Blockchain is considered reliable, transparent and immutable. However, it can also be expensive, slow, and limited in terms of performance. Experts are working to overcome these shortcomings and increase the scalability of distributed networks.
One of such technologies is — rolaps. The editors of Incrypted figured out what they are and how they work.
What are rollups?
Rolaps is a technology for scaling and improving the performance of the blockchain, which is used in second level (L2) networks. Briefly, the principle of its operation can be described as follows: transactions are processed outside the blockchain, after which they are grouped and transferred to the main network in “packages” for fixation.
The main types of rolls
There are two main types of technology:
- ZK-Rollups (Zero-Knowledge Rollups) — works on the basis of the zero-knowledge proof protocol (Zero-Knowledge Proof; ZKP), according to which the transaction is verified with confidentiality within the main network;
- Optimistic Rollups – relies on fraud proof work. In this case, it is assumed that all transactions are valid by default, and the protocol is activated only in case of discrepancies.
The ultimate goal is to take the load off the main network, speed up transaction processing, and lower fees. Below we will consider in more detail the principles of operation of each type of technology.
How does ZK-Rollups work?
ZK-Rollups is a second level scaling solution. The technology is built on a zero-disclosure proof, thanks to which information is verified without revealing sensitive data.
To conduct a transaction, the technology collects and processes information outside the main network. The smart contract combines this data into one “rollup”, and based on this data package, a cryptographic proof is created using the ZKP method. That is, the validity of operations is confirmed without disclosing any information to the verifier.
Further, only the proof itself and the minimally necessary part of the data for updating the main blockchain are recorded in the main network. Thanks to this, the speed of transaction processing increases significantly.
It is worth noting that there are several options for implementing the ZK-Rollups technology. For example, ZK-STARK is an in-house development of StarkWare.
Vitalik Buterin, the co-founder of Ethereum , believes that in ten years, all wallets will use ZKP.
The following are considered pioneers in the creation of roll-up technology based on ZKP:
- The Matter Labs team is behind the development of zkSync , an Ethereum scaling solution. The project was launched in the main network in 2020;
- StarkWare has launched the 2021 Starknet . The goal of the project is to scale the blockchain ecosystem and DeFi applications ;
- representatives of Polygon presented their version of the 2023 EVM-compatible network with ZK-Rollups technology.
However, the listed teams are far from the only players in the ZK-Rollups segment. For example, on May 27, the main network launched the Taiko project, which Vitalik Buterin spoke positively about .
It is worth noting that rollap technology is used not only for scaling Ethereum. In early 2024, Chainway Labs closed a seed round of funding to create the first solution based on ZK-Rollups for the Bitcoin network.
How do Optimistic Rollups work?
Optimistic Rollups is a blockchain bandwidth-enhancing technology that defaults to all transactions being valid unless proven otherwise.
This approach ensures a high speed of transaction processing, since there is no need to spend time on confirmation. At the same time, the system leaves time for contesting the transaction.
If the transaction is found to be invalid, then the smart contract cancels it and re-updates the data packet. Sanctions are applied to the validator.
Using Optimistic Rollups involves some delay in withdrawing funds to the main blockchain (about seven days). Therefore, teams can use the services of liquidity providers. With their help, you can withdraw assets faster, but you will have to pay for the services.
At the beginning of the development of the rollup segment, Optimistic Rollups were in great demand due to their simplicity and affordability.
Arbitrum is one of the popular projects based on Optimistic Rollups. In early 2023, this L2 solution managed to surpass Ethereum in terms of daily transactions.
In 2023, representatives of the Fantom Foundation stated that they are considering the possibility of transitioning the network to Optimistic Rollups technology to gain access to the Ethereum ecosystem.
Advantages and disadvantages of rolls
Rolap technology appeared as an answer to the problem of blockchain scalability. Among its advantages:
- high throughput;
- low commissions;
- reducing the load on the main network;
- compatibility with EVM.
In addition, it is worth noting the high level of confidentiality during transactions due to off-chain data storage (in the case of ZK-Rollups). It is likely that the zero-disclosure proof will help protect personal information in the future.
However, there are a number of disadvantages that you should be aware of. Despite the fact that the technology relies on the consensus system of the main network, it still takes part of the transactions outside its boundaries, which is associated with some risks. For example, the probability of encountering errors in smart contracts or other vulnerabilities increases.
In addition, rollups remain a difficult technology to implement, and also have limited compatibility with other decentralized systems.
Conclusions
The increase in the number of users of cryptocurrencies leads to an increased load on blockchains, requiring the expansion of network capabilities. Developers are testing many options to solve the problem of scalability. Rolaps are just one of them.
Despite the novelty, the technology managed to prove its effectiveness. Projects like Arbitrum, which are built on the basis of roll-ups, are considered very successful. This is evidenced by at least the daily number of users and the volume of blocked funds in smart contracts (TVL ).
