Transaction Sequencers

Transaction Sequencers are centralized or decentralized components responsible for determining the order of transactions before they are submitted to the main blockchain for final settlement. In Layer 2 rollups, the sequencer plays a vital role in ensuring high throughput by batching transactions and providing fast confirmation times.

However, the power to order transactions also grants the sequencer the ability to extract value through reordering or censoring transactions. Consequently, the industry is moving toward decentralized sequencing models that distribute this power to prevent abuse.

A fair sequencer is essential for maintaining trust and ensuring that market participants are treated equally. It serves as the traffic controller for the entire protocol ecosystem.