Breaking down Ethereum rollups – What makes a rollup optimistic vs zero knowledge?

Ethereum, the world’s second-largest blockchain network, persistently grappling with scalability issues due to its popularity and increased network congestion, has had the concept of Layer 2 chains in mind since 2014. As more users and decentralized applications (dApps) were released, transaction costs skyrocketed, and processing times slowed significantly. To address these challenges, developers explored various scaling solutions to optimize Layer 2s, with Ethereum rollups emerging as one of the most promising approaches.

What are Ethereum Rollups?

An Ethereum rollup is a Layer 2 scaling solution that processes multiple transactions off the main Ethereum blockchain (Layer 1), bundles them into a single transaction, and then submits this bundled transaction back to the main chain. By moving the bulk of transaction processing off-chain, rollups can significantly increase the throughput of the Ethereum network while reducing gas fees for users.

Rollups are designed to maintain the security and decentralization of the Ethereum mainnet while improving its scalability. They achieve this by leveraging the main chain for data storage and dispute resolution while executing transactions on a separate layer. This approach allows rollups to benefit from Ethereum’s security while minimizing the load on the main network.

There are two main types of Ethereum rollups: Optimistic Rollups and Zero-Knowledge Rollups (ZK-Rollups).

Optimistic Rollups

Optimistic rollups operate on the assumption that all transactions are valid until proven otherwise. They process transactions off-chain and submit the transaction data to the main Ethereum chain along with cryptographic proof. Anyone who suspects a fraudulent transaction can challenge it during a dispute period. If a transaction is proven invalid, the rollup executes a “fraud-proof” and reverts the invalid transaction.

Advantages of Optimistic Rollups:

• Lower computational costs compared to ZK-Rollups
• More straightforward to implement…