A Rollup is a Layer-2 scaling solution that processes transactions off of the main blockchain to improve speed and reduce fees. It does this by aggregating, or "rolling up," hundreds of transactions into a single batch and then submitting that batch as a single transaction on the main chain.

The Solution to Blockchain Congestion

Blockchains like Ethereum face a major challenge: high transaction fees and slow transaction speeds. This is a result of network congestion, as many users compete for a limited amount of space in each block. Rollups were created to solve this problem by moving the majority of the computational work off-chain.

A rollup takes thousands of transactions, processes them off of the main network, and then posts a compressed summary of all those transactions back to the main blockchain as a single transaction. This significantly reduces the load on the main chain and, in turn, lowers transaction fees. The rollup inherits the security of the main blockchain, ensuring that all transactions are valid and secure.

The Two Types of Rollups

There are two main types of rollups:

Optimistic Rollups: These rollups operate on the assumption that all transactions are valid. They allow anyone to submit a fraud-proof to challenge a fraudulent transaction, which is then verified on the main chain.

ZK-Rollups (Zero-Knowledge Rollups): These rollups use advanced cryptography to prove that a batch of transactions is valid before it is even posted to the main chain. This provides a higher degree of security and allows for faster transaction finality than an optimistic rollup.

The Big Picture

Rollups are a crucial tool for scaling blockchains and making them more usable for a mass audience. They enable faster, cheaper transactions without sacrificing decentralization or security. This has unlocked a new wave of innovation in DeFi, NFTs, and other DApps.