{"id":126041,"date":"2023-11-16T20:06:56","date_gmt":"2023-11-16T20:06:56","guid":{"rendered":"https:\/\/www.techopedia.com\/?post_type=definition&#038;p=126041"},"modified":"2023-11-16T20:55:51","modified_gmt":"2023-11-16T20:55:51","slug":"rollup","status":"publish","type":"definition","link":"https:\/\/www.techopedia.com\/definition\/rollup","title":{"rendered":"Rollup"},"content":{"rendered":"<h2><span id=\"what_is_a_rollup\">What is a Rollup?<\/span><\/h2>\n<p><span style=\"font-weight: 400\">A rollup is a <a href=\"https:\/\/www.techopedia.com\/definition\/layer-two-l2\">layer two<\/a> (L2) <a href=\"https:\/\/www.techopedia.com\/definition\/30246\/blockchain\">blockchain<\/a> that processes transactions away from the main blockchain to reduce transaction costs and increase throughput on the main chain.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">Rollups are scaling solutions that minimize the computational load on the main <a href=\"https:\/\/www.techopedia.com\/definition\/layer-1-in-blockchain\">layer one<\/a> (L1) chain. Rollup technology has become so popular that the leading <a href=\"https:\/\/www.techopedia.com\/definition\/32499\/smart-contract\">smart contract<\/a> blockchain <a href=\"https:\/\/www.techopedia.com\/definition\/32571\/ethereum-cryptocurrency\">Ethereum<\/a> has pivoted its scaling roadmap from <a href=\"https:\/\/www.techopedia.com\/ethereum-roadmap-how-will-it-achieve-global-scale-to-become-a-world-computer\">sharding to a rollup-centric one<\/a>.<\/span><\/p>\n<h2><span id=\"how_do_rollups_work\">How Do Rollups Work?<\/span><\/h2>\n<p><span style=\"font-weight: 400\">Rollups alleviate congestion, increase throughput, and reduce <a href=\"https:\/\/www.techopedia.com\/definition\/gas-fee-ethereum\">gas fees<\/a> on the L1 blockchain by processing and verifying transactions off-chain. <\/span><\/p>\n<p><span style=\"font-weight: 400\">In return, rollups rely on the L1 chain for <a href=\"https:\/\/www.techopedia.com\/definition\/24747\/cybersecurity\">security<\/a>. They post transaction data and proofs to the L1 chain to ensure that the roll-up transactions are verifiable and censorship-resistant.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Rollup users pay gas fees denominated in the L1 native currency. For example, gas fees on Ethereum rollup called Base are paid in ether (ETH) \u2013 the native token of Ethereum L1.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Here is how rollups work:<\/span><b><\/b><\/p>\n<ul>\n<li><b>Off-Chain Transactions<\/b>:<span style=\"font-weight: 400\"> Rollups are blockchains. Users conduct transactions on the rollup chain. These transactions are processed on the rollup chain. A single party called \u201csequencer\u201d confirms transactions, constructs L2 blocks, and submits transaction data and proofs to the main L1 chain.<\/span><\/li>\n<li><b>Batched Transactions<\/b>:<span style=\"font-weight: 400\"> A sequencer groups multiple transactions in batches to be submitted to the main L1 chain. Multiple transactions bundled together reduce gas fees for the end-users.<\/span><\/li>\n<li><b>On-Chain Security:<\/b><span style=\"font-weight: 400\"> Once the transactions are batched, the rollup chain posts the transaction data to a rollup smart contract on the L1 chain. Once the L1 block containing the rollup transactions is finalized, there is no way to modify or censor the transaction data. The L1 chain ensures that data is always available for verification when needed.<\/span><\/li>\n<li><b>Proof Generation<\/b>:<span style=\"font-weight: 400\"> Some rollups post \u201csummaries\u201d or \u201cproofs\u201d to the L1 along with transaction data. These \u201cproofs\u201d serve as a <a href=\"https:\/\/www.techopedia.com\/definition\/1770\/cryptography\">cryptographic<\/a> assurance that the rollup has processed the given batch of transactions.<\/span><b><\/b><\/li>\n<\/ul>\n<h2><span id=\"types_of_rollups\">Types of Rollups<\/span><\/h2>\n<p><span style=\"font-weight: 400\">There are primarily two main types of rollup solutions: optimistic rollup and <a href=\"https:\/\/www.techopedia.com\/definition\/zero-knowledge-rollups-zk-rollups\">zk rollup<\/a>.<\/span><\/p>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-127174\" src=\"https:\/\/www.techopedia.com\/wp-content\/uploads\/2023\/11\/Types-of-Rollups-1.jpg\" alt=\"Types of Rollups\" width=\"1390\" height=\"966\" srcset=\"https:\/\/www.techopedia.com\/wp-content\/uploads\/2023\/11\/Types-of-Rollups-1.jpg 1390w, https:\/\/www.techopedia.com\/wp-content\/uploads\/2023\/11\/Types-of-Rollups-1-300x208.jpg 300w, https:\/\/www.techopedia.com\/wp-content\/uploads\/2023\/11\/Types-of-Rollups-1-1024x712.jpg 1024w, https:\/\/www.techopedia.com\/wp-content\/uploads\/2023\/11\/Types-of-Rollups-1-768x534.jpg 768w, https:\/\/www.techopedia.com\/wp-content\/uploads\/2023\/11\/Types-of-Rollups-1-1200x834.jpg 1200w\" sizes=\"(max-width: 1390px) 100vw, 1390px\" \/><\/p>\n<h3>Optimistic Rollup<\/h3>\n<p><span style=\"font-weight: 400\">Optimistic rollups assume that all transactions are valid by default unless proven otherwise.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">Optimistic rollups batch transactions off-chain and post transaction data to the L1 as call data. These rollups do not submit any proof of the validity of the transactions. Instead, it allows users a time window called a \u201cchallenge window,\u201d during which anyone can challenge the validity of a rollup transaction by computing fraud proof.<\/span><\/p>\n<p><span style=\"font-weight: 400\">If the fraud proof succeeds, transactions are re-executed, and the state of the rollup is updated accordingly. The sequencer responsible for including the incorrectly executed transaction receives a penalty.<\/span><\/p>\n<p><span style=\"font-weight: 400\">The biggest disadvantage of optimistic rollups is that users cannot withdraw their tokens from the rollup chain until the challenge period is over. The challenge period typically lasts seven days<\/span><\/p>\n<h3>Zero-Knowledge Rollup (ZK Rollups)<\/h3>\n<p><span style=\"font-weight: 400\">ZK rollup does not assume the validity of transactions. Instead, they verify the transactions and produce cryptographic proofs about the transaction&#8217;s validity. These proofs are submitted to the L1 chain.<\/span><\/p>\n<p><span style=\"font-weight: 400\">These rollups interact with the L1 chain via two smart contracts. The main smart contract stores data on rollup blocks and monitors state updates (same as Optimistic rollups). The second smart contract verifies the submitted ZK proofs.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Proofs are considered sufficient to assure the validity of transactions, therefore, ZK rollups may not be required to submit transaction data to the L1 chain. However, it is considered safe practice to make historic transaction data available so that anyone can independently verify the state of the L2 chain.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">Data availability solutions are being developed where another blockchain is used to store historical transaction data.<\/span><\/p>\n<p><span style=\"font-weight: 400\">An advantage that ZK rollups hold over-optimistic rollup is that users do not have to wait to withdraw their tokens from the rollup.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">As for its disadvantages, ZK rollups may encourage centralized control as producing validity proofs requires specialized hardware.<\/span><\/p>\n<h2><span id=\"rollup_examples\">Rollup Examples<\/span><\/h2>\n<p><span style=\"font-weight: 400\">Here are examples of popular rollup blockchains that are currently operational:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><b>Arbitrum<\/b><span style=\"font-weight: 400\">: Arbitrum is the leading Ethereum optimistic rollup with a <a href=\"https:\/\/www.techopedia.com\/definition\/total-value-locked-tvl\">total value locked<\/a> (TVL) of over $2 billion as of November 2023. The Arbitrum ecosystem consists of the Arbitrum rollup, security solution Arbitrum AnyTrust, and blockchain infrastructure solution Arbitrium Orbit. The project released its native token called ARB in 2023.<\/span><\/li>\n<li style=\"font-weight: 400\"><b>Optimism<\/b><span style=\"font-weight: 400\">: Optimism is an Ethereum optimistic rollup. It had a TVL of $700m as of November 2023. Optimism is known for its standardized, shared, and open-source development stack called the OP Stack, which is used by developers to launch their blockchains. The OP token is the rollup\u2019s native <a href=\"https:\/\/www.techopedia.com\/definition\/4140\/token\">token<\/a>.<\/span><\/li>\n<li><b>Base<\/b>:<span style=\"font-weight: 400\"> Base is an Ethereum optimistic rollup created using the OP Stack by one of the world\u2019s <a href=\"https:\/\/www.techopedia.com\/cryptocurrency\/best-crypto-exchanges\">biggest crypto exchanges<\/a>, <a href=\"https:\/\/www.techopedia.com\/cryptocurrency\/coinbase-review\">Coinbase<\/a>. The base does not have a native token.<\/span><\/li>\n<li style=\"font-weight: 400\"><b>StarkNet<\/b><span style=\"font-weight: 400\">: StarkNet is an Ethereum ZK-rollup that <a href=\"https:\/\/www.techopedia.com\/definition\/zero-knowledge-stark-zkstark\">uses its zero-knowledge technology called STARK<\/a> to compute and verify transactions. StarkNet\u2019s native token is called STRK.<\/span><\/li>\n<li style=\"font-weight: 400\"><b>zkSync<\/b><span style=\"font-weight: 400\">: zkSync is an Ethereum L2 protocol that uses ZK-proof cryptography. The project is spearheaded by a company called Matter Labs.<\/span><\/li>\n<\/ul>\n<h2><span id=\"the_bottom_line\">The Bottom Line<\/span><\/h2>\n<p><span style=\"font-weight: 400\">Rollup technology is slowly taking center stage as the cryptocurrency industry strives toward its holy grail of mass adoption. <\/span><\/p>\n<p><span style=\"font-weight: 400\">Ethereum\u2019s pivot to a rollup-centric scaling roadmap has diverted the brightest minds of the industry towards innovation in the rollup space. <\/span><\/p>\n<p><span style=\"font-weight: 400\">It will be exciting to see how new rollup solutions not only address high gas fees and low network throughput but community governance and <a href=\"https:\/\/www.techopedia.com\/definition\/decentralization\">decentralization<\/a> risks as well.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is a Rollup? A rollup is a layer two (L2) blockchain that processes transactions away from the main blockchain to reduce transaction costs and increase throughput on the main chain.\u00a0 Rollups are scaling solutions that minimize the computational load on the main layer one (L1) chain. Rollup technology has become so popular that the [&hellip;]<\/p>\n","protected":false},"author":286557,"featured_media":127156,"comment_status":"open","ping_status":"closed","template":"","format":"standard","meta":{"_acf_changed":false,"_lmt_disableupdate":"no","_lmt_disable":"","om_disable_all_campaigns":false,"footnotes":""},"definitioncat":[271,272],"class_list":["post-126041","definition","type-definition","status-publish","format-standard","has-post-thumbnail","hentry","definitioncat-blockchain","definitioncat-cryptocurrency"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.2 (Yoast SEO v24.5) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is a Rollup? Definition, Types, Examples and How It Works<\/title>\n<meta name=\"description\" content=\"A rollup is a L2 blockchain that processes transactions away from the main underlying blockchain. 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