What is a rollup in crypto?
Among the new functions of the Ethereum network to solve its problems of scale, speed, and transaction costs is the “rollup” function, which is an off-chain method of carrying out transactions.
A rollup is a method of performing transactions outside the main Ethereum blockchain and sending only the outcome of those transactions back to the main Ethereum network. This allows for a higher volume of transactions to be settled on the Ethereum blockchain without increasing block sizes or transaction fees.
Ethereum scaling solutions
One of the biggest knocks against Ethereum is the rate of transaction growth. There are a few methods for fixing this, including:
• Sidechains: Sidechains are EVM compatible blockchains connected to Ethereum via bridges. They have their own consensus protocol and block parameters.
• Rollups: Rollups perform transaction execution outside the main Ethereum blockchain and send the transaction data back to the main Ethereum network.
• State channels: State channels use multisig channels to settle transactions off the main chain between parties and send the state to the main blockchain.
• Plasma: Plasma uses smart contracts to facilitate off-chain transactions within privatized blockchains (called child blockchains), which can later be settled on the main Ethereum network.
Which one is better? That’s a matter of opinion, but most people seem to think roll-ups are more scalable than the others.
Rollups have been available for private use since October 2020, but they will not be available for public use until after Phase 0 of Ethereum 2.0 is complete.
Photo by Karolina Grabowska.
Rollups FAQ
Zero-knowledge rollups (ZK-rollups) aggregate hundreds of off-chain transactions and provide cryptographic proof. These proofs may take the form of SNARKs (short non-interactive knowledge arguments) or STARKs (scalable transparent argument of knowledge).
On layer 2, optimistic rollups run concurrently with the main Ethereum chain. They might provide scalability benefits due to the fact that they do not do any computation by default. Rather than that, they suggest the new state to Mainnet or “notarise” the transaction after the transaction.