Robinhood’s Rollup Is Just the Beginning: Six Key Drivers of the L2 Boom
Why Everyone Is Launching Their Own Rollup
Robinhood has just launched its own Layer 2, built on Arbitrum’s technology stack. Kraken recently followed with Ink, a rollup built using the OP Stack. Before them, Coinbase launched Base and Uniswap introduced Unichain — both also built on the OP Stack. Paradex took a different path with a ZK rollup on StarkNet to support a high-performance perpetual DEX. Meanwhile, ZKsync now hosts two custom L2: Lends, tailored for social media, and Sophon, optimized for gaming.
This growing trend raises a key question: why are exchanges, DeFi protocols, and applications increasingly building their own rollups?
To answer this, it's worth revisiting the fundamental differences between L1 and L2 scaling.
Layer 1 vs Layer 2: Different Scaling Philosophies
Layer 1 scaling focuses on changing the base consensus — such as with Hyperledger or DAG-based protocols like Sui, which offer near-instant finality. The trade-off is often decentralization: these systems can become more centralized and prone to collusion, especially in institutional settings.
Layer 2 scaling, in contrast, builds on Ethereum’s security but moves computation off-chain. Bitcoin’s Lightning Network is an example of L2 designed for payments — fast but limited in scope. Rollups go further, supporting general-purpose smart contracts and full EVM compatibility.
There are two main types of rollups:
Optimistic Rollups (e.g., OP Stack, Arbitrum, Base): Transactions are assumed valid unless fraud is proven within a challenge window (typically seven days).
ZK Rollups (e.g., StarkNet, zkSync, Zircuit, Taiko): Transactions are verified through zero-knowledge proofs before being posted to Ethereum, ensuring validity and faster finality but requiring more computation.
Rollup Architecture: Key Components
Every rollup has three core components:
Sequencer – Orders and processes transactions on L2
Verifier – Validates proofs and publishes them to L1
Prover – (ZK rollups only) Generates cryptographic proofs
Sequencers are currently centralized in most rollup designs, which introduces a key governance and economic vector: the sequencer earns fees and determines ordering. Some designs are beginning to challenge this model. For example, Taiko implements a based rollup, where any Ethereum validator can act as a sequencer, pushing the architecture closer to Ethereum’s decentralization ethos.
Why Launch a Custom Rollup?
Launching a custom rollup provides a number of strategic advantages:
Custom environment: Teams can tailor the fee structure, user experience, and execution layer to their application needs. Robinhood and Kraken are not just participating in the Ethereum ecosystem — they’re shaping their own.
Stronger security guarantees: Rollups inherit Ethereum’s security model. Once a transaction is finalized on L1, it cannot be reversed, unlike in permissioned or consortium blockchains.
Feature flexibility: Rollups can introduce unique features.
- Zircuit integrates AI-based transaction screening.
- Unichain offers revert protection, reducing friction for end users.
- Sophon is optimized for low-latency gaming environments.Privacy and compliance: Some rollup designs allow L2 transactions to remain private, at least from L1 observers, enabling experimentation with compliance-friendly, privacy-preserving use cases.
Composability with Ethereum: Especially for EVM-equivalent ZK rollups, teams can fork existing DeFi protocols or deploy new financial infrastructure, including tokenized real-world assets, with minimal changes.
When Not to Launch a Custom Rollup
Custom rollups offer flexibility, but they’re not always the right tool. In many cases, building directly on an existing L2 is more efficient — both technically and economically. Here are key situations where launching your own rollup may not be justified:
You Don’t Need Execution Customization
If your application runs well on existing rollups and doesn't require features like custom gas policies, private mempools, or specialized compliance logic, a standard smart contract deployment on existing L2s that already offer customised features.You’re Building a Product, Not Infrastructure
If you're launching a specific financial product (e.g., tokenized ETF), a vertical dApp (e.g., lending or trading protocol), or any service meant to plug into existing DeFi ecosystems, there’s no strong case for owning the infrastructure layer.You Want to Integrate with Existing Users and Liquidity
Rollups are still fragmented. If composability, interoperability, and network effects matter for your app, deploying on a shared rollup allows immediate access to wallets, bridges, oracles, and liquidity pools.
Launching a rollup is a long-term infrastructure commitment. Unless your product clearly demands custom control, scalability, or vertical specialization, shared L2s will offer faster go-to-market, lower overhead, and better integration out of the box.
Conclusion: 6 Trends Behind the L2 Boom
Robinhood’s rollup is not an isolated move — it’s part of a broader structural shift in onchain infrastructure. Here are six trends driving this wave of rollup adoption:
Vertical Integration by Exchanges and Protocols
Platforms like Robinhood, Kraken, and Coinbase are moving down the stack to control user experience, execution environment, and monetization.Commoditization of Rollup Infrastructure
Frameworks like OP Stack, Arbitrum Orbit, and zkSync’s ZK Stack have made launching a rollup easier, cheaper, and faster.Rollups as Strategic Moats
Custom L2s allow tailored features such as private order flow, custom gas policies, and user protection, e.g., Unichain’s revert protection, or Zircuit AI transaction monitoring by sequncer.EVM Equivalence and DeFi-compatability
Full EVM compatibility enables rapid deployment of existing DeFi primitives, RWA protocols, and liquidity engines with minimal code changes.Modular and App-Specific Design
Teams are launching L2s optimized for their own verticals — gaming (Sophon), social (Lends), trading (Paradex) — rather than using generic shared chains.Push Toward Decentralized Sequencing
Emerging models (e.g., Taiko’s based rollups) aim to reduce single points of failure and bring L2s closer to Ethereum’s decentralization ethos.
Closing Thoughts: Why the Trend Will Accelerate
The recent wave of custom rollup launches is not incidental — it’s strategic. A rollup allows:
Greater control over assets, user access, and protocol parameters
The ability to enforce finality through Ethereum without compromising decentralization
Custom execution layers tailored to gaming, finance, or social use cases
Faster block production, privacy features, and fee control
This is why Robinhood and Kraken are following the path set by Coinbase and Uniswap. And it’s why we will see many more rollups emerge — application-specific, highly customizable, and economically strategic.