Following our discussion of PBS and its limitations, we now turn to a novel approach in transaction ordering: Application-Specific Sequencing (A2S). This concept represents a fundamental shift in how we think about block building and MEV extraction, offering tailored solutions for different types of blockchain applications.

Introduction of Application Specific Sequencing

Building on our previous analysis of MCP, we've identified an innovative alternative to traditional proposers: treating each dApp as an independent block proposer. Under this mechanism, dApps can autonomously construct their blocks, which are ultimately aggregated and state-transitioned at the Ethereum L1 settlement layer. This design offers a fresh perspective on addressing the current challenges of proposer centralization.

Defining A2S!

A2S represents an innovative blockchain architectural design aimed at fundamentally addressing the MEV distribution challenge. This mechanism empowers decentralized applications (dApps) with autonomy over their transaction sequencing, freeing them from complete dependence on the underlying blockchain's uniform ordering mechanism. Through this approach, each dApp can implement more precise and equitable transaction ordering control based on its specific business logic and user requirements.

The introduction of A2S has sparked extensive community discussion, with its core value manifesting across multiple dimensions:

In terms of MEV governance, A2S internalizes MEV at the dApp level, enabling applications to properly capture MEV profits that rightfully belong to them. This design not only brings users more efficient price discovery mechanisms and potential gas fee compensation but fundamentally improves the fairness of MEV distribution.

From a protocol architecture perspective, the design allowing dApps to operate and sequence independently before final aggregation at the settlement layer effectively turns each dApp into an execution shard of the protocol. This innovative architecture significantly enhances the underlying protocol's scalability.

For dApp developers, A2S offers unprecedented autonomy. They can not only design transaction sequencing strategies tailored to their application characteristics for stable revenue, but also choose programming languages and development tools best suited to their application scenarios, greatly improving development efficiency and application performance.

While A2S presents an innovative solution, critics highlight several key concerns:

The trust assumption issue stands primary among these challenges. As transaction sequencers, dApps still require a degree of trust when constructing partial blocks. This trust requirement becomes particularly pronounced in cross-dApp scenarios, potentially complicating inter-application collaboration significantly.

Technical limitations pose another crucial challenge. dApps' block construction capacity isn't unlimited - transactions risk reverting when bundles exceed the underlying protocol's block size limits. More complexly, when the total volume of transactions submitted by multiple dApps exceeds block capacity, determining bundle prioritization remains an unresolved core issue.

These challenges demand careful consideration and resolution as the A2S protocol continues to evolve.

Feasibility Analysis of A2S

Analysis of A2S Design Philosophy

In the current blockchain ecosystem, solutions to MEV challenges have primarily focused on the protocol layer. However, this approach is not only complex to implement but also contradicts the natural laws of value capture. We propose a key perspective: decentralized applications (dApps) should be the direct beneficiaries of profits, while the protocol layer should focus on value accumulation and transmission.

This paradigm shift stems from a fundamental question: Why should MEV value generated by applications flow to network validators rather than being captured and distributed by the applications that create it? This thinking gave birth to the A2S paradigm. By empowering applications with autonomous control over transaction sequencing, A2S both protects user interests and ensures value flows back to its actual creators.

Source: https://www.syncracy.io/writing/application-fee-capture

The emergence of A2S aligns perfectly with the current "Fat Application" development trend. As the DeFi ecosystem grows, the increasing scale and complexity of applications have made traditional single global state machines inadequate for diverse application needs.

This evolution manifests across multiple dimensions: Applications require customized execution environments, flexible economic models, and granular access control mechanisms. Leading applications like Uniswap developing their own rollup solutions demonstrates the growing demand for technical sovereignty among decentralized applications, validating the inevitable trend toward blockchain ecosystem modularization.

Future Vision of A2S

The future development of A2S will focus on two core areas:

First is standardization. By establishing comprehensive sequencing strategy frameworks and providing best practices for different types of applications, A2S aims to lower technical barriers and promote wider adoption.

Second is infrastructure optimization. This involves developing cross-application infrastructure, such as shared sequencer networks, enhancing ecosystem composability while maintaining application autonomy.

This evolution will reshape blockchain's value capture model: the application layer generates revenue through innovative sequencing mechanisms and optimized user experiences, while the protocol layer focuses on providing secure and reliable value storage infrastructure. As this paradigm matures, we can expect to see more applications adopting A2S to enhance their value capture capabilities.

A2S Market Status Analysis

Overall, A2S is still in a very early stage. We're pleased to see increasing attention to research in this area, with projects like Sorella and Semantic Layer currently focusing on A2S.

Sorella aims to address key challenges triggered by MEV on Ethereum, dedicated to developing innovative solutions that improve DeFi transparency, fairness, and efficiency. Their project Angstrom, a Hook for Uniswap V4, aims to protect both LPs and traders simultaneously, promoting sustainable development of decentralized exchanges. Angstrom addresses both the "Loss Versus Rebalancing" (LVR) faced by LPs and Sandwich Attacks suffered by users, laying the foundation for a fairer and more efficient trading environment.

Semantic Layer is building a decentralized infrastructure focused on improving transaction execution and user experience in blockchain networks. Through the introduction of MEGA TX transaction types designed in the Semantic layer, dApps can specify how to sort and aggregate transactions using Verifiable Sorting Rules (VSR) and Verifiable Aggregation Rules (VAR).

Summary

Looking ahead, A2S applications are expected to play a crucial role in improving network security, censorship resistance, and fairness. Through community collaboration and continuous technical innovation, we can overcome existing challenges, fully leverage the advantages of A2S, and drive the blockchain ecosystem toward a more mature and robust direction.

While challenges remain, through collaborative effort and continued innovation from ecosystem participants, A2S stands poised to become a key driver in reshaping blockchain's value capture model. Let us look forward to a more decentralized, fair, and efficient blockchain future — Make Apps Great Again.