate honestly, we could create an L2 storage network that reuses mainnet security while substantially enhancing Ethereum’s scalability.
  • Further study will seek to address the questions regarding how to construct the proof/verification system if the BLOBs and the commitments undergo continuous modification (e.g., new BLOBs added to the list or a BLOB at a certain index being altered); and how to develop an incentivized/payment system to guarantee the desired replication factor with ETH as compensation; it begs the question whether it is possible to request a storage node to retain partial BLOBs while maintaining the equivalent level of security of Mainnet?

We were immensely satisfied with the caliber of applicants for this grants cycle. The research and work they produce will positively influence the ecosystem. We recommend keeping an eye on them!