🔶Settlement Layer (Including State Consensus)

The Settlement Layer finalizes transactions by resolving disputes and verifying evidence, while bridging different Execution Layers. It receives state and results from Execution Layer processing, ensuring "soft" security against fraud and batching, and achieving consensus on all processed states and results.

The Settlement Layer maintains a registry for deployed Rollup-chains and crucial information like state, staking, sequencer lists, sequencer management, and fraud proofs, providing security and settlement services for Rollup-chains.

In ME Network, the Settlement Layer also offers additional functionalities such as liquidity sources and serves as a bridge hub, hence called ME HUB.

• Proof Verification and Dispute Resolution: The Settlement Layer provides a place for Rollups to publish proofs for external verification. This is particularly useful for Optimistic Rollups that rely on fraud proofs.

• Bridging Hub: If multiple Rollups share a common Settlement Layer, they can be bridged. This eliminates the need for establishing separate bridges between Rollups.

• Source of liquidity: Liquidity present in the Settlement Layer can be utilized by all the Rollups above. Rollups can create their own tokens besides using the main chain's tokens, facilitating liquidity and free exchange through natural cross-chain capabilities to the ME HUB settlement layer.

In a modular blockchain, the Settlement Layer provides foundational consensus and security mechanisms for the Execution Layer, significantly reducing operational costs by eliminating the need for deploying verification nodes when constructing their Rollup-chain.