Interpreting the concept of pre-confirmation: How to make Ethereum transactions more efficient?

Starting from the limitations of the current L2 ecosystem, this article analyzes the specific practices of projects such as Taiko to demonstrate how the innovative concept of preconfirmation optimizes transaction confirmation processes and enhances user experience. It also reveals the dual challenges that current preconfirmation technology still needs to overcome during its development, including technical improvements and ecological sustainability.

*Original Title: “Preconfirmation (feat. Taiko): Make Ethereum FAST for the First Time!”

***Original Author: *Ingeun Kim : : FP

Key Overview

• Taiko is a Layer2 network based on Based Rollup, aiming to achieve full interoperability with Ethereum while promoting the Decentralization of the Sequencer. To solve the latency problem of transaction finality in the Rollup mechanism, Taiko introduces the concept of ‘Preconfirmation’. By guaranteeing the inclusiveness and orderliness of transactions to users in advance, Preconfirmation effectively alleviates the inefficiency of the transaction confirmation process in the Rollup mechanism, thus significantly improving user experience.
• In the Based Preconfirmation model, L1 validators provide users with the guarantee of transaction results. Preconfirmers need to stakeMargin and adhere to the Slashing mechanism to ensure the reliability of the system. L2 projects like Taiko have established a reliable transaction finality by introducing the preconfirmation mechanism, creating a more convenient operating environment for services such as Decentralized Finance that require real-time confirmation.
• Currently, multiple projects have participated in the construction of the pre-confirmed ecosystem. This technological advancement is expected to improve the efficiency of the Ethereum L2 ecosystem, strengthen interoperability with Ethereum, and drive further expansion of the entire ecosystem.

Taiko is steadily moving towards its ultimate goal as a Layer2 solution for Ethereum. To achieve this goal, Taiko prioritizes full interoperability with Ethereum, Decentralization of sequencers, and support for developers. It is worth mentioning that Taiko achieves full interoperability with Ethereum through the architecture of Based Rollup, while allowing anyone to participate as a sequencer, thus achieving decentralization of sequencers. However, despite the advantages of the Based Rollup model, it still has some inherent inefficiency issues.

This article will take Taiko as an example to delve into the concept of Preconfirmation. As a key component of the Layer2 technology stack, Preconfirmation is an important step for further development of Rollup.

Current L2 Efficiency Issue

With the expansion of the L2 ecosystem, numerous projects have emerged successively, bringing many new concepts and technology stacks. However, despite these significant advancements, there are still some urgent issues to be addressed in terms of efficiency in the L2, especially in key areas that affect user experience, making it particularly important to improve efficiency.

Inherent limitations of Rollup: inefficient transaction finality determination process

L2 achieves scalability through Rollup, relying on the data availability and transaction processing of L1 platforms such as Ethereum. However, Rollup has an inherent limitation: although it can independently complete transaction sorting and execution, all other processes still need to wait for the final confirmation of L1.

This architecture ensures security and data immutability by directly utilizing the Block generation and data availability of L1. However, relying on L1 for final confirmation results in slow transaction processing speed and limited real-time confirmation capabilities, making it difficult to meet real-time demands from a user perspective.

In addition, many L2 sequencers and validation nodes are currently centralized. This centralization leads to inefficiency, such as longer transaction confirmation times and possible operational interruptions, which affect the transaction processing efficiency of certain Rollups, resulting in confirmation latency.

Introduction of the concept of pre-confirmation

The concept of pre-confirmation is proposed to solve the problem of low efficiency in final confirmation of transactions in L2 networks. Pre-confirmation allows users to obtain transaction confirmation faster, thereby alleviating the common latency and inefficiency in the Rollup mechanism.

What problems does pre-confirmation aim to solve?

In the Rollup mechanism, there is always an issue of low efficiency in the confirmation process after users submit transactions to L2. Due to the centralized L2 sequencer, it cannot accurately guarantee when transactions will be confirmed on L1, causing users to be uncertain about the order and results of transactions. For example, users may need to wait for a long time for transactions to be included on L1. If there are errors in transaction order or unsatisfactory results, it may result in financial losses caused by executed transactions.

In a highly Fluctuation market environment, the issues of latency and order changes are more prominent, as users rely on Arbitrage and Decentralized Finance services. In these cases, trading latency or order changes can directly lead to missed opportunities. Even regular traders may lack confidence in the confirmation time and order on L1, thereby casting doubt on the reliability and usability of the blockchain.

Therefore, the design goal of pre-confirmation is to address these deficiencies, especially to provide a more convenient and reliable transaction experience for users who are most affected by Rollup inefficiency.

How does pre-confirmation solve these problems?

Pre-confirmation solves these problems by providing users with transaction inclusivity, ordering, and execution guarantees. It provides users with ‘soft confirmation’ through a centralized L2 sequencer and issues pre-confirmation certificates to ensure that transactions will eventually be included on L1.

The main advantage of soft confirmation is to enhance the user experience. Users can immediately receive confirmation certificates after submitting transactions, ensuring that transactions are included on L1 in the expected order, reducing uncertainty, especially in transactions requiring rapid response such as Arbitrage. In addition, pre-confirmation also enhances users’ trust in the L2 system. As users’ confidence in the secure handling of transactions increases, the overall usage of the L2 ecosystem will also increase. Therefore, pre-confirmation plays a key role in improving the efficiency and convenience of Rollup processing.

Is pre-confirmation the final solution?

Although the soft confirmation from the centralized sequencer can improve the user experience through expected ordering and results, it relies on trust in the sequencer. Without legal or technical enforcement measures, users can only rely on the reliability of the sequencer. This dependency brings a possibility that transactions may not be included in the correct order or may not be included on L1 at all, thus failing to provide the expected stability guarantee for users.

Using Taiko as an Example to Explain the Concept and Practice of Based Preconfirmation

Taiko has put a lot of effort into implementing Based Preconfirmation, as this method is highly compatible with the core features of Based Rollup. If Based Preconfirmation can be successfully introduced into Taiko’s framework, it will not only significantly reduce the latency of transaction final confirmation, but also improve the user experience. In addition, this improvement will activate a variety of previously limited services, making them run efficiently on the Taiko network.

Before delving into the understanding of Based Preconfirmation, it is necessary to first review some key features of Taiko in order to have a more comprehensive understanding of the applicability and advantages of this method.

Taiko Case Analysis

Taiko fully demonstrates the core features of Based Rollup. It not only achieves full interoperability with the Ethereum infrastructure, but also strives to align with the security mechanisms of Ethereum. Taiko adopts the architecture of Based Rollup, which means it does not rely on centralized sequencers but relies on Ethereum validators to act as sequencers, responsible for transaction and block ordering.

In other words, Taiko’s sequencer and the Block proposer of the Ethereum are of the same type. This design gives them special responsibilities and incentives, such as maximizing the extractable value (MEV) rewards and other benefits of sequencer identity. Therefore, when problems arise in Taiko’s L2 sequencing process, these sequencers will naturally assume corresponding responsibilities due to their interest in the Ethereum ecosystem. This mechanism sets Taiko apart significantly from other Ethereum L2 projects in terms of operational responsibility.

In addition, it is worth noting that Taiko’s Based Rollup model is designed as a ‘Based Contestable Rollup (BCR)’, which aims to incentivize healthy competition. Through an open and permissionless design, Taiko ensures the decentralization of the system and allows anyone to participate, making the system more fair and transparent.

Pre-confirmation based on Based Rollup

So, what does the pre-confirmation model designed specifically for Based Rollup look like? The answer is “Based Preconfirmation”. This model aims to replace traditional soft confirmation mechanisms by directly verifying confirmations on L1.

Based Preconfirmation provides a system where some L1 validators voluntarily participate and provide preconfirmation services. As sequencers, these validators offer users verifiable predictions of Rollup transaction results. This provides users with a trusted guarantee of transaction inclusion and ordering, based directly on L1, enhancing the trustworthiness and reliability of the Rollup process.

Justin Drake first proposed the concept of Based Preconfirmation and introduced a specific role called “Preconfer”. Preconfer can provide users with signature guarantees and clarify the order and execution status of transactions. To ensure the reliability of commitments, each Preconfer needs to stake a certain amount of Margin. If they fail to fulfill their commitments regarding transaction order or execution status, they will face the punishment of the Slashing mechanism, which may result in partial or complete loss of Margin.

The Slashing mechanism has been widely used in the PoS stake of Ethereum to effectively curb malicious behavior. This mechanism not only strengthens the sense of responsibility of validators, but also establishes a certain level of trust between users and validators.

There are two situations that will result in Pre-Validators being subject to Slashing Punishment:

1. Liveness Faults : If a pre-validator fails to include a user’s pre-confirmed transaction on-chain for any reason, a liveness fault occurs. Since liveness faults are not always intentional, the penalty is relatively mild. These faults may result from network issues or interruptions in L1 or L2 blockchains, causing transactions to be incorrectly included on-chain. To protect honest pre-validators from undue punishment, the penalty for liveness faults is usually determined through negotiation between the user and the pre-validator.
2. Safety Faults: If a pre-committed transaction is included on-chain, but the result is inconsistent with the user’s initial request, a safety fault occurs. This inconsistency is entirely the responsibility of the pre-committer, so the punishment for safety faults is usually more severe. The pre-committer’s Margin will be fully confiscated, regardless of whether the issue is intentional.

To become a pre-validator of the Based Preconfirmation model, a Node (usually an L1 Block proposer) must accept the conditions of these Slashing mechanisms and stake the required Margin. Once approved, the pre-validator can provide services to users and generate income by charging service fees.

This fee model provides users with significant convenience, allowing them to bypass the inherent latency in Rollup transaction final confirmation. For example, after a user submits a pre-confirmation transaction through a personal wallet, they can immediately obtain a confirmation certificate from the pre-confirmation party.

Participants in the Based Preconfirmation can not only earn additional income by charging fees but also help optimize the transaction confirmation process of Rollup. This model not only improves the user experience but also provides a reliable and efficient transaction final confirmation solution for the entire L2 ecosystem, further enhancing its attractiveness and usability.

Why are users willing to pay for pre-confirmation fees?

This is actually closely related to the core purpose of pre-confirmation. Users are willing to pay fees for pre-confirmation because it directly addresses the inefficiency of Rollup in the final confirmation process, bringing significant convenience to users.

For example, when a user submits a pre-confirmed transaction on-chain through their personal Wallet on L2 Block, the standard transaction may require waiting for final confirmation, while the user requesting pre-confirmation can immediately receive assurance from the pre-confirmed party without latency to complete the transaction. At this time, the user may even see a green check mark in the Wallet interface, clearly indicating that the transaction has been successful.

Taking Decentralized Finance services as an example, when users conduct token exchanges on L2 Decentralized Finance platforms, pre-confirmation can provide additional guarantees for related transactions. In general, the quoted exchange rate or fees for transactions may not match the actual transaction results due to latency. However, through pre-confirmation, users can enjoy a fast and efficient transaction confirmation process, reducing the discrepancy between expected conditions and actual results, thus obtaining a more reliable service experience.

These use cases not only enable developers to provide more accurate services, but also bring users a more seamless and convenient user experience. This dynamic further supports the expansion of the L2 ecosystem, while also contributing to the rise of the wider L1 ecosystem. In addition, for the sequencer of Based Rollup, the additional income brought by pre-confirmation provides a substantial profit model. This design effectively addresses some of the traditional weaknesses of Based Rollup, making it an ideal choice for sequencers, combining reliability and attractiveness.

What are the challenges of Based Preconfirmation?

Based Preconfirmation is still a research field that is highly followed in the Layer2 projects driven by Rollup, represented by Taiko. Although this mechanism provides a clear solution to improve L2 performance and scalability while maintaining Decentralization, it still faces some challenges that need to be addressed in practical applications to achieve wider adoption.

First, when submitting transactions to Block in Preconfer, users may not be guaranteed absolute inclusiveness of the transactions. Although pre-confirmers provide collateral for transactions through stakeMargin, this mechanism still cannot fully resolve the problem of transactions not being included due to external interruptions. Especially when the value of the transaction exceeds the stake amount of the pre-confirmer, the pre-confirmer may abuse their authority to selectively include or exclude certain transactions, thereby bringing potential risks.

Another significant challenge is the profit model based on pre-confirmation. The main source of income for pre-validators is the pre-confirmation fee paid by users. However, if there is a shortage of pre-validators or insufficient participation, it may lead to market centralization and monopolistic tendencies. In such cases, pre-confirmation fees may be artificially raised, increasing the cost for users to conduct fast and efficient transactions, thereby posing a threat to the healthy development of the pre-confirmation ecosystem.

It is worth noting that the concept of Based Preconfirmation is relatively new, having only been proposed about a year ago. It will take some time to make it a “critical tool” to maximize the speed and efficiency of Rollup-driven L2 solutions. However, with Rollup firmly established as a core component of ETH Workshop’s scalability, further exploration of pre-validation to improve performance marks an important step in the evolution of L2 technology.

Especially Taiko has made significant progress in promoting the implementation of Based Preconfirmation. At the same time, Taiko has collaborated with Taiko Gwyneth, Nethermind, Chainbound, Limechain, Primev, and Espresso, among many partners, to jointly explore and develop application scenarios for Based Preconfirmation. These collaborations aim to further advance the L2 ecosystem, with more details to be discussed in subsequent chapters.

Pre-confirmation Eco-landscape View: Process Diagram Interpretation and Project Exploration

In this chapter, we will explore which projects are actively researching and promoting the development of pre-confirmation technology in the Rollup-driven L2 ecosystem. As the ecosystem is still in its early stages of development, we will use a flowchart to more intuitively illustrate and understand the specific process of pre-confirmation.

Pre-confirmation Process Diagram

Pre-confirmation is a complex process that requires close collaboration between L1 and L2, involving multiple roles, each with specific responsibilities. To provide a more intuitive understanding of this process, I have created a flowchart for a brief overview. It is important to note that this flowchart is intended to help explain the overall logic and does not strictly differentiate between the different features of Rollup and Based Rollup, but focuses on the general process at the fundamental level.

Before we go into the specific steps of the process diagram, let’s first get to know the roles and functions of the participants in the pre-confirmation process:

• User: Individual users who use L1 or L2 networks and are responsible for creating and submitting transactions. If users want pre-confirmation security, they will send the completed transaction to pre-validators.
• Preconferrer: During the preconfirmation process, the preconferrer is responsible for auditing and verifying the validity of transactions, and then providing preconfirmation guarantees to users. Through preconfirmation, users can quickly obtain transaction status assurance before the final settlement. If a node does not have preconfirmation qualifications, they act as non-preconf actors and primarily handle regular transactions instead of preconfirmation transactions, similar to standard validation nodes.
• L1 validators（L1 Validator）： Responsible for the final verification of transactions and Blocks on the L1 network. Once the pre-validator submits the transaction data, L1 validators will verify it and record the final data on the L1 Block chain to ensure the integrity of the transaction and compliance with Consensus rules.
• Preconfirmation Challenge Manager: When there is a dispute or issue in the preconfirmation process, this role is responsible for investigating the problem and taking appropriate measures to resolve the dispute. This role plays a critical role in maintaining the fairness and reliability of the preconfirmation process.

Now, let’s go through the specific process of pre-confirmation according to the flow chart in order:

1. The user sends the transaction request to the pre-validator in the pre-validator participant to initiate the pre-confirmation process.
2. The pre-validator audits the transaction and sends a pre-confirmation receipt, promising the user that the transaction will be included in the L1 Block, thereby providing the user with preliminary final confirmation assurance.
3. Pre-confirmers submit transaction data to L1 validators that needs to be included in the L1 Block. This data may be a single transaction or aggregated data processed by the L2 sequencer.
4. L1 validators validate the submitted transaction data or aggregated data and record it in the L1 Block to ensure that it complies with the Block chain Consensus rules.
5. After a period of time, the L1 Block containing transaction data or summary data reaches finality, and the transaction is formally confirmed.
6. Users can check the final result of the transaction through the L1 Node and, if necessary, use the relevant information to raise any potential pre-confirmation disputes or challenges.
7. If a transaction occurs that does not correctly include what was promised on L1, the pre-validator will face penalties from the pre-confirmation challenge manager, such as being Slash Margin or freezing their stake assets.

Exploration of Related Projects

The following will analyze in detail the main projects actively participating in the pre-confirmation ecosystem and their relevant roles in the process. Although these projects occupy specific roles in the process diagram, the responsibilities they actually perform may vary slightly. Therefore, this overview is intended to provide a foundational understanding and serve as general guidance. To maintain clarity, the projects in each category are listed in alphabetical order.

Preconfer Validators

• Astria: Astria is committed to replacing centralized sequencers with a Decentralization sequencer network, and supports multiple Rollups to share this network. This design provides Rollup with stronger anti-censorship capabilities, faster Block finality, and seamless cross-Rollup interaction. To achieve fast Block finality, Astria introduces pre-confirmation function, enabling Rollup to provide fast transaction confirmation and enhance anti-censorship capabilities, significantly improving user experience.
• Bolt by Chainbound: Bolt is a pre-confirmation protocol developed by Chainbound, providing near-instant transaction confirmation services for ETH users. It operates based on a trustless participation mechanism and economic collateral, while being compatible with the existing MEV-Boost PBS pipeline, creating new revenue opportunities for proposers. The core function of Bolt is L1 pre-confirmation, providing immediate finality for basic transactions such as transfers and authorizations, thus improving user experience. By shifting the responsibility of including transactions from centralized block builders to proposers, Bolt enhances the system’s censorship resistance. At the same time, the collateral proposer registration mechanism ensures a trustless environment, flexibly supporting various types of Smart Contracts.
• **Espresso **: Espresso is a protocol dedicated to enhancing the interoperability of the blockchain ecosystem. It adopts the HotShot Byzantine fault tolerance (BFT) Consensus protocol to achieve transaction ordering and data finality between multiple chains. Espresso includes Espresso Network and Espresso Marketplace, which work together to provide fast transaction finality and efficient interoperability, aiming to improve the scalability and security of the blockchain ecosystem.
• Ethgas：Ethgas is a market for trading Block space, with transaction matching managed by a centralized system, and on-chain processes executed through Smart Contract. Ethgas provides two main functions: Include Pre-Confirmation (ensuring transactions are included within a specified Gas limit) and Execute Pre-Confirmation (ensuring transactions reach a specific state or result). Ethgas focuses on protecting transaction privacy in Block space trading and is known for its neutrality in operation objectives.
• Luban: Luban focuses on developing a Decentralization sequencing layer to connect the ETH network and Rollup for transaction data. The sequencing layer is designed as a Decentralization system that separates the roles of proposing and executing. Luban’s pre-confirmation feature significantly improves transaction reliability by ensuring the executability of transactions before they are included in the ETH network, while helping optimize key factors such as Money Laundering, Gas prices, and MEV.
• Primev: Primev is developing a proposer network integrated with MEV, combining pre-confirmation with MEV functionality to build an efficient and reliable peer-to-peer network. This network records the commitment of ETH block transaction execution and incentivizes proposers through reward or penalty mechanisms. Primev allows MEV participants to set specific execution conditions for their transactions, while block builders and validators can commit to meeting these conditions, ensuring pre-confirmation of transactions. Based on EIP-4337, Primev supports flexible pre-confirmation and gas fee options, improving transaction processing efficiency and further optimizing user experience.
• Puffer Unifi: Puffer Unifi’s Actively Validated Services (AVS) is built on EigenLayer and focuses on solving pre-confirmation challenges in the Ethereum ecosystem, especially in the architecture of Based Rollup. Puffer Unifi AVS utilizes EigenLayer’s stake functionality to support the pre-confirmation participation mechanism, aiming to improve the efficiency of transaction final confirmation. With the development of Based Rollup, the demand for reliable pre-confirmation providers continues to rise, and the goal of Puffer Unifi AVS is to meet this demand. Its ultimate vision is to achieve efficient pre-confirmation without changing the core protocol, thereby promoting the sustainable rise of the Ethereum ecosystem.
• Skate: Skate’s pre-confirmation AVS relies on EigenLayer to re-stake assets, providing economic security for all Cross-Chain Interaction operations. This AVS verifies the bundled data and information required for Cross-Chain Interaction exchange, which is then signed and prepared for execution by Skate’s relayer. Through this process, Skate AVS achieves pre-confirmation of data, significantly improving the reliability and efficiency of Cross-Chain Interaction transactions.
• Spire: Spire’s Based Stack is a Rollup framework based on Ethereum (ETH) that provides support for developers to build AppChains. This framework allows AppChains to interact directly with Ethereum and customize their sequencing methods, supporting functions such as Cross-Chain Interaction Exchange and optimizing user experience through pre-confirmation. Based Stack supports multiple execution environments, ensuring the sequencing income of AppChains and maintaining compatibility with traditional shared sequencers. As an Open Source project, Based Stack provides developers with complete tools and resources needed to build and manage AppChains, thereby promoting the interoperability of AppChain development and the Ethereum ecosystem.
• Taiko Gwyneth：Taiko Gwyneth is a Rollup design being developed by Taiko, classified as a based Rollup architecture. Its goal is to achieve full interoperability with the Etheruem network, while directly managing transaction sequencing on the Ethereum network. This design fully leverages the security and Decentralization features of the Ethereum network, while providing high throughput and fast final confirmation. Currently, Taiko is running a proposer mechanism to assist Block creation, and exploring a pre-confirmation mechanism to promote profitable Block production within the community. This mechanism aims to optimize Block time scheduling and data publishing efficiency. To achieve these goals, Taiko is deeply cooperating with projects such as Nethermind and Gattaca.

L1 validators

• Chorus One：Chorus One is a project that provides validation services and infrastructure for blockchain networks, focusing on stake services in multiple protocols to enhance the stability and security of the network. As L1 validators, Chorus One’s responsibility is to validate transactions and generate blocks to improve the reliability and efficiency of the entire network. Recently, Chorus One has shown great interest in pre-commitment technology, even holding related special events during Devcon 2024.

Research

• Nethermind: Nethermind is a project dedicated to developing an Ethereum client and tools, with the core goal of enhancing the performance and stability of the Blockchain network. By introducing advanced optimization techniques, Nethermind actively promotes the increase of transaction throughput on the Ethereum network. In terms of precomputation technology, Nethermind has been conducting in-depth research and has submitted a proposal to Taiko’s funding program to accelerate the deployment of precomputation functionality on the Taiko Mainnet. This proposal is based on Nethermind’s RFP-001 project and will be implemented in two phases: the first phase will test the precomputation functionality among a limited number of authorized participants; the second phase plans to gradually expand the application scope of precomputation.

Looking to the Future

Taiko and many other Layer2 projects, whether they adopt the Based Rollup architecture or not, are working to optimize the inefficient transaction finalization process in traditional Rollup. By introducing the concept of pre-confirmation, these projects are building a transaction confirmation system that allows users to confirm transactions more quickly and reliably. Through this approach, these projects are constantly exploring how to improve user experience and establish user trust.

Taiko fully utilizes its positioning as a Layer 2 project based on Based Rollup, actively promoting the implementation of Based Preconfirmation mechanism, thus achieving comprehensive interoperability and decentralization with Ethereum. By providing users with fast and reliable transaction final confirmation guarantee, Taiko significantly improves transaction processing speed and reliability, thereby significantly improving user experience.

However, multiple industry experts, including Ed Felten of Arbitrum, have pointed out that there is still a lack of mature middleware that can fully support pre-confirmation. This indicates that the maturity of pre-confirmation technology and the profit model of pre-confirmers still face challenges, and these issues need to be further addressed.

As described in this article, more and more projects and participants are actively entering the pre-commitment field, each bringing their own unique innovative solutions aimed at improving the performance and efficiency of the Ethereum Layer2. This trend also fits into the general rule of continuous optimization after the initial implementation of the system concept. I believe that this stage marks an important node in the evolution of the L2 system, and is an exciting positive development in the current L2 ecosystem.

By pre-confirming to enhance user convenience, it may not only have a profound impact on fields that focus on speed and efficiency such as Decentralized Finance and gaming, but also may reconnect the previously scattered parts of the Ethereum ecosystem by improving the performance of Ethereum’s Layer2. This performance improvement may enable more Type-1 Ethereum Layer2 projects to achieve integration with the Depth of Ethereum, thus unleashing the potential that was previously difficult to obtain due to speed limitations. These developments are bound to have a profound impact on the entire Ethereum ecosystem.

Pre-confirmation is still a challenging and bumpy road. However, pioneers like Taiko are facing the difficulties and focusing on providing more convenience for users. Innovation has never been easy, but as a supporter of Ethereum and its Layer2 ecosystem, I sincerely respect and encourage their efforts.