Unichain, launched by Uniswap Labs earlier this year, has become the first Ethereum Layer 2 network to process blocks using a trusted execution environment

TEEs, for short, are a type of hardware solution used widely outside of crypto that some experts say is a promising avenue for scaling and securing blockchains.

Unichain, the Ethereum Layer 2 network launched by Uniswap Labs earlier this year, has become the first to process blocks using a trusted execution environment (TEE).

TEEs, which are used widely in industries outside of crypto, are a type of hardware solution that some experts say are a promising avenue for scaling and securing blockchains.

The TEE in question here is powered by Rollup-Boost, middleware code co-developed by MEV experts Flashbots and Uniswap Labs. Rollup-Boost moves much of the transaction sequencing responsibilities typically performed by centralized transaction sequencers into a "trusted execution environment" that lives on physical chip hardware.

Uniswap’s announcement is part and parcel of the semi-competitive, semi-collaborative energy seen in the Optimism ecosystem. Earlier this week, Base, the L2 incubated by Coinbase that also uses the OP Stack, reached “stage 1” readiness, referring to Vitalik Buterin’s framework for measuring rollup decentralization.

Ink, the L2 developed by Kraken that — like Unichain — is part of the Optimism "Superchain," broke ground by launching decentralized fault proofs. As much as the networks must work to differentiate themselves, as part of the interconnected Superchain, they are all connected through shared governance and a universal bridging protocol for cross-chain transfers and communication.

"TEE-based block building is the next step toward that vision, laying the groundwork for further decentralization. Future upgrades like Flashblocks and the Unichain Validation Network will continue to improve performance and push what’s possible," Uniswap Labs writes.

Spill the TEE

In addition to ensuring "fair transaction ordering," by sequencing transactions based purely on priority fees, Rollup-Boost also lays the groundwork for dramatically speeding up Unichain's processing times. The TEE will also support "Flashbocks," an upcoming Flashbots tool that splits Unichain blocks into four 200-millisecond sub-blocks.

"In most rollups today, sequencing happens offchain and can’t be fully audited. TEE-based block building changes that. Transactions are sequenced based on transparent ordering rules enforced within the TEE," Uniswap Labs wrote in a blog on Friday.

Trusted execution environments are secure, isolated areas within a computer's processor or memory that protect sensitive data and code from unauthorized access or tampering. They ensure confidentiality and integrity by running critical operations in a shielded environment, separate from the main operating system.

Rollup-Boost was designed, in part, to mitigate the adverse effects of maximal extractable value, where validators can snipe value from users by reordering transactions (MEV). Uniswap founder Hayden Adams previously told The Block it prevents negative MEV because "the longer the block times, the more MEV builds up."

"Transactions on Unichain go into a private, encrypted mempool. Priority ordering reduces opportunities for MEV extraction. Combined with verifiable block building, this kind of predictability and verifiability strengthens the guarantees that developers can rely on to build value-capture mechanisms like MEV taxes," Uniswap wrote.

In time, Uniswap Labs and Flashbots intend to add "execution attestations" that will enable anyone to independently verify that blocks were constructed as intended. Labs also intends to introduce the Unichain Validation Network (UVN), a system where people can stake UNI and run nodes within the system to verify the state of the network.

Bad swap?

While Unichain attempts to push at the boundaries of L2 development, not all community members have been supportive. The project was built largely in secrecy in 2024 without input from the Uniswap DAO.

Some of these concerns were amplified recently after the Uniswap Foundation put forward a massive $165.5 million spending program to spur adoption of Unichain and Uniswap v4, which mainnetted around the same time.

"Unichain isn’t owned by the DAO in any capacity," @Tiza4ThePeople wrote Friday on X. "If it ends up being profitable, the DAO only receives 65% of the upside. So why is the DAO spending $45M in $UNI to incentivize it?"

Adams previously declined to comment on the proposed "fee switch," which would direct some Uniswap protocol revenues earned by liquidity providers to UNI token holders. It's something of a sore issue for some holders, who expected the switch to go live years ago.

Some think Unichain could be another way of compensating UNI holders. Approximately 65% of Unichain net chain revenue will be directed to UVN validators and stakers once the program goes live later this year.