What are Rollups in crypto? How rollups act as a facilitator to achieve greatness?
Blockchain networks are at the forefront of the tech world, but they’re not without their flaws. While blockchains have many advantages over traditional databases, like decentralization and immutability, scalability remains a big issue for many platforms.
That’s why several solutions have emerged to tackle this problem.
One of them is Layer-2 scaling, made possible through cryptographic rollups.
What we are going to learn?
Rollups are a Layer-2 scaling solution
One of the most important things to remember about rollups is that they are a Layer-2 scaling solution. It means they do not require any changes to be made to the blockchain. Instead, builders can deploy them on top of existing blockchains.
Layer-2 solutions can help scale blockchains more efficiently and economically instead of making changes directly to the blockchain. The latter option may require costly code forks, and requires crucial protocol-level changes. A fork can also divide the community if members do not agree with these proposed changes, like when Ethereum and Ethereum Classic split.
Implementing Rollups In Different Ways
Rollups can vary in their implementation and approach. However, there are two main rollup types: optimistic rollups and zero-knowledge rollups.
Most Layer-2 networks rely on optimistic rollups to improve network throughput at affordable fees. Therefore, it is a viable approach to bundle multiple off-chain transactions in a large batch and submit it to the Ethereum network as one transaction. However, the technology assumes all transactions are valid and does not publish proofs of validity for batched transfers.
Under the hood, they decrease computation requirements on the Ethereum chain by taking transactions off-chain. That leads to faster processing without sacrificing security, which is still derived from the main network. In addition, all Optimistic rollup transaction results are published on-chain to prevent double-spending.
Zero Knowledge Rollups (zk-rollups)
A second method involves using zero-knowledge proofs (ZKPs). ZKPs allow users to prove something without revealing any additional information about themselves or how it was confirmed — only that something is true based on what we already know about the overarching situation. Moreover, this rollup approach introduces an extra layer of privacy for all parties.
Additionally, zk-rollups publish cryptographic proofs of validity for all off-chain transactions. That validity proof ensures moving funds from the Rollup to Ethereum is nearly instant. Moreover, it relies on on-chain contracts and off-chain virtual machine technology, like its optimistic counterparts.
Today’s Rollups Landscape
The technology continues to build momentum thanks to the crucial benefits provided by rollups. Several Layer-2 networks have been established, including LoopRing, ZKSync, Optimism, Arbitrum, Boba Network, dYdX, Aztec, etc. Moreover, there is a further exploration into rollup implementation, including:
- Validiums: provides of-chain data layers as alternatives for rollups to send transaction data. Examples include ImmutableX, Sorare, and Deversefi.
- Enshrined Rollups: Built into applications of the blockchain itself, mainly found on Tezos and Cosmos
- Plasma Rollups: Primarily designed for payment transactions with various sidechain-esque elements.
However, builders are already tackling the next generation in Layer-3 and Layer-4 projects. That approach will require a different rollup-based infrastructure capable of going beyond traditional Layer-2 scaling. That infrastructure, such as in GTON Network, can pave the way for broader Web3 scaling and adoption. It is built as an Optimistic rollup protocol and is EVM-compatible for smart contract execution.
While GTON Network is a Layer-2 solution on Ethereum, its technology is compatible with Layer-3/4/etc. Any business or Dapp can run a native Layer-3 on top of the Rollup to scale to its needs. Moreover, its gas fees are paid in a stablecoin rather than volatile cryptocurrencies.
There is tremendous optimism surrounding rollups and how they will advance blockchain development and adoption. A higher throughput at lower fees benefits millions of people. Moreover, they represent an appealing puzzle piece toward building a decentralized internet with Web3 technology.