When using Layer 2, you enjoy speed and low fees. You think you are trading on a decentralized network? In reality, No. Most leading Layer 2s are currently operating in the Training Wheels phase, where network control lies in the hands of a single entity called the Sequencer.
๐ธ What Is A Sequencer?
On Ethereum (Layer 1), thousands of Validators order and verify transactions together. This is secure but slow and expensive.
On Layer 2, to achieve speed, they remove that complex consensus and replace it with ONE single server called the Sequencer.
The Sequencer receives your transactions ๐ Orders them ๐ Compresses them into a Batch ๐ Submits to Layer 1.
๐ธ Currently, Sequencers of major L2s are Centralized and operated by the project teams themselves. This leads to 3 major risks:
Single Point of Failure. If the Sequencer server has a software bug, loses power, or gets DDoS attacked, the entire L2 network goes Down. You cannot transfer, cannot cut losses, cannot do anything until the team restarts the server.
Censorship Risk. Since the Sequencer decides transaction order, it also has the power to reject your transaction. If forced by regulators, a centralized Sequencer could blacklist your wallet address and freeze your operations on L2.
MEV Monopoly. The Sequencer knows the order of buy/sell orders in advance. It can insert its own trades before or in between to extract profit. Currently, these MEV profits flow 100% to the Sequencer operator, instead of being shared with the community.
๐ธ Theoretically, if the Sequencer censors you, you can submit transactions directly to Layer 1. However, this is technically complex and expensive; average users effectively cannot do it.
๐น For L2s to truly mature, they MUST transition to Decentralized Sequencers or use Shared Sequencers. Only then will power be redistributed to the community.
Do you accept the risk of your assets depending on a single server in exchange for cheap fees, or do you prioritize the absolute safety of Layer 1?
News is for reference, not investment advice. Please read carefully before making a decision.
