What is Rollup

Rollups are a type of Layer 2 solution.

Layer 2 solutions are mechanisms designed to improve the scalability and efficiency of a blockchain (commonly referred to as Layer 1) by executing transactions and smart contracts off the main chain. They aim to reduce network congestion, lower transaction fees, and increase transaction throughput. Examples of Layer 2 solutions include state channels, sidechains, and rollups.

For more information, you may check out "What is Layer 2?"

Rollups, on the other hand, are a specific type of Layer 2 solution that bundle or "roll up" multiple transactions into a single proof, which is then posted on the main blockchain (Layer 1). By aggregating transactions off-chain and only periodically submitting the proof to the main chain, rollups help reduce the amount of data stored on the Layer 1 blockchain, improving its scalability.

There are two main types of rollups: Optimistic Rollups and Zero-Knowledge Rollups (ZK-Rollups). Optimistic Rollups rely on users submitting fraud proofs in case of malicious behavior, while ZK-Rollups use zero-knowledge proofs to ensure transaction validity without requiring the main chain to verify the details of each transaction.

ZK-rollups have the advantage in theoretical transactions-per-second (TPS) cap, transaction finality time, and security over Optimistic rollups. However, they fall behind in EVM compatibility as of April 2023. This has led Vitalik Buterin to believe that Optimistic rollups will likely be superior in general-purpose EVM computation in the short term. But in the medium to long term, ZK-rollups will win as technology improves.