ROLLUPS – The Ultimate Ethereum Scaling Strategy? Arbitrum & Optimism Explained

So what are rollups all about? What’s the difference between optimistic and ZK rollups? How is Arbitrum different from Optimism? And why are rollups considered to be the holy grail when it comes to scaling Ethereum? You’ll find answers to these questions in this video. 

Ethereum scaling has been one of the most discussed topics in crypto. The scaling debate usually heats up during periods of high network activity such as the CryptoKitties craze in 2017, DeFi Summer of 2020 or the crypto bull market at the beginning of 2021. During these periods, the unparalleled demand for the Ethereum network resulted in extremely high gas fees making it expensive for everyday users to pay for their transactions. 

To tackle this problem, the search for the ultimate scaling solution has been one of the top priorities for multiple teams and the Ethereum community as a whole. In general, there are 3 main ways to scale Ethereum or in fact, most other blockchains: scaling the blockchain itself - layer 1 scaling; building on top of layer 1 - layer 2 scaling and building on the side of layer 1 - sidechains. When it comes to layer 1, Eth2 is the chosen solution for scaling the Ethereum blockchain. Eth2 refers to a set of interconnected changes such as the migration to Proof-of-Stake (PoS), merging the state of the Proof-of-Work (PoW) blockchain into the new PoS chain and sharding. Sharding, in particular, can dramatically increase the throughput of the Ethereum network, especially when combined with rollups.

When it comes to scaling outside of layer 1, multiple different scaling solutions have been tried with some mixed results. On the one hand, we have layer 2 solutions such as Channels that are fully secured by Ethereum but work well only for a specific set of applications. Sidechains, on the other hand, are usually EVM-compatible and can scale general-purpose applications. The main drawback - they are less secure than layer 2 solutions by not relying on the security of Ethereum and instead having their own consensus models. Most rollups aim at achieving the best of these 2 worlds by creating a general-purpose scaling solution while still fully relying on the security of Ethereum. 

This is the holy grail of scaling as it allows for deploying all of the existing smart contracts present on Ethereum to a rollup with little or no changes while not sacrificing security. No wonder rollups are probably the most anticipated scaling solution of them all. But what are rollups in the first place?