Optimistic Rollup

An Optimistic Rollup is a layer-2 scaling solution for Ethereum that processes transactions off-chain, assumes they are valid, and posts compressed data to the main chain, relying on fraud proofs to ensure correctness.

What is an Optimistic Rollup?

Optimistic Rollups are a type of layer-2 scaling solution designed to increase Ethereum’s transaction throughput and reduce gas fees while leveraging the main chain’s security and decentralization. They operate by executing transactions off-chain in a separate environment, bundling (or “rolling up”) thousands of transactions into a single batch, and submitting a compressed summary to Ethereum’s layer-1 blockchain.

Unlike ZK-Rollups, which use cryptographic proofs for validation, Optimistic Rollups assume transactions are valid by default (“optimistic”) but include a challenge period—typically 7 days—during which anyone can submit fraud proofs to dispute invalid transactions. If a fraud proof is verified, the incorrect state is reverted, ensuring security.

Key implementations include Arbitrum and Optimism. Arbitrum One, for instance, has processed over 1.2 billion transactions as of 2025, significantly reducing costs for users (e.g., fees as low as $0.10 compared to Ethereum’s $1-$50). These rollups are EVM-compatible, allowing developers to deploy existing Ethereum smart contracts with minimal changes, making them popular for DeFi and NFT applications. Data availability is maintained by posting transaction data or compressed state updates to Ethereum’s layer-1, ensuring transparency and auditability.

However, Optimistic Rollups have trade-offs. The challenge period delays withdrawals to the main chain, which can frustrate users needing fast liquidity. Additionally, reliance on centralized sequencers for transaction ordering introduces potential risks, though decentralized sequencer designs are being explored. Despite these challenges, Optimistic Rollups are a cornerstone of Ethereum’s scaling ecosystem, handling millions of transactions daily while preserving the network’s security and reducing costs by up to 100x compared to layer-1.