What are Rollups?

Rollups are Layer 2 scaling solutions that provide customization, efficiency, and performance improvements for developers by executing transactions off-chain. They’re beneficial for builders who have struggled with network congestion, failed transactions, and high gas fees.

Off-chain Execution: The execution of transactions is performed off-chain on the rollup, which reduces data needs on the L1.

Transaction Bundling: The rollup then aggregates multiple transactions into a single batch. This is the process of “rolling up” transactions on the L2 network prior to interaction with the base L1 chain.

L1 Settlement: The L2 transaction batch is recorded as a single L1 transaction and enables the rollup to inherit security from the L1 while reducing its data load.

The two primary types of rollups are optimistic and zero knowledge (ZK), which offer different sets of tradeoffs.