Overview of Rollups

Blockchain Technology Overview

Blockchain technology forms the backbone of various decentralized networks, allowing multiple parties to engage in secure, transparent transactions without central oversight. This technology underpins not only cryptocurrencies but also a wide range of applications across different industries due to its inherent characteristics like immutability and distributed consensus mechanisms.

What Are Rollups and Why Are They Needed?

Rollups are a layer 2 scaling solution for blockchains like Ethereum. They process transactions off-chain and then bundle (or "roll up") multiple transactions into a single batch, which is then posted on the main blockchain. This reduces the load on the main chain, significantly lowering transaction fees and increasing throughput.

Why Are Rollups Needed?

1. Scalability: By processing transactions off-chain, rollups can handle many more transactions per second than the main chain.

2. Lower Costs: Fewer transactions on the main chain means lower gas fees.

3. Maintained Security: Despite being processed off-chain, transactions still benefit from the security of the main chain.

Types of Rollups

Rollups are primarily categorized into two types: Optimistic and Zero-Knowledge (ZK) Rollups. Optimistic Rollups assume transactions are valid by default and allow a challenge period for verification, while ZK Rollups use cryptographic proofs for immediate transaction validation without awaiting challenges. Both types aim to enhance scalability by processing transactions off-chain before finalizing on the main chain.