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What are Rollups

Rollups are a Layer 2 scaling solution that increases blockchain transaction speed and throughput while deriving its security from Layer 1 Mainnet. Rollups scale your applications by handling transactional computations off-chain and then publishing bundled transactions to Layer 1 Mainnet for settlement.

Rollups breakdown​

Off-chain transaction execution — Bundling transactions — Publishing transactions to L1

Off-chain transaction execution​

Transaction processing and computation takes place on a separate Layer 2 blockchain, which provides for enhanced scalability and better performance, and guarantees increased transaction speed compared to that of the parent Layer 1 Mainnet blockchain.

Bundling transactions​

On Layer 2, multiple transactions data is compressed and bundled (or "rolled up") into batches to publish a single state-change transaction to the Layer 1 Mainnet chain for settlement. Transactions bundling guarantees the increased transaction throughput compared to processing those same transactions on-chain.

Publishing transactions to L1​

Bundled transactions data gets published to the Layer 1 Mainnet chain. By doing so, rollups inherit the security of the parent L1, because once the on-chain's state change is finalized, reverting a rollup transaction requires reverting the parent Layer 1 Mainnet chain itself.

Rollup types​

There are two types of rollups based on different security models.

Optimistic rollups:

  • Transactions are assumed to be valid, but can be challenged within a particular time window. In case of a challenge, the fraud proof computation reruns on-chain, which handles whether the challenged transaction is valid or fraudulent.

  • If the challenger's claim about the rollup's state is correct, the operator is penalized by having their bond slashed, the challenger is awarded, and the blockchain state settles to the correct one. If the challengers' claim is incorrect, then it is their bond to get slashed.

Zero-knowledge rollups:

  • Transaction computations are executed in batches off-chain. State storage is also kept off-chain. When the computations have been performed on L2, the transactions compressed data gets posted to the L1 Mainnet chain along with a cryptographic proof (validity proof) validating the correctness of the state change. Hence, the transactions get finalized.
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