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.

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

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

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

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

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

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

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

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

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