Ethereum, the world’s second-largest blockchain network, persistently grappling with scalability issues due to its popularity and increased network congestion, has had the concept of Layer 2 chains in mind since 2014. As more users and decentralized applications (dApps) were released, transaction costs skyrocketed, and processing times slowed significantly. To address these challenges, developers explored various scaling solutions to optimize Layer 2s, with Ethereum rollups emerging as one of the most promising approaches.An Ethereum rollup is a Layer 2 scaling solution that processes multiple transactions off the main Ethereum blockchain (Layer 1), bundles them into a single transaction, and then submits this bundled transaction back to the main chain. By moving the bulk of transaction processing off-chain, rollups can significantly increase the throughput of the Ethereum network while reducing gas fees for users.Rollups are designed to maintain the security and decentralization of the Ethereum mainnet while improving its scalability. They achieve this by leveraging the main chain for data storage and dispute resolution while executing transactions on a separate layer. This approach allows rollups to benefit from Ethereum’s security while minimizing the load on the main network.There are two main types of Ethereum rollups: Optimistic Rollups and Zero-Knowledge Rollups (ZK-Rollups).Optimistic rollups operate on the assumption that all transactions are valid until proven otherwise. They process transactions off-chain and submit the transaction data to the main Ethereum chain along with cryptographic proof. Anyone who suspects a fraudulent transaction can challenge it during a dispute period. If a transaction is proven invalid, the rollup executes a “fraud-proof” and reverts the invalid transaction.Advantages of Optimistic Rollups:Disadvantages of Optimistic Rollups:Examples of Optimistic Rollup projects include Optimism and Arbitrum.ZK-Rollups use zero-knowledge proofs, a cryptographic technique that allows one party to prove the validity of a statement to another party without revealing any additional information. In the context of Ethereum rollups, ZK-Rollups process transactions off-chain and generate a cryptographic proof, known as a SNARK (Succinct Non-Interactive Argument of Knowledge), which is then submitted to the main Ethereum chain.Advantages of ZK-Rollups:Disadvantages of ZK-Rollups:Examples of ZK-Rollup projects include Loopring, Starkware, and zkSync.Ethereum rollups represent a promising approach to scaling the Ethereum network while maintaining its security and decentralization. As the ecosystem matures and more projects implement rollup solutions, users can look forward to lower transaction costs, faster processing times, and a more accessible and user-friendly experience on the Ethereum network.Also known as “Akiba,” Liam is a reporter, editor and podcast producer at CryptoSlate. He believes that decentralized technology has the potential to make widespread positive change.CryptoSlate is a comprehensive and contextualized source for crypto news, insights, and data. Focusing on Bitcoin, macro, DeFi and AI. Your daily dose of must-have crypto news and deep dives. Direct to your inbox.The S-1 filing follows the SEC’s approval of NYSE Arca’s proposed rule change on behalf of ProShares.All spot ETH ETFs have yet to launch despite recent developments.ICBC compared Bitcoin to gold and said Ethereum has established itself as “digital oil” capable of powering myriad applications across the web3 ecosystem.DeFillama data shows the platform’s TVL rose 135% despite the attack.CryptoSlate’s latest market report dives deep into the effects corporate Bitcoin purchases have on the market.Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.
