A rollup is a Layer 2 scaling solution that executes transactions off-chain and then submits compressed transaction data or validity proofs back to the Layer 1 blockchain (typically Ethereum). This approach dramatically increases throughput and reduces fees while inheriting the security guarantees of the underlying main chain.
There are two primary types of rollups:
- Optimistic rollups — assume transactions are valid by default and only run computation if someone submits a fraud proof challenging a transaction. Examples include Arbitrum and Optimism. They offer a simpler design but have a challenge period (usually 7 days) before withdrawals to Layer 1 are finalized.
- ZK-rollups — use zero-knowledge proofs to cryptographically verify every batch of transactions. This provides faster finality and stronger security guarantees. Examples include zkSync, StarkNet, and Polygon zkEVM.
Rollups work by bundling hundreds or thousands of transactions into a single batch, compressing the data, and posting it to the main chain. This means users enjoy fast, cheap transactions while the base layer stores enough data to reconstruct the full state if needed.
Key advantages of rollups:
- Scalability — significantly higher transaction throughput compared to Layer 1.
- Lower fees — cost is shared across all transactions in a batch.
- Security — rollups inherit the security of the base chain, unlike independent sidechains.
Rollups are widely considered the most promising approach to scaling Ethereum and are central to Ethereum's long-term roadmap. Major exchanges like Coinbase (with its Base chain) have built their own rollup networks.