A rollup is a Layer 2 (L2) solution built on the blockchain for scalability purposes. There are multiple types of L2 rollups, and all operate on a similar premise, where transactions are processed off the main blockchain and returned to the Layer 1 (L1) network for final settlement.
As the name suggests, rollups typically bundle or “roll up” multiple transactions into one to increase processing speed and efficiency, consequently reducing network fees for users. The two main types of L2 rollups are optimistic rollups and zero-knowledge (ZK) rollups.
In optimistic rollups, transactions are considered valid, and that status is only questioned and additionally verified if it is challenged during a dispute period. Zero-knowledge (ZK) rollups, on the other hand, use cryptography to verify the validity of transactions grouped as one before transferring them back to the L1 system. Commonly used optimistic rollups include Ethereum’s Arbitrum and Optimism, while zkSync is a popular ZK rollup.
