Ethereum’s top dapps are increasingly turning to rollups: here’s why

Ethereum scaling solutions are heterogeneous, which makes them difficult to monitor.

For those chatting about everything Ethereum-related, rollups are the latest technology that was first introduced a calendar year ago at Devcon V in Osaka, Japan. According to the teams surveyed by CoinDesk, the majority of the top 20 decentralized applications (dapps) based on Ethereum have switched to a roll-up solution or are planning to do so in the coming months.

For example, Coinbase Wallet now has native support for Optimism’s OVM test network, according to a Tuesday blog.

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A rollup is fundamentally different from the fruit variety and is an off-chain aggregation of transactions within an Ethereum smart contract. Ethereum users can conduct transactions within the contract with security guarantees so that their transactions are not abused and they settle in the main chain at a later point in time.

The main benefits of transaction aggregation for Dapps have been observed over and over again this summer as Ethereum’s average transaction fee broke historic records multiple times.

Continue reading: Decentralized financial frenzy is driving transaction fees for Ethereum to an all-time high

When it comes to the method of guaranteeing transactions, the rollup constructions diverge: One of them is Zero Knowledge Proof Rollups (ZKR), which rely on mathematics. On the other hand, there are optimistic rollups (OR) based on financial incentives.

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Rollups have been part of the concept since 2014, described as “shadow chains”. by Ethereum co-founder Vitalik Buterin.

Ethereum developer? like all blockchain developers? have been looking for workable scaling options since the project started in 2015. Most solutions, including plasma and status channels, have failed or only partially worked. These bugs caused many developers to revisit Buterin’s shadow chains, which we now call rollups.

On a blog earlier this month, Buterin identified Rollups as the scaling strategy for the short and medium term future. due to the high demand for a scalable blockchain today. Ethereum 2.0? A new, split proof-of-stake (PoS) blockchain is intended as a long-term solution, but is not ready for production in years.

Continue reading: Everything you need to know about Ethereum 2.0

The two best-known rollup companies are Paradigm-Backed Optimism, formerly known as Plasma Group, for the OR and Matter Labs for the zk rollup, ZK-Sync. Teams like Fuel Labs and Starkware are also working on much-touted implementations.

Rollups as throughput solutions

However, a point of clarification is needed. Rollups are not a scaling solution for Ethereum or a blockchain, but a throughput solution

Scalability, as Summa co-founder James Prestwich said in a July tweet, increases the number of transactions a network can process without changing hardware requirements.

Throughput, on the other hand, also increases the number of transactions, but requires more hardware to achieve this.

As Prestwich notes, the hardware problem really boils down to what it takes to validate each transaction. Layer 2 (L2) solutions like ZKR and OVR require additional hardware setups, as evidence of handling rollup transactions in the chain often requires additional hardware support to get the job done.


The connection between CCNR and OR is the mechanism that proves the validity of transactions. In plain English, this means that the transaction bundle contained in a rollup must be checked in some way

Rollups can be viewed as a kind of mining block. Transactions are moved off-chain, bundled, sequenced, and then sent back to the main chain

CCNRs bundle a group of transactions, compress them, and slam on knowledge-free evidence to confirm the validity of state transitions, as Buterin describes in a 2019 blog post. When the transaction is sent to the main chain, the block is verified by the attached zero-knowledge certificate.

Continue reading: EY unveils a knowledge-free data protection solution for Ethereum

OPs, on the other hand, use game theory. Rather than attaching evidence, a sequencer allows a bond to win, known as fraud evidence, which is seizable if a sequencer commits malicious acts such as sequencing transactions against prior rules.

This is what makes optimistic rollups optimistic: they operate on the assumption that everyone is acting ethically, but include a fallback in case a malicious party arrives.


At first glance, CCNRs seem to be cheaper than OPs: There is no bond, and trust is ensured by the zero-knowledge proof.

But CCNRs have some drawbacks, at least for the time being. On the one hand, CCNRs require special hardware to create the computationally intensive proof.

For example, Privacy Coin Zcash is based on knowledge-free evidence and was only able to start protected transactions on its mobile wallet this year as it is difficult to produce this evidence without a lot of computational effort.

Continue reading: Zcash newest hard fork? Heartwood? Make mining private

Additionally, CCNRs cannot interact with the Ethereum Virtual Machine (EVM) in the same way as ORs. This limits the application of CCNRs to some blockchain actions, e.g. B. a basic transaction.

The benefit of fraud evidence is its simplicity? Zk rollups require your contracts to be written as a complex zero-knowledge circuit and a lot of fancy math. This means you can’t use the EVM, so you lose half a decade of developer tools and mindshare. Optimism co-founder Ben Jones said in an email to CoinDesk.

Matter Labs founder Alex Gluchowski told CoinDesk in a Telegram message that optimistic rollups also have their own problems

For example, there is a tension between the size of an OP and the amount of an asset to be processed, Gluchowski said

In other words, it is theoretical that an OR-based sequencer processes enough transactions that it becomes profitable to abuse its position as a sequencer. even if they could cut open the evidence of fraud. That way, there is likely a cap on the number of transactions an OP can trust in processing versus CCNRs, he said.

The more assets an individual OP has, the more vulnerable it becomes to various attacks. And the more transactions there are in a single OP, the more difficult it becomes to run a full node, which further reduces security. Said Gluchowski.

CoinDesk’s invest: Ethereum economy is a fully virtual event on October 14th that examines the impact of the profound changes in the Ethereum ecosystem for investors. Learn more.

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