Rollups are crucial for ramping up scalability on major blockchains — but two very different approaches have emerged. What are the pros and cons of each?
Layer 2 solutions are all the rage these days — as they help flagship blockchains like Bitcoin and Ethereum reach their full potential.
In layman’s terms, these protocols can be compared to a house annex. They’re separate from the main network (just like an annex might have its own front door,) extending the capacity and benefits of the original house.
The Benefits of Layer 2 Solutions
L2 chains have grown in importance as demand for crypto transactions booms. The flagship Bitcoin blockchain can only handle 7 transactions per second (by design), meaning innovative solutions are required so it can scale and be future-proof.
Rollup solutions achieve this by offering a separate network where multiple transactions are processed — and then bundled together so they can be duly recorded on the layer 1 chain (e.g. Bitcoin, Ethereum). This achieves the best of both worlds. Not only does this relieve congestion on the layer 1 network, but it allows transactions to be much cheaper and faster than before.
As with some of the greatest brand rivalries of our time — Pepsi versus Coca-Cola, PCs versus Macs — Layer 2s have more than one way of achieving this. In this article, we’re going to put Optimistic Rollups and ZK Rollups against each other, comparing the merits of the two.
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Optimistic Rollups
First, let’s turn our attention to Optimistic Rollups. As the name suggests, the optimism approach assumes that there are no fraudulent transactions unless a challenge is put forward. This means that validators are under greater pressure to detect invalid transfers.
How do Optimistic Rollups work?
Here, transactions are bundled together and processed away from the main chain. Once a predetermined period passes without any objections, the data is compressed and added to the mainnet. Anyone found approving fraudulent transactions faces a penalty.
Pros & Cons
While transactions on a layer 2 are instantaneous and extremely cheap, the prospect of a days-long wait for withdrawing the tokens back to a layer 1 is a drawback in an age where instantaneous transfers are becoming the norm. But on the other hand, there’s often far less friction when Optimistic Rollups are being integrated into DeFi protocols.
Example of optimistic rollups
Arbitrum is one Layer 2 blockchain that uses Optimistic Rollups in an attempt to make Ethereum less expensive to use — a crucial antidote when gas fees surge because the sale of digital kitties has sent crypto enthusiasts into a frenzy. It’s already been embraced by the likes of SushiSwap and Curve.
Zero-Knowledge (ZK) Rollups
Zero-knowledge rollups take a different approach — and use a cutting-edge form of cryptography known as zero-knowledge proofs.
How do ZK Rollups work?
Rather than waiting to hear if there are any objections before bundling up a transaction, ZK rollups shortcut this process by demanding verification upfront. This is in the form of mathematical proof — a way of allowing one party to prove they have specific information, without revealing what it is.
Pros & Cons
While transactions are swift and fees could be cheaper than an L1, ZK rollups have the added cost of a prover infrastructure that adds to transaction fees. The end result is this: crypto transactions that can be achieved in the blink of an eye, with potentially minimal fees.
Developer Preferences and Use Cases
Rollups on Rootstock matter because they help to tackle the limitations that exist in the Bitcoin network — and make Everyday DeFi a reality by ensuring that interacting with blockchains is as fast, cheap and frictionless as possible.
We want to hear about your priorities, your use cases, and the hurdles you’ve experienced so far. It’ll help to make RIF Rollups even better, and create the preeminent platform for 21st-century money transfers.
Do you want to help us build a rollup solution on the Rootstock blockchain?
We’re calling for all developers to share your thoughts on rollup solutions to help shape the future of RIF Rollup
Fill out the anonymous survey to be a part of shaping the RIF Rollup solution.