diff --git a/Cargo.lock b/Cargo.lock
index 56ee426f4..8cca54c46 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -327,6 +327,7 @@ dependencies = [
  "anyhow",
  "async-trait",
  "hashbrown",
+ "miniz_oxide",
  "serde",
  "tokio",
  "unsigned-varint",
diff --git a/crates/derive/Cargo.toml b/crates/derive/Cargo.toml
index 38e640b31..fbdb6947a 100644
--- a/crates/derive/Cargo.toml
+++ b/crates/derive/Cargo.toml
@@ -19,6 +19,7 @@ alloy-sol-types = { version = "0.6.3", default-features = false }
 async-trait = "0.1.77"
 hashbrown = "0.14.3"
 unsigned-varint = "0.8.0"
+miniz_oxide = { version = "0.7.2" }
 
 # Optional
 serde = { version = "1.0.197", default-features = false, features = ["derive"], optional = true }
diff --git a/crates/derive/src/stages/channel_bank.rs b/crates/derive/src/stages/channel_bank.rs
index 39d8520a8..4da1ee609 100644
--- a/crates/derive/src/stages/channel_bank.rs
+++ b/crates/derive/src/stages/channel_bank.rs
@@ -88,8 +88,8 @@ where
     pub fn ingest_frame(&mut self, frame: Frame) -> StageResult<()> {
         let origin = *self.origin().ok_or(anyhow!("No origin"))?;
 
+        // Get the channel for the frame, or create a new one if it doesn't exist.
         let current_channel = self.channels.entry(frame.id).or_insert_with(|| {
-            // Create a new channel
             let channel = Channel::new(frame.id, origin);
             self.channel_queue.push_back(frame.id);
             channel
diff --git a/crates/derive/src/stages/channel_reader.rs b/crates/derive/src/stages/channel_reader.rs
index 8b1378917..05c2edc78 100644
--- a/crates/derive/src/stages/channel_reader.rs
+++ b/crates/derive/src/stages/channel_reader.rs
@@ -1 +1,111 @@
+//! This module contains the `ChannelReader` struct.
 
+use super::channel_bank::ChannelBank;
+use crate::{
+    traits::{ChainProvider, DataAvailabilityProvider},
+    types::{Batch, BlockInfo, StageError, StageResult},
+};
+use alloc::vec::Vec;
+use anyhow::anyhow;
+use core::fmt::Debug;
+use miniz_oxide::inflate::decompress_to_vec;
+
+/// [ChannelReader] is a stateful stage that does the following:
+#[derive(Debug)]
+pub struct ChannelReader<DAP, CP>
+where
+    DAP: DataAvailabilityProvider + Debug,
+    CP: ChainProvider + Debug,
+{
+    /// The previous stage of the derivation pipeline.
+    prev: ChannelBank<DAP, CP>,
+    /// The batch reader.
+    next_batch: Option<BatchReader>,
+}
+
+impl<DAP, CP> ChannelReader<DAP, CP>
+where
+    DAP: DataAvailabilityProvider + Debug,
+    CP: ChainProvider + Debug,
+{
+    /// Create a new [ChannelReader] stage.
+    pub fn new(prev: ChannelBank<DAP, CP>) -> Self {
+        Self {
+            prev,
+            next_batch: None,
+        }
+    }
+
+    /// Pulls out the next Batch from the available channel.
+    pub async fn next_batch(&mut self) -> StageResult<Batch> {
+        if let Err(e) = self.set_batch_reader().await {
+            self.next_channel();
+            return Err(e);
+        }
+        match self
+            .next_batch
+            .as_mut()
+            .unwrap()
+            .next_batch()
+            .ok_or(StageError::NotEnoughData)
+        {
+            Ok(batch) => Ok(batch),
+            Err(e) => {
+                self.next_channel();
+                Err(e)
+            }
+        }
+    }
+
+    /// Creates the batch reader from available channel data.
+    async fn set_batch_reader(&mut self) -> StageResult<()> {
+        if self.next_batch.is_none() {
+            let channel = self.prev.next_data().await?.ok_or(anyhow!("no channel"))?;
+            self.next_batch = Some(BatchReader::from(&channel[..]));
+        }
+        Ok(())
+    }
+
+    /// Returns the L1 origin [BlockInfo].
+    pub fn origin(&self) -> Option<&BlockInfo> {
+        self.prev.origin()
+    }
+
+    /// Forces the read to continue with the next channel, resetting any
+    /// decoding / decompression state to a fresh start.
+    pub fn next_channel(&mut self) {
+        self.next_batch = None;
+    }
+}
+
+/// Batch Reader provides a function that iteratively consumes batches from the reader.
+/// The L1Inclusion block is also provided at creation time.
+/// Warning: the batch reader can read every batch-type.
+/// The caller of the batch-reader should filter the results.
+#[derive(Debug)]
+pub(crate) struct BatchReader {
+    /// The raw data to decode.
+    data: Option<Vec<u8>>,
+    /// Decompressed data.
+    decompressed: Vec<u8>,
+}
+
+impl BatchReader {
+    /// Pulls out the next batch from the reader.
+    pub(crate) fn next_batch(&mut self) -> Option<Batch> {
+        if let Some(data) = self.data.take() {
+            self.decompressed = decompress_to_vec(&data).ok()?;
+        }
+        let batch = Batch::decode(&mut self.decompressed.as_ref()).ok()?;
+        Some(batch)
+    }
+}
+
+impl From<&[u8]> for BatchReader {
+    fn from(data: &[u8]) -> Self {
+        Self {
+            data: Some(data.to_vec()),
+            decompressed: Vec::new(),
+        }
+    }
+}
diff --git a/crates/derive/src/stages/mod.rs b/crates/derive/src/stages/mod.rs
index b1e079bbf..761995d9b 100644
--- a/crates/derive/src/stages/mod.rs
+++ b/crates/derive/src/stages/mod.rs
@@ -24,7 +24,9 @@ pub use frame_queue::FrameQueue;
 mod channel_bank;
 pub use channel_bank::ChannelBank;
 
-mod batch_queue;
 mod channel_reader;
+pub use channel_reader::ChannelReader;
+
+mod batch_queue;
 mod engine_queue;
 mod payload_derivation;
diff --git a/crates/derive/src/types/batch.rs b/crates/derive/src/types/batch.rs
new file mode 100644
index 000000000..5b52bd8e3
--- /dev/null
+++ b/crates/derive/src/types/batch.rs
@@ -0,0 +1,40 @@
+//! This module contains the enumerable [Batch].
+
+use super::batch_type::BatchType;
+use super::single_batch::SingleBatch;
+use crate::types::errors::DecodeError;
+
+use alloy_rlp::Decodable;
+
+// TODO: replace this with a span batch
+/// Span Batch.
+#[derive(Debug, Clone, PartialEq, Eq)]
+pub struct SpanBatch {}
+
+/// A Batch.
+#[derive(Debug, Clone, PartialEq, Eq)]
+pub enum Batch {
+    /// A single batch
+    Single(SingleBatch),
+    /// Span Batches
+    Span(SpanBatch),
+}
+
+impl Batch {
+    /// Attempts to decode a batch from a byte slice.
+    pub fn decode(r: &mut &[u8]) -> Result<Self, DecodeError> {
+        if r.is_empty() {
+            return Err(DecodeError::EmptyBuffer);
+        }
+        match BatchType::from(r[0]) {
+            BatchType::Single => {
+                let single_batch = SingleBatch::decode(r)?;
+                Ok(Batch::Single(single_batch))
+            }
+            BatchType::Span => {
+                // TODO: implement span batch decoding
+                unimplemented!()
+            }
+        }
+    }
+}
diff --git a/crates/derive/src/types/batch_type.rs b/crates/derive/src/types/batch_type.rs
new file mode 100644
index 000000000..068452816
--- /dev/null
+++ b/crates/derive/src/types/batch_type.rs
@@ -0,0 +1,67 @@
+//! Contains the [BatchType] and its encodings.
+
+use alloy_rlp::{Decodable, Encodable};
+
+/// The single batch type identifier.
+pub(crate) const SINGLE_BATCH_TYPE: u8 = 0x01;
+
+/// The span batch type identifier.
+pub(crate) const SPAN_BATCH_TYPE: u8 = 0x02;
+
+/// The Batch Type.
+#[derive(Debug, Clone, PartialEq, Eq)]
+#[repr(u8)]
+pub enum BatchType {
+    /// Single Batch.
+    Single = SINGLE_BATCH_TYPE,
+    /// Span Batch.
+    Span = SPAN_BATCH_TYPE,
+}
+
+impl From<u8> for BatchType {
+    fn from(val: u8) -> Self {
+        match val {
+            SINGLE_BATCH_TYPE => BatchType::Single,
+            SPAN_BATCH_TYPE => BatchType::Span,
+            _ => panic!("Invalid batch type"),
+        }
+    }
+}
+
+impl From<&[u8]> for BatchType {
+    fn from(buf: &[u8]) -> Self {
+        BatchType::from(buf[0])
+    }
+}
+
+impl Encodable for BatchType {
+    fn encode(&self, out: &mut dyn alloy_rlp::BufMut) {
+        let val = match self {
+            BatchType::Single => SINGLE_BATCH_TYPE,
+            BatchType::Span => SPAN_BATCH_TYPE,
+        };
+        val.encode(out);
+    }
+}
+
+impl Decodable for BatchType {
+    fn decode(buf: &mut &[u8]) -> alloy_rlp::Result<Self> {
+        let val = u8::decode(buf)?;
+        Ok(BatchType::from(val))
+    }
+}
+
+#[cfg(test)]
+mod test {
+    use super::*;
+    use alloc::vec::Vec;
+
+    #[test]
+    fn test_batch_type() {
+        let batch_type = BatchType::Single;
+        let mut buf = Vec::new();
+        batch_type.encode(&mut buf);
+        let decoded = BatchType::decode(&mut buf.as_slice()).unwrap();
+        assert_eq!(batch_type, decoded);
+    }
+}
diff --git a/crates/derive/src/types/errors.rs b/crates/derive/src/types/errors.rs
index 98d3220b8..b5659922c 100644
--- a/crates/derive/src/types/errors.rs
+++ b/crates/derive/src/types/errors.rs
@@ -43,3 +43,37 @@ impl Display for StageError {
         }
     }
 }
+
+/// A decoding error.
+#[derive(Debug)]
+pub enum DecodeError {
+    /// The buffer is empty.
+    EmptyBuffer,
+    /// Alloy RLP Encoding Error.
+    AlloyRlpError(alloy_rlp::Error),
+}
+
+impl From<alloy_rlp::Error> for DecodeError {
+    fn from(e: alloy_rlp::Error) -> Self {
+        DecodeError::AlloyRlpError(e)
+    }
+}
+
+impl PartialEq<DecodeError> for DecodeError {
+    fn eq(&self, other: &DecodeError) -> bool {
+        matches!(
+            (self, other),
+            (DecodeError::EmptyBuffer, DecodeError::EmptyBuffer)
+                | (DecodeError::AlloyRlpError(_), DecodeError::AlloyRlpError(_))
+        )
+    }
+}
+
+impl Display for DecodeError {
+    fn fmt(&self, f: &mut core::fmt::Formatter<'_>) -> core::fmt::Result {
+        match self {
+            DecodeError::EmptyBuffer => write!(f, "Empty buffer"),
+            DecodeError::AlloyRlpError(e) => write!(f, "Alloy RLP Decoding Error: {}", e),
+        }
+    }
+}
diff --git a/crates/derive/src/types/mod.rs b/crates/derive/src/types/mod.rs
index 91b7725cb..2025ab547 100644
--- a/crates/derive/src/types/mod.rs
+++ b/crates/derive/src/types/mod.rs
@@ -3,6 +3,12 @@
 use alloc::vec::Vec;
 use alloy_rlp::{Decodable, Encodable};
 
+mod batch;
+pub use batch::Batch;
+
+mod batch_type;
+pub use batch_type::BatchType;
+
 mod system_config;
 pub use system_config::{
     SystemAccounts, SystemConfig, SystemConfigUpdateType, CONFIG_UPDATE_EVENT_VERSION_0,
@@ -43,7 +49,7 @@ mod channel;
 pub use channel::Channel;
 
 mod errors;
-pub use errors::{StageError, StageResult};
+pub use errors::{DecodeError, StageError, StageResult};
 
 mod single_batch;
 pub use single_batch::SingleBatch;