Layer 2 Rollups
Rollups execute transactions off the main blockchain and post only a compressed summary back to it, trading a small trust or delay cost for a large increase in throughput and a large cut in fees.
Prerequisites: Blockchains and Consensus
The main chain of a blockchain like Ethereum ("Layer 1") can only process a limited number of transactions per second before fees spike, because every node must verify every transaction. A Layer 2 rollup works around this by moving execution off-chain: thousands of transactions are batched and run on a separate, cheaper network, and only a compressed summary — the resulting account balances plus a proof it was done correctly — gets posted back to Layer 1.
Two flavors differ in how they prove that summary is honest. Optimistic rollups post results and assume they're correct, but allow anyone a challenge window (often about a week) to submit fraud proof if something's wrong. Zero-knowledge (ZK) rollups post a cryptographic proof alongside the results that mathematically guarantees correctness immediately, with no challenge window needed.
A rollup keeps Layer 1's security guarantee — the data and correctness proof still live on the base chain — while moving the expensive part, execution, somewhere cheaper, which is why rollup transactions can cost a fraction of a Layer 1 transaction fee.
Worked example. A swap that costs $15 in gas fees directly on Ethereum Layer 1 might cost $0.30 on a rollup, because the rollup batches that swap together with hundreds of others and splits one Layer 1 posting fee across all of them. The tradeoff on an optimistic rollup: a withdrawal back to Layer 1 must wait out the full challenge window, often days, unless the user pays a third party a fee to front the funds instantly. ZK rollups skip that wait because the correctness proof removes the need for a challenge period at all — the cost is that generating the cryptographic proof is computationally heavier to build.
Further reading
- Ethereum Foundation, 'Rollups' documentation