What Are Rollups in Crypto?

Over the years, Ethereum has witnessed imminent growth in terms of users, value, and the overall data the network manages.

The increased usage of Ethereum has now reached its limit of capability, causing network congestion.

Rollups have emerged as the key solution for scalability on Ethereum and other blockchains for the foreseeable future.

Rollups are layer-2 scaling solutions that improve transaction processing on the layer-1 mainnet, addressing network congestion and reducing costs.

There are two main types of rollups: optimistic and zero-knowledge (ZK).

Optimistic rollups use optimistic execution to process transactions off-chain while maintaining security through cryptographic proofs.

Whereas ZK rollups use zero-knowledge proofs to provide scalability and privacy.

Optimistic rollups are ideal for simpler transactions as they don't require extensive privacy measures.

ZK rollups are perfect for applications like decentralized finance (DeFi), as they require confidential and secure transactions.

As Ethereum continues to evolve, rollups will play a pivotal role in enabling a more scalable and efficient blockchain network.