Skip to main content

What Are Rollups? Ethereum’s Main Scaling Solution Examined

What Are Rollups? Ethereum's Main Scaling Solution Examined

Rollups are structures that have been designed as a way of scaling Ethereum’s capacity to process transactions and data. They group a bunch of tasks and compute them offchain, only posting the result of these transactions to Ethereum, allowing more data to be piled up on L1 (layer one). Ethereum co-founder Vitalik Buterin has been pushing rollups as part of the future of Ethereum scaling since 2020, and with the proposal of Danksharding, its scaling roadmap has become rollup-centric.

Rollups and the Scalability Problem

Ethereum, one of the first-generation smart contracts-enabled blockchains, has been facing a scalability problem due to its limited capabilities for processing transactions and data. In its base layer, Ethereum can process approximately 15 transactions per second (TPS), which was enough in its first stages but is now insufficient given the popularity of the blockchain.

Rollups attack this problem by taking part of the blockchain burden offchain, while maintaining a connection with the parent chain (in this case, Ethereum). Rollups allow processing to be run offchain, only returning a simple result to the parent chain. This achieves two objectives: it lets more data be posted in the chain by other rollups and allows more transactions to be processed quickly at a lesser cost, albeit with a security and decentralization tradeoff.

They are called rollups because most use compression techniques to “roll up” a group of transactions and only output the necessary data to the main chain. While this means that the parent chain will still be constrained if the data output is large, it still helps due to the mentioned compression.

According to Ethereum co-founder Vitalik Buterin, an Ethereum base-layer ERC20 token transfer costs ~45,000 gas, while an ERC20 token transfer in a rollup takes up 16 bytes of on-chain space and costs under 300 gas. Also, migrating a mainnet smart contract to a rollup is possible without too many changes.

Different Kinds of Rollups

Depending on the approach each one takes to validate its data, rollups can be classified into two main groups: Optimistic and ZK-rollups.

Optimistic rollups always assume that transactions realized and proposed are valid and invite users to provide proof of fraud to demonstrate the opposite. If there is a dispute, a fraud-proof is weighted against the party that submitted the data to the Ethereum chain, and the loser gets penalized, seeing their funds slashed. Optimism, Arbitrum, and Base are optimistic rollups.

ZK-rollups rely on cryptography proofs verified by a smart contract on top of the Ethereum network. These validity proofs are updated in each batch of transactions and can be easily verified compared to their optimistic siblings. This makes Zk-rollups cheaper than optimistic rollups. Loopring and Zksync are part of this group.

A Rollup-Centric Roadmap

Ethereum scalability plans included an L1 solution based on sharding, meaning that data would be divided and processed in parallel to allow more transactions with lower transaction fees. However, this design has been substituted for a rollup-centric sharding approach called danksharding, in which the main chain expands to allow more data to be included, allowing rollups to take advantage of this space.

This is the consequence of Vitalik’s Buterin’s rollup-centric scaling proposal, which seeks to turn Ethereum into “a single high-security execution shard that everyone processes, plus a scalable data availability layer.” Buterin estimates that if all protocols and transactions migrate to rollups, Ethereum could hit ~3,000 TPS.

However, with the upcoming improvements derived from the implementation of EIP-4844 (proto-danksharding), which allows rollups to post more data to the parent chain and establishes a separate fee market, the capacity of Ethereum could peak at a theoretical max of ~100,000 TPS.

What do you think about rollups and their importance for Ethereum scaling? Tell us in the comments section below.



from Bitcoin News https://ift.tt/ZXHtoS6

Comments

Popular posts from this blog

Mt Gox Creditors Updated, Trustee Says Rehabilitation Custodian Is ‘Currently Preparing to Make Repayments’

On August 31, 2022, the Mt Gox trustee Nobuaki Kobayashi explained in a recent letter that the rehabilitation custodian is “currently preparing to make repayments” to Mt Gox creditors. Trustee Updates Mt Gox Creditors — Repayment Date and Exchange Still Unknown Last week speculation and rumors concerning the release of 140K bitcoin ( BTC ) from Mt Gox littered social media platforms and headlines. Bitcoin.com News covered the situation six days ago as a number of people and Mt Gox creditors called the rumors “ fake news .” During that same period of time, a bitcoin whale transferred 10,000 BTC to unknown wallets, and a 2018 annotation , heuristics, and clustering methods show the funds likely originated from the June 2011 Mt Gox hacks. Following the mysterious whale transfer, last Wednesday, Mt Gox published an official update from the court trustee Nobuaki Kobayashi that explains the court is “currently preparing to make repayments” to creditors. Mt Gox creditors have been wait...

International Crypto Exchange Luno Adds Bitcoin Cash Trading

Luno exchange has added bitcoin cash trading to the platform following feedback from its client base. BCH is now only the third cryptocurrency available for trading on the exchange, in addition to BTC and ETH , but more options could be on the way once Luno determines that they are credible enough. Also Read: Bitflyer Adds Bitcoin Cash Trading Across Europe and the US Luno Adds Bitcoin Cash Trading Luno, the London-headquartered company formerly known as Bitx, recently announced that bitcoin cash was made available on its cryptocurrency exchange. Starting from Monday, September 23, customers at Luno are now able to store, buy and sell BCH on the platform. The reason given for adding BCH to the exchange is feedback from users in developing markets that convinced Luno to expand their offering from previously just BTC and ETH . Marcus Swanepoel, CEO of Luno, said , “We are in a new and exciting financial era. Developing economies are leading the large-scale adoption and appli...

DefiDollar Listing on AscendEX

PRESS RELEASE. AscendEX, formerly BitMax, an industry-leading digital asset trading platform built by Wall Street quant trading veterans, has announced the listing of the DefiDollar Token (DFD) under the pair USDT/DFD on Apr 29 at 1:00 p.m. UTC. DefiDollar is a DeFi lab that aims to bring mass adoption to DeFi with a wide-ranging product suite. The first product offering to go live will be the stablecoin index – DUSD, with ibBTC and optionCoin currently in development. DefiDollar (DUSD) aspires to be a risk-insured stablecoin layer for DeFi. It is designed to provide a safe and stable way for users to hold their assets with DUSD being optimized for peg safety, yield, and diversification. DefiDollar uses DeFi primitives to stay close to the dollar mark. DUSD provides an avenue for diversifying stablecoin holdings to hedge against an event where the underlying stablecoins like Tether or DAI deviate from their peg. DUSD is collateralized by Curve Finance LP tokens. DFD is the n...