Rollups are a type of Layer 2 scaling solution for blockchains, primarily used to enhance the scalability of networks like Ethereum. They bundle or “roll up” a large number of transactions into a single aggregated transaction that is posted on the Ethereum mainnet. This allows Ethereum to process a higher volume of transactions without congesting its mainnet or incurring high gas fees.
There are two major types of rollups:
- Optimistic Rollups
- ZK-Rollups
Both solutions aim to increase Ethereum’s throughput by offloading most computations and data storage off-chain while leveraging the security of the main Ethereum chain.
1. What are Optimistic Rollups?
Optimistic Rollups (ORs) are a Layer 2 scaling solution that assumes transactions processed off-chain are valid by default. They optimistically trust that the computations done off-chain are correct. If there is an issue or dispute about the validity of a transaction, a fraud proof mechanism can be invoked to resolve the issue.
Key Features of Optimistic Rollups:
- Optimistic Assumption: Transactions are assumed to be correct unless proven otherwise.
- Fraud Proofs: If a participant suspects that a transaction is invalid, they can challenge it by submitting a fraud proof to the Ethereum mainnet.
- Cost-Effective: Optimistic Rollups offer relatively low costs for users as they only interact with the Ethereum mainnet periodically for dispute resolution and settlement.
- Lower Transaction Fees: Because the transactions are processed off-chain, users benefit from significantly reduced fees.
How Optimistic Rollups Work:
- Transactions Processed Off-Chain: Transactions happen on the rollup chain, and the state changes are made without directly interacting with Ethereum.
- State Commitments: The aggregated state changes or “rollups” are submitted to Ethereum as a batch.
- Dispute Period: After the rollup’s state is committed to Ethereum, there is a challenge window during which anyone can dispute the validity of a transaction. If no disputes arise, the transaction is finalized.
- Finalization: After the dispute period, the transaction is considered final, and the data is fully committed to Ethereum.
Advantages of Optimistic Rollups:
- Security: Optimistic Rollups inherit Ethereum’s security model because they submit data and state transitions to the Ethereum blockchain.
- Simple Design: Optimistic Rollups are easier to implement compared to other rollup solutions because they don’t require complex cryptographic proofs.
- Compatibility: Optimistic Rollups are compatible with existing Ethereum smart contracts, meaning developers can deploy their existing Ethereum-based dApps on rollups with minimal changes.
Disadvantages of Optimistic Rollups:
- Delayed Finality: Transactions are only finalized after the dispute period ends, leading to a delay in finalizing transactions (usually around a week).
- Challenge Window: The fraud proof mechanism introduces a delay as it relies on users identifying fraudulent transactions within the dispute period.
- Fraud Risk: Malicious actors might attempt to exploit the system by submitting invalid transactions, which could delay processing and cause congestion.
2. What are ZK-Rollups?
ZK-Rollups (Zero-Knowledge Rollups) are another type of Layer 2 solution for Ethereum that use zero-knowledge proofs to validate transactions. Unlike Optimistic Rollups, ZK-Rollups do not assume transactions are valid by default. Instead, they use cryptographic proofs, specifically ZK-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge) or ZK-STARKs, to validate the correctness of transactions.
Key Features of ZK-Rollups:
- Zero-Knowledge Proofs: ZK-Rollups rely on ZK-SNARKs or ZK-STARKs to generate proofs of transaction validity that are then submitted to Ethereum.
- Instant Finality: ZK-Rollups offer near-instant finality of transactions since the proof of validity is provided as part of the transaction batch.
- Efficient Data Compression: The use of ZK-SNARKs allows ZK-Rollups to efficiently compress data and submit minimal information to the Ethereum chain, reducing the need for large amounts of on-chain storage.
- Scalability: ZK-Rollups can theoretically handle more transactions and provide better scalability than Optimistic Rollups due to their efficient use of proofs.
How ZK-Rollups Work:
- Transactions Processed Off-Chain: Similar to Optimistic Rollups, ZK-Rollups process transactions off-chain.
- Proof Generation: Once a batch of transactions is processed, a cryptographic proof (ZK-SNARK or ZK-STARK) is generated to prove the correctness of the transactions.
- Proof Submission: The proof is submitted to the Ethereum mainnet, along with the minimal transaction data required to verify the proof.
- Finality: Upon verification of the proof by Ethereum’s validators, the transactions are considered final.
Advantages of ZK-Rollups:
- Instant Finality: Transactions are finalized immediately after the proof is verified, meaning no delay or waiting period like in Optimistic Rollups.
- Efficient: ZK-Rollups are highly efficient in terms of data compression, reducing the load on Ethereum’s mainnet.
- Security: Since ZK-Rollups use cryptographic proofs, they provide strong security guarantees that are harder to manipulate or dispute compared to Optimistic Rollups.
- Better Scalability: ZK-Rollups can handle a higher throughput of transactions, which can lead to better scalability in the long term.
Disadvantages of ZK-Rollups:
- Complexity: Implementing ZK-Rollups requires complex cryptographic techniques like ZK-SNARKs, making it harder to develop and maintain.
- Compatibility Issues: ZK-Rollups may face compatibility issues with existing Ethereum smart contracts, and porting Ethereum dApps to ZK-Rollups may require significant modifications.
- Proof Generation Costs: While ZK-Rollups reduce on-chain data, the cost of generating and verifying proofs can be high, especially if the network experiences congestion.
3. Optimistic Rollups vs ZK-Rollups: A Comparison
| Feature | Optimistic Rollups | ZK-Rollups |
|---|---|---|
| Transaction Finality | Delayed (subject to challenge period) | Instant (once the proof is verified) |
| Proof Mechanism | Fraud proofs (transactions assumed valid) | Zero-Knowledge proofs (ZK-SNARKs, ZK-STARKs) |
| Data Compression | Less efficient data compression | Highly efficient data compression |
| Scalability | High scalability, but subject to challenge delays | Higher scalability with lower data costs |
| Security | Inherits Ethereum security but with risks of fraud | Strong cryptographic security with proofs |
| Compatibility | High (works well with existing Ethereum dApps) | Requires modifications to dApps (more complex) |
| Development Complexity | Easier to implement | More complex due to cryptographic proofs |
| Transaction Costs | Relatively low | Low (depending on the cost of proof generation) |
| Adoption | Widely adopted by projects (e.g., Optimism, Arbitrum) | Growing adoption, but limited compared to Optimistic Rollups |