Rollup

A rollup is a layer-2 scaling solution for Ethereum that processes transactions off-chain while leveraging Ethereum’s main chain for security and data availability, improving scalability and reducing costs.

What is a Rollup?

Rollups are a type of layer-2 scaling solution designed to enhance Ethereum’s transaction throughput and reduce gas fees while maintaining the network’s decentralization and security. They work by processing and bundling (or “rolling up”) hundreds or thousands of transactions off-chain into a single batch, which is then submitted to Ethereum’s layer-1 main chain for verification and data storage. This approach significantly reduces the computational load on Ethereum, enabling faster and cheaper transactions without sacrificing the main chain’s security guarantees.

There are two main types of rollups: Optimistic Rollups and ZK-Rollups (Zero-Knowledge Rollups). Optimistic Rollups, such as Arbitrum and Optimism, assume transactions are valid by default but allow a challenge period (typically 7 days) during which invalid transactions can be disputed via fraud proofs. They are widely used due to their compatibility with Ethereum’s Virtual Machine (EVM), enabling developers to deploy existing smart contracts easily. For example, Arbitrum One has processed over 1 billion transactions as of 2025, significantly alleviating Ethereum’s congestion.

ZK-Rollups, like zkSync and Starknet, use cryptographic zero-knowledge proofs to validate transactions instantly, offering faster finality but requiring more complex computation. Both types store transaction data on Ethereum’s layer-1, ensuring data availability and security.

Rollups have become critical to Ethereum’s scalability roadmap, complementing upgrades like sharding. They enable applications like decentralized finance (DeFi) and NFT marketplaces to handle higher transaction volumes at lower costs—often reducing fees from tens or hundreds of dollars to cents. However, rollups rely on sequencers (nodes that order transactions), which can introduce centralization risks, and users may face delays when withdrawing funds back to layer-1. Despite these trade-offs, rollups are a cornerstone of Ethereum’s ecosystem, processing millions of transactions daily while preserving the network’s core principles.