Rollup

A rollup is a Layer 2 scaling solution that bundles or “rolls up” multiple transactions into a single batch, then submits that batch to a Layer 1 blockchain like Ethereum. This allows rollups to significantly reduce gas fees and increase transaction throughput, while still inheriting the security of the underlying mainnet.

Rollups are central to Ethereum’s scalability roadmap and are used by major Layer 2 networks like Optimism, Arbitrum, zkSync, and Starknet.

How Rollups Work

• Batching Transactions – User transactions are aggregated off-chain into a single batch.
• State Commitment – The batch is submitted to Ethereum with a summary of the updated state.
• Proof Mechanism – Depending on the rollup type, a cryptographic proof is included (validity or fraud proof).
• On-Chain Verification – Ethereum verifies the proof or accepts the batch for inclusion in the mainnet.
• Users Interact via Bridges – Assets and data are moved between L1 and L2 using smart contract bridges.

Key Features

• Lower Gas Fees – By batching transactions, rollups drastically reduce per-user costs.
• Ethereum Security – Rollups post data and proofs on Ethereum, ensuring trustlessness.
• Fast Finality – Transactions are confirmed quickly on L2, with final settlement on L1.
• Smart Contract Support – Rollups are EVM-compatible, supporting DeFi, NFTs, and dApps.
• Two Types – There are two main kinds: optimistic rollups and zero-knowledge (zk) rollups.

Benefits of Rollups

• Scalability – Increase Ethereum's throughput from ~15 TPS to thousands of TPS.
• Cost Efficiency – Ideal for microtransactions, NFT minting, and DeFi at scale.
• Developer-Friendly – Many rollups support Solidity, making migration from L1 seamless.
• Security Inheritance – Leverages Ethereum’s base layer for finality and protection.
• Ecosystem Growth – Powers the expansion of apps, games, and marketplaces on Layer 2.

Use Cases of Rollups

1. Low-Cost DeFi – Protocols like Uniswap on Arbitrum and Aave on Optimism reduce fees for lending, trading, and swaps.
2. NFT Minting – Platforms like zkSync offer gas-efficient minting for artists and creators.
3. Gaming and Metaverses – Rollups enable scalable gameplay and microtransactions.
4. Enterprise Applications – Businesses use rollups to access Ethereum’s security with higher throughput.
5. Cross-Rollup Infrastructure – Tools like Hop Protocol and Connext help users move assets between rollups.
6. Public Goods Funding – Projects like Gitcoin are integrating rollups to reduce transaction costs for community grants.