Rollup Introduction
Rollup is the most basic and initial modular blockchain solution that is aimed at improving the speed and cost-effectiveness of blockchains. It operates as a separate execution environment designed to scale the blockchain, resulting in lower execution costs than Ethereum (L1). Rollups execute transactions in a separate virtual machine, producing proof to Ethereum to ensure that a malicious actor has not tampered with the L2 state. By consolidating transaction data and moving it away from the main blockchain, Rollups increase transaction efficiency in terms of throughput, while the assets remain in an on-chain smart contract. Once the transaction is completed, the data related to the execution is stored on the main blockchain, depending on the proof system. Rollups can be applied to any Layer 1 solution, though most of the solutions are used in Ethereum.
There are two primary types of rollups: optimistic rollups and zero-knowledge rollups.
- Optimistic Rollups work under the assumption that the submitted transaction data is valid, and only conduct fraud checks when transactions are contested. Optimistic rollups are faster than other types of rollups, but offer relatively less security.
- Zero-Knowledge Rollups (ZK Rollups) use a cryptographic technique called zero-knowledge proofs to verify the validity of transaction data without revealing specific transaction details. This approach provides greater security compared to optimistic rollups, but is still in development and more testings are required.
To use rollups, users need to bridge their funds to the Layer 2 and perform the desired transactions on the rollup. Users can withdraw their funds to the main chain.
Template of Rollup
The template of Rollup is used to explain the projects included in the Rollup category.The Rollup template is divided into three important layers: execution, settlement, and data availability.
- Execution: In this layer, user transactions alter the state of L2. To increase scalability, L2 maintains a separate state from L1.
- Settlement: When operating a rollup, some of the security of the underlying L1 (Ethereum) is relied upon. Proof is generated to ensure that state transitions have not been tampered with by malicious actors. Depending on the proof type, there is either a verifying process on-chain or a challenge game system.
- Data Availability: It is important to store transaction data, state data, and state root data to ensure the reproducibility of the current state of a blockchain. This layer focuses on providing a feature to store data (or a proof that the data is there) and guaranteeing that the data is the most recent.
