Rollups as a Solution for Scalability

Rollups as a Solution for Scalability

No one argues that blockchain is an innovative technology that puts the principles of decentralization and security at the forefront. However, nothing is ideal in our world, and blockchain networks have had to sacrifice their scalability to achieve greater decentralization and security. Nevertheless, the search for a solution to this problem never stopped, and as part of these solutions, 2L technology was proposed. 2L solutions still did not completely remove the severity of the scaling problem, although received with enthusiasm at the very beginning of implementation. And recently, developers of web 3 projects have increasingly begun to strive to use Rollups as one of the ways to save space and computing power in the blockchain. It is not difficult to guess that the IT services market instantly responded to such demand from developers and formed a new niche in the provision of services - rollups as a service.

About the scalability problem

If you ask the question: “Is there anything in common between the Ethereum blockchain and a food delivery service?”, many will simply laugh in response. And yet, this strange question illustrates very well the principle of operation of the Ethereum network and we will explain it. Let's imagine that a food order delivery service has a group of several couriers. One day, almost all couriers were fully involved in delivery and only three free couriers remained, while there were many more orders left. Couriers have a choice of priority food delivery locations. Obviously, the choice of couriers will depend on the cost of orders - the more expensive and profitable the order, the greater the likelihood of it being fulfilled first. The Ethereum blockchain network works on approximately the same principle, delivering transactions, only instead of couriers, the network uses the number of transactions per second. During their delivery couriers receive tipping from customers. Ethereum also has its own “tipping” and this "tipping" means the GAS that network participants use to carry out their transactions. The order of transactions is determined by the amount of GAS that is spent on it.

One of the main issues that concerns the food delivery service is the question of how to make sure that customers wait as little time as possible for delivery. And by analogy, the main task of the net Ethereum is how to make the number of transactions stuck waiting to get into the network also decreases. And at the same time, the tipping/GAS remained within reasonable limits. This example illustrates one of the main problems of a blockchain network – the problem of scalability. And as we mentioned above, Rollups are one way to solve this problem. Let's remember that all blockchain networks are designed to accommodate, first of all, transactions, however, for example, the Ethereum network additionally stores data. The data to be stored can be absolutely anything, even consisting of just one phrase. And if the developer writes a program to run this data, the user will receive a so-called smart contract.

Returning to the problem of scalability and its solution, we approve that it is Rollups that allow you to carry out transactions themselves outside the main chain of the blockchain network and send only transaction data there. Everyone knows that the amount of data that each block of the Ethereum network can hold is limited. But the feature of the Ethereum that we mentioned, namely the ability to store and transmit any data, makes Rollups possible to send just data instead of the transactions themselves. In other words, if one record in a block can contain data about several transactions, then it is obvious that the scalability of each block increases significantly. All this work of collapsing the contents of each block of the network is carried out by Rollups.

Types of Rollups

However, with this approach to forming blocks in the blockchain, one point raises anxiety - how to make sure that the data included in the block is correct and does not contain fraudulent transactions? To answer this question, the creators offer users two types of Rollups: ZKsnarks Rollups and Optimistic Rollups. In short, ZKsnarks Rollups rely on cryptography, meaning they provide instant mathematical proof that the transactions included in the block are correct. ZKsnarks Rollups work proactively, as they first analyze each transaction for authenticity and only then send it to the blockchain. This approach is called “Proof of Credibility.” Optimistic Rollups rely on a verificator and act after the fact, that is, after there have been any verified complaints of fraud. This approach is called “Proof of Fraud”. These two approaches are fundamentally different from each other, which means that the consequences of their application will also be different. Optimistic Rollups take longer to withdraw assets as they await verified evidence of fraud. The proactive work of ZKsnarks Rollups significantly reduces the time it takes to withdraw assets, however, these Rollups themselves are much more complex, since complex computational processes take place there.