What if there was a way to reduce these fees and increase transaction efficiency? Well, now there is using rollups. But what are rollups? Rollups reduce blockchain transaction costs by "rolling up" multiple batches of transactions into a single transaction.
What are rollups?
Ethereum blocks are limited by the amount of data they can hold. For example, suppose a block can only have 100 transactions. This means that if 100,000 people want to make a transaction at the same time, Ethereum will first choose the 100 with the highest bids.
Since gas fees are based on the current demand on the blockchain at a given moment, these fees can become prohibitively expensive. However, since a transaction can also be just a piece of data, what if you could have ten transactions in one piece of data?
Rollups reduce costs: The cost of Ethereum transactions, plus the small cost of batching transactions, is shared by users. They also speed things up: Rollup execution is so fast that the Ethereum blockchain only needs to process a single transaction instead of multiple transactions. This is useful when Ethereum is processing up to 15 transactions per second without help.
Rollups are useful because they reduce gas costs, increase transaction throughput, and expand participation. One question you might have about rollups is how does Ethereum know that the data posted is valid and not submitted by someone trying to exploit the system? Ultimately, it depends on the specific rollup implementation, but in general, each rollup deploys a set of smart contracts on Layer 1 responsible for processing deposits and withdrawals and validating proofs.
Two types of rollups
There are two main types of rollups, optimistic and zero-knowledge (ZK). The benefit of both is that they greatly reduce transaction costs. The idea is that instead of waiting and paying for each transaction to be processed independently on Ethereum, dozens of transactions are recorded on the layer 2 chain and then "aggregated" into a single transaction, which is then fed back to a more expensive transaction, which is more expensive. slow blockchain. This way, the cost of one transaction is spread across many users.
Optimistic-rolllups
The first variety is called Optimistic Rollup. This is because it optimistically assumes that all transactions included in the rollup are valid. Optimistic rollups give everyone on the network a certain amount of time, usually a week, to combat fraudulent transactions. The nice thing about Optimistic rollup is that it's fast; by assuming things are correct, the network doesn't have to waste time confirming things. The downside is that it usually takes about a week to officially withdraw your funds from popular networks like Optimism or Arbirtrum.
ZK-rollups
ZK-rollups have many advantages over Optimistic rollups in terms of speed and security, but they are much more complex under the hood. All ZK-rollups so far have specific applications, meaning they can only support specific services or use cases (such as exchanging non-fungible tokens or transferring cryptocurrencies between addresses).
Demonstrate and publicly record the validity of blocks on the Ethereum blockchain using a "zero-knowledge proof" approach. ZK computational reduces and storage resources for validating blocks by reducing the amount of data held in a transaction; requires zero knowledge of the entire data.
So I hope now you know about what are rollups. Overall, rollups are Ethereum's solution to high gas fees, slowing transaction times, and improving scalability.
