Deep Dive into RaaS: Rollup-as-a-Service Models and Revenue Streams
TechFlow Selected TechFlow Selected
Deep Dive into RaaS: Rollup-as-a-Service Models and Revenue Streams
In this article, we will provide a quick overview of the products sold by RaaS providers, how they differentiate from each other, how they make money, and share some of our internal perspectives on the RaaS business.
Navigating Web3 tides with focused insightsAuthor: Myles O'Neil
Compiled by: TechFlow
Introduction
One category of companies we’ve been closely watching is Rollup-as-a-Service providers (“RaaS”). In simple terms, RaaS providers help application developers launch rollups quickly by selling “off-the-shelf” products such as sequencing, indexing, and analytics.
In this article, we’ll provide a quick overview of the products RaaS providers sell, how they differentiate themselves, how they make money, and share some of our internal perspectives on the RaaS business.
RaaS Services/Products Offered
While RaaS offerings are still in their early stages, we’ve observed that most RaaS providers sell a similar bundle of services and products. Based on conversations with RaaS founders, here’s roughly what that bundle includes.
Services
-
Similar to traditional B2B companies, RaaS providers typically start by selling services (note: surprisingly, the classic “services-to-product” strategy works very well in crypto).
-
As part of the service offering, RaaS providers often act as technical consultants, helping you evaluate rollup stacks (e.g., OP Stack, Arbitrum Orbit) and decide which stack best suits your application.
-
This service is highly valuable, so it's worth elaborating. The primary customers of RaaS providers are startups looking to launch applications on their own dedicated rollup. For these teams, the priority is building the application and acquiring users—spending months learning rollup frameworks isn’t something they want or should have to do. Since RaaS providers base their entire business on understanding rollup frameworks and building developer tools around them, they’re uniquely positioned to help startups assess available framework options.
-
For example, they can help startups answer questions like: What are the trade-offs between different frameworks and DA layers? Are there customizations that could improve the rollup for the application? What are the trade-offs of adding customization (e.g., increased integration complexity)? By providing guidance based on real-world customer experience, they can save application teams months of development time.
Infrastructure Products
-
Sequencer: Running a sequencer is high-risk—if the sequencer fails, your rollup becomes unusable, leading to poor user experience. RaaS providers offer highly reliable, managed sequencing through redundancy. If your sequencer goes down, they ensure a fast failover process so your rollup stays online with minimal downtime. Additionally, you need to pay DA costs on Layer 1, and offset sequencing fees accumulate on your rollup. For smart contract rollups on Ethereum, the 7-day withdrawal period means you must always have at least a week’s worth of ETH ready to cover DA costs. RaaS providers help manage this complexity, and some even provide the liquidity needed for DA costs on Layer 1.
-
RPC: Unreliable RPC endpoints also hurt user experience, as seen during Optimism and Arbitrum airdrops. If users transact via your RPC node, run large queries, or call contracts, RaaS providers ensure new nodes automatically spin up to meet demand.
Developer Tools
-
Internal tools: Since RaaS customers operate both the rollup and the application, they require secure infrastructure to protect multisig keys used for software upgrades. Some providers also offer dashboards for analytics, activity monitoring, and alerts to notify you when issues arise.
-
Other tools: It’s hard to cover everything in this category, but at minimum, rollup operators need data indexing tools to query on-chain information, standardized interfaces for actions like token minting/burning or other transactions, and access to off-chain oracles.
-
User interface tools: At a minimum, rollup users will need a way to bridge to your rollup, multiple wallet options (including account abstraction infrastructure), and a blockchain explorer comparable to those on Layer 1 apps.
RaaS GTM Strategy
There are currently at least six RaaS providers in the market, all largely competing for startup clients. We observe that RaaS providers typically use one of three GTM approaches to differentiate their offerings.
Vertical Integration (e.g., Eclipse)
-
Rollup frameworks and RaaS providers sell related, tightly coupled products, making vertical integration a natural choice. Beyond economic incentives, there are strategic reasons for both parties to pursue vertically integrated offerings.
-
From the framework’s perspective, a RaaS product brings them closer to end customers. This proximity enables tighter feedback loops to guide product decisions. They might even extend RaaS support to third-party frameworks and incorporate best-in-class components into their offering.
-
Like any emerging, highly competitive tech category, rollup frameworks face a major challenge: finding a monetization strategy that doesn’t hinder adoption. RaaS products offer the most direct path to achieving both goals. RaaS solutions can drive framework adoption by solving real pain points, while selective monetization allows profitability without burdening self-operators.
-
The main challenge with this approach is resource constraints. Building a RaaS business in parallel with a rollup framework may exceed operational capacity.
Partnering with a Framework (e.g., Conduit)
-
RaaS providers aligned with a specific framework (like OP or Arbitrum) tie their offering to that ecosystem. This alignment provides strong distribution advantages.
-
For example, by partnering with Optimism, Conduit became the default option for startups choosing Optimism as their stack. Others, like Slush, are aligning with emerging frameworks like Starknet to gain distribution in alternative ecosystems.
-
Beyond distribution, this focus allows full concentration on building an excellent product. Consider a recent case study: Aevo switched its RaaS solution to Conduit because Conduit runs the latest version of Optimism, significantly improving their product. By focusing on a single stack, Conduit ensures customers always run on the most up-to-date codebase.
-
The downside is that no single framework supports all use cases, potentially limiting market reach (at least until expanding to support others).
Framework-Agnostic (e.g., Caldera)
-
Framework-agnostic RaaS providers support multiple rollup frameworks (e.g., OP, Arbitrum) with their products and services.
-
If a framework-agnostic provider becomes the first point of contact for startups, the underlying framework may become just a technical enabler rather than a brand signal.
-
This approach gives RaaS providers more flexibility during onboarding. By running multiple frameworks in production, they learn which components deliver the most value and apply these insights when advising new clients.
-
Like vertical integration, the main challenge is resource intensity. Supporting each framework requires significant investment, and trying to support too many may result in immature products.
RaaS Business Model
Currently, RaaS providers have two main revenue streams: (i) sequencing fees and (ii) infrastructure and tools. Based on our observations, the service component is typically offered for free.
Sequencing Fees
-
RaaS providers run sequencers that order transactions for applications, and in return, charge a fee.
-
We see two models for charging sequencing fees: (1) revenue share, where the application shares a portion of transaction fee revenue paid by end users; and (2) flat monthly SaaS fees for hosted sequencing.
-
Fee dynamics are interesting—let’s briefly discuss. Running a sequencer involves fixed costs and variable costs that scale with transaction volume. As mentioned earlier, some providers also assume risk by fronting DA costs on Ethereum for their clients. Ideally, a RaaS provider charges a monthly SaaS fee to cover fixed operating costs and a revenue share to cover variable costs—and benefits from rapidly growing applications. The latter is crucial: if you can’t benefit from customer growth, the economics of running a sequencing product won’t be attractive. If you have capital, this revenue-sharing model is easier to justify, especially when covering DA costs on behalf of clients.
-
However, whether RaaS providers can sustainably charge revenue shares in the long term depends on pricing power relative to applications. Right now, it’s too early to tell who holds pricing power. (If pressed, our sense—similar to the payments industry—is that large applications will have pricing power over RaaS providers, while smaller ones won’t.)
Infrastructure, Tools, and Other
-
RaaS providers can charge SaaS fees for various critical infrastructure services. By owning the customer relationship, they’re better positioned than existing providers to capture high-value services and offer bundled discounts (e.g., “Use our RPC instead of Alchemy, and get a discount on other services”). Additionally, RaaS providers may have cost advantages due to architectures that make scaling to new chains easier.
-
Due to resource constraints, RaaS providers often partner with external companies to meet all customer needs. For example, Conduit recently launched an integration program, and Caldera has announced numerous similar partnerships. As distribution channels for these partners, RaaS providers are well-positioned to build a marketplace or reseller model, much like AWS and its third-party “plugins.”
Additional Thoughts
There are several points I wanted to discuss that didn’t fit neatly into earlier sections, so I’ve grouped them here.
RaaS vs. Frameworks
While RaaS providers and frameworks currently coexist relatively harmoniously, I believe they will inevitably compete—especially for control over sequencing. If competition intensifies, I think RaaS providers are more likely to come out ahead. Here’s why:
-
As we’re already seeing, most startups go directly to RaaS providers to outsource the complexity of deploying a rollup. If this trend continues, RaaS providers will own the top-of-funnel sales channel and thus the customer relationship. In that scenario, RaaS providers may treat the underlying framework merely as a technical enabler for various use cases.
However, frameworks could also push back against RaaS providers. Key questions here include:
-
Can frameworks charge applications for using their stack? (While network effects from adoption are strong, I doubt frameworks alone can profitably monetize. Still, it’s an interesting question.)
-
Each framework supported by a RaaS provider requires significant resources (mainly dev time). Given that, a RaaS provider likely can’t support every framework and customize products for all. Could frameworks compete by offering key services that solve unique pain points in their stack? For example, a ZK rollup framework could offer better pricing for proofs by aggregating demand from rollups and routing it to a set of provers and operators.
Cross-Rollup MEV
-
The current consensus is that rollups will generate substantial MEV, and cross-rollup MEV will become a honey pot. Based on this assumption, most believe shared sequencers are best positioned to capture this value. I think this assumption remains very open-ended, and I’d even question its conclusion.
-
If cross-chain MEV does become significant, RaaS providers will have to decide whether to integrate with shared sequencers or launch their own. Suppose, in the future, RaaS providers run sequencers for most new rollups—and this service constitutes the majority of their revenue (and grants them visibility into the mempool of every rollup they serve). In that case, I believe RaaS providers are more likely to launch their own shared sequencing product rather than partner with external providers.
-
Moreover, RaaS providers could leverage their view across all these mempools to run order flow auctions and, using their control over sequencing, offer block-top auctions for settlement. This would allow searchers to spot valuable transactions, fill them, and settle simultaneously across supported chains.
Conclusion
There are many other fascinating questions about RaaS providers, but for brevity, we’ll stop here. One thing is clear to us: RaaS providers represent a highly exciting category of businesses in crypto. This is a space we’re watching closely.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
@hi_Reverie
