Optimistic Rollups

Optimistic Rollups are a Layer 2 (L2) protocol designed to expand Ethereum’s processing capacity. By handling transactions off-chain, they significantly reduce the computational load on the Ethereum mainnet, leading to higher processing efficiency. Unlike sidechains and other scaling solutions, Optimistic Rollups publish transaction outcomes on-chain while storing the actual transaction data elsewhere, similar to how Plasma chains use fraud proofs for security verification.Since computation on Ethereum is both slow and costly, Optimistic Rollups enhance scalability by a factor of 10 to 100. Additionally, transactions on Optimistic Rollups are submitted to Ethereum in the form of calldata, further reducing gas fees for users by optimizing data storage on the mainnet.

Optimistic Rollup architecture

On-Chain Smart Contracts: The operations of Optimistic Rollups are governed by smart contracts deployed on Ethereum, which manage functions such as storing rollup blocks, monitoring state updates, and tracking user deposits. In this sense, Ethereum serves as the foundational layer (Layer 1) for Optimistic Rollups. Off-Chain Virtual Machine (VM): While the Optimistic Rollup protocol's contracts run on Ethereum, the actual computation and state storage occur in a separate virtual machine environment. This off-chain VM executes transactions and updates state independently of Ethereum’s main virtual machine, functioning as the Layer 2 execution environment that enhances scalability.

EVM Compatibility in Optimistic Rollups

One of the key advantages of Optimistic Rollups is their compatibility with the Ethereum Virtual Machine (EVM), or more precisely, their EVM equivalence. Rollups that maintain EVM compatibility adhere to the Ethereum Yellow Paper specifications, ensuring seamless integration with existing Ethereum-based applications.Advantages of EVM Compatibility in Optimistic Rollups

1. Seamless Migration of Smart Contracts – Developers can migrate existing Ethereum smart contracts to Optimistic Rollup chains without significant modifications to their codebase. This greatly reduces the time and effort required to deploy decentralized applications (dApps) on Layer 2.

2. Utilization of Ethereum’s Existing Infrastructure – Development teams using Optimistic Rollups can fully leverage Ethereum’s existing ecosystem, including programming languages, code libraries, testing tools, client software, and development stacks. This minimizes the need for new tooling and infrastructure adaptation.

3. Proven and Audited Development Tools – The ability to use well-established tools is crucial, as these tools have undergone extensive audits, testing, and refinements over the years. This also removes the learning curve for Ethereum developers, eliminating the need to adopt an entirely new development environment.

Advantages of Optimistic Rollup

Advantages
Significantly improves scalability without compromising security or trust assumptions.
Transaction data is stored on Layer 1, enhancing transparency, security, censorship resistance, and decentralization.
Fraud proofs ensure finality even with untrusted parties and allow a small group of honest participants to secure the chain.
Computation fraud proofs are open to regular L2 nodes, unlike ZK-rollups, which require specialized hardware for validity proofs.
Rollups benefit from 'trustless liveness,' allowing anyone to enforce progress by executing transactions and publishing assertions.
Optimistic Rollups use well-designed cryptoeconomic incentives to enhance chain security.
EVM and Solidity compatibility allows developers to migrate Ethereum-native smart contracts to rollups or use existing tools to build dApps.