TL;DR
A merged mined chain can be used as a fully decentralized rollup alternative to achieve 1000 tps, while using the current ETH1, and 100K+ tps using ETH2 data chains.
Description
Here is how this would work:
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To participate in the network, a node would register in a smart contract on the main net.
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There would be a single, randomly selected proposer for each epoch (block range)
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Transactions would use aggregated BLS signatures instead of ECDSA, otherwise, the merged mined chain would be identical to ETH1.
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Each proposer would submit a block by
- submitting block body as calldata, and
- submitting the state root to the ForkTree smart contract.
The block would aggregate all transaction BLS sigs into a single BLS sig. A fund transfer transaction would then take as little as 10 bytes or 160 gas (100 times less compared to what it takes now)
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The fork choice used by the ForkTree contract would be simply the longest chain.
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To exit, one would simply burn the funds on the merge mined chain and submit the receipt against a finalized root on in the ForkTree smart contract
Advantages:
- full ETH compatibility
- immediate exit
- no need to wait for 7 days as in optimistic rollup
- fully decentralized - no single operator
- security: identical to the main net!
- Satoshi Nakamoto saw merged mining as a way to scale blockchain!
Future: one could use each of ETH2 data chains as data storage for merge mined chains. This could bring TPS to 100,000+!!!