Rollups

Rollups are a Layer 2 scaling solution that aims to increase the transaction throughput of a blockchain (often Ethereum) without compromising on security.

In a traditional blockchain like Ethereum, every transaction must be processed by every node in the network. This provides a high level of security, but it also significantly limits the transaction throughput of the network.

Rollups address this problem by moving most of the transaction processing off-chain, and only posting a summary or “rollup” of the transactions to the main Ethereum network. This allows the Ethereum network to process a significantly larger number of transactions.

There are two main types of rollups:

1. Optimistic Rollups: These are based on the idea that most transactions are honest. When a user submits a transaction in an Optimistic Rollup, it’s assumed to be valid unless challenged. Challenges are incentivized by rewards, ensuring that dishonest transactions are likely to be caught. However, because of the challenge period, it can take a week or more to confirm a transaction.
2. ZK-Rollups: These use a cryptographic technique called zero-knowledge proofs to prove the validity of transactions. When a user submits a transaction in a ZK-Rollup, a proof is generated and verified on-chain, ensuring the transaction is valid. This allows for faster confirmations than Optimistic Rollups, but the technology is more complex.

Rollups are a key part of Ethereum’s scalability plans, but other blockchains are also exploring similar techniques.