Hustle FlavoursAIRDROP 🆚 RETRODROP
Do you know the difference between Airdrop and Retrodrop? I just realised, that in crypto community users are not separating this 2 definitions in general. Mostly, if we are talking about some token drop from any project, we used to call it airdrop, but in fact, there is a difference in definitions of these two words. Drop in crypto is a marketing instrument which is used by projects to grab attention of new users and to encourage adoption of the cryptocurrency, by spreading coins or tokens t...
Hustle Flavours8 Websites Offering $700 to $1,200 Per Month Opportunities
In today’s ever-evolving job market, remote work has emerged as a game-changer. The global shift towards telecommuting has opened up a world of opportunities for individuals seeking flexible employment options. Whether you’re looking to supplement your income or make a full-time career change, remote jobs are booming, and there are numerous websites that can connect you with exciting opportunities. In this article, we’ll explore ten websites where you can find remote jobs offering monthly ear...
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Hustle FlavoursAIRDROP 🆚 RETRODROP
Do you know the difference between Airdrop and Retrodrop? I just realised, that in crypto community users are not separating this 2 definitions in general. Mostly, if we are talking about some token drop from any project, we used to call it airdrop, but in fact, there is a difference in definitions of these two words. Drop in crypto is a marketing instrument which is used by projects to grab attention of new users and to encourage adoption of the cryptocurrency, by spreading coins or tokens t...
Hustle Flavours8 Websites Offering $700 to $1,200 Per Month Opportunities
In today’s ever-evolving job market, remote work has emerged as a game-changer. The global shift towards telecommuting has opened up a world of opportunities for individuals seeking flexible employment options. Whether you’re looking to supplement your income or make a full-time career change, remote jobs are booming, and there are numerous websites that can connect you with exciting opportunities. In this article, we’ll explore ten websites where you can find remote jobs offering monthly ear...
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Rollups are a technology for scaling and improving blockchain performance that is used in Layer 2 (L2) networks. In a nutshell, it works as follows: Transactions are processed outside the blockchain, then grouped and “packetized” into the core network to be committed.
Main types of rollups
There are two main types of technology:
Zero-Knowledge Rollups (ZK-Rollups) - works based on the Zero-Knowledge Proof (ZKP) protocol, whereby a transaction is verified with privacy within the underlying network;
Optimistic Rollups - relies on the workings of fraud proof. In this case, all transactions are assumed to be correct by default, and the protocol is activated only if inconsistencies are detected.
The ultimate goal is to relieve the load on the core network, speed up transaction processing and reduce commission costs. Below we take a closer look at how each type of technology works.
How does ZK-Rollups work?
ZK-Rollups is a tier 2 scaling solution. The technology is built on zero-disclosure proofing, whereby information is validated without revealing sensitive data.
The technology collects and processes information outside of the core network for the transaction. The smart contract combines this data into a single “rollup” and a ZKP cryptographic proof-of-concept is created based on this data package. That is, the correctness of transactions is confirmed without disclosing any information to the verifier.
Then, only the proof itself and the minimum necessary part of data to update the main blockchain are written to the main network. Thanks to this, the speed of transaction processing is significantly increased.
It is worth noting that there are several variants of ZK-Rollups technology implementation. For example, ZK-STARK is a proprietary development of StarkWare.
Ethereum co-founder Vitalik Buterin believes that in ten years, all rollups will use ZKP.
Pioneers in the creation of ZKP-based rollup technology are considered to be:
Matter Labs team - behind the development of zkSync, an Ethereum scaling solution. The project launched on the main network in 2020;
StarkWare launched Starknet in 2021. The project aims to scale the blockchain ecosystem and DeFi applications.
It is worth noting that rollup technology is not only used to scale Ethereum. In early 2024, Chainway Labs closed a seed round of funding to create the first ZK-Rollups-based solution for the bitcoin network.
How does Optimistic Rollups work?
Optimistic Rollups is a technology for increasing blockchain throughput that by default determines all transactions to be valid unless there is evidence to the contrary.
This approach ensures high speed of transaction processing, as there is no need to spend time on confirmations. At the same time, the system leaves time for the transaction to be challenged.
If the transaction turns out to be invalid, then the smart contract invalidates it and updates the data package again. The validator, on the other hand, is sanctioned.
Using Optimistic Rollups involves some delay in withdrawing funds to the main blockchain (about seven days). Therefore, teams can resort to the services of liquidity providers. With their help, assets can be withdrawn faster, but you will have to pay for the services.
In the early days of the rollup segment, Optimistic Rollups were in great demand because of their simplicity and affordability.
Arbitrum is one of the popular projects that is powered by Optimistic Rollups. At the beginning of 2023, this L2 solution managed to surpass Ethereum in the number of daily transactions.
Advantages and disadvantages of rollups
Rollup technology emerged as an answer to the blockchain's scalability problem. Among its advantages:
high throughput;
low fees;
reduced load on the core network;
EVM compatibility.
In addition, it is worth noting the high level of privacy preservation during transactions due to off-chain data storage (in the case of ZK-Rollups). It is likely that in the future, zero-disclosure proof of concept will contribute to the protection of personal information.
However, there are a number of drawbacks to be aware of. Despite the fact that the technology relies on the consensus system of the core network, it still takes some transactions outside of it, which involves some risks. For example, there is an increased chance of encountering errors in smart contracts or other vulnerabilities.
In addition, rollups remain a difficult technology to implement and have limited compatibility with other decentralized systems.
Conclusion
The growth in the number of cryptocurrency users leads to an increased load on blockchains, requiring an increase in the capacity of networks. Developers are testing many options to solve the scalability problem. Rollups are just one of them. Despite its novelty, the technology already has managed to prove its effectiveness.
Rollups are a technology for scaling and improving blockchain performance that is used in Layer 2 (L2) networks. In a nutshell, it works as follows: Transactions are processed outside the blockchain, then grouped and “packetized” into the core network to be committed.
Main types of rollups
There are two main types of technology:
Zero-Knowledge Rollups (ZK-Rollups) - works based on the Zero-Knowledge Proof (ZKP) protocol, whereby a transaction is verified with privacy within the underlying network;
Optimistic Rollups - relies on the workings of fraud proof. In this case, all transactions are assumed to be correct by default, and the protocol is activated only if inconsistencies are detected.
The ultimate goal is to relieve the load on the core network, speed up transaction processing and reduce commission costs. Below we take a closer look at how each type of technology works.
How does ZK-Rollups work?
ZK-Rollups is a tier 2 scaling solution. The technology is built on zero-disclosure proofing, whereby information is validated without revealing sensitive data.
The technology collects and processes information outside of the core network for the transaction. The smart contract combines this data into a single “rollup” and a ZKP cryptographic proof-of-concept is created based on this data package. That is, the correctness of transactions is confirmed without disclosing any information to the verifier.
Then, only the proof itself and the minimum necessary part of data to update the main blockchain are written to the main network. Thanks to this, the speed of transaction processing is significantly increased.
It is worth noting that there are several variants of ZK-Rollups technology implementation. For example, ZK-STARK is a proprietary development of StarkWare.
Ethereum co-founder Vitalik Buterin believes that in ten years, all rollups will use ZKP.
Pioneers in the creation of ZKP-based rollup technology are considered to be:
Matter Labs team - behind the development of zkSync, an Ethereum scaling solution. The project launched on the main network in 2020;
StarkWare launched Starknet in 2021. The project aims to scale the blockchain ecosystem and DeFi applications.
It is worth noting that rollup technology is not only used to scale Ethereum. In early 2024, Chainway Labs closed a seed round of funding to create the first ZK-Rollups-based solution for the bitcoin network.
How does Optimistic Rollups work?
Optimistic Rollups is a technology for increasing blockchain throughput that by default determines all transactions to be valid unless there is evidence to the contrary.
This approach ensures high speed of transaction processing, as there is no need to spend time on confirmations. At the same time, the system leaves time for the transaction to be challenged.
If the transaction turns out to be invalid, then the smart contract invalidates it and updates the data package again. The validator, on the other hand, is sanctioned.
Using Optimistic Rollups involves some delay in withdrawing funds to the main blockchain (about seven days). Therefore, teams can resort to the services of liquidity providers. With their help, assets can be withdrawn faster, but you will have to pay for the services.
In the early days of the rollup segment, Optimistic Rollups were in great demand because of their simplicity and affordability.
Arbitrum is one of the popular projects that is powered by Optimistic Rollups. At the beginning of 2023, this L2 solution managed to surpass Ethereum in the number of daily transactions.
Advantages and disadvantages of rollups
Rollup technology emerged as an answer to the blockchain's scalability problem. Among its advantages:
high throughput;
low fees;
reduced load on the core network;
EVM compatibility.
In addition, it is worth noting the high level of privacy preservation during transactions due to off-chain data storage (in the case of ZK-Rollups). It is likely that in the future, zero-disclosure proof of concept will contribute to the protection of personal information.
However, there are a number of drawbacks to be aware of. Despite the fact that the technology relies on the consensus system of the core network, it still takes some transactions outside of it, which involves some risks. For example, there is an increased chance of encountering errors in smart contracts or other vulnerabilities.
In addition, rollups remain a difficult technology to implement and have limited compatibility with other decentralized systems.
Conclusion
The growth in the number of cryptocurrency users leads to an increased load on blockchains, requiring an increase in the capacity of networks. Developers are testing many options to solve the scalability problem. Rollups are just one of them. Despite its novelty, the technology already has managed to prove its effectiveness.
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