The leading rollups (Optimism and Arbitrum) – while impressive/important – are still WAY more centralized than people realize.

Here's how 🧵

1/13

https://twitter.com/CoinDesk/status/1585229027085778946

Arbitrum and Optimism comprise 80% of the rollup market today (>$3B TVL).

Both reduce gas fees by ~95%

They are pitched as secure alternatives to sidechains and commit chains – scaling solutions that pass data to Ethereum without correctness guarantees

2/13

After an investor lost access to its Terra wallet in 2019, a chain fork quietly moved its funds — 9M $LUNA — from one wallet to another.

The excellent @laurashin asked @stablekwon why this was swept under the rug.

Here’s how my sources and I uncovered what happened 🧵

https://twitter.com/laurashin/status/1582332161557946368

In the process of upgrading the Terra blockchain from Columbus-1 (version 1) to Columbus-2 (version 2) in June 2019, Terra instructed validators to run a script which discretely moved 9 million $LUNA (worth >$1B at peak) from one wallet to another.

github.com/terra-money/co…

Reminder: No rollups fully "borrow Ethereum's security" as claimed.

*All* rollups – Arbitrum & Optimism included – have tons of limitations right now (ie. fully-permissioned/non-existent fraud proofs)

Upcoming zkEVMs will be even more limited.

https://twitter.com/sgoldfed/status/1581740706795692032

Why is this a problem?

Current marketing from Layer 2s might mislead consumers into thinking that they are using platforms with 100% equivalent security to Ethereum.

They're not.

Today's rollups can be exploited and carry different degrees of centralization/censorship risk.