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What Are "Rollups" in Crypto?
Beginner
2025-08-11 | 15m
In the dynamic realm of blockchain technology, the year 2025 has witnessed rollup technology emerging as a revolutionary force. As blockchain networks, especially Ethereum, grapple with soaring user demands, rollups have stepped in as the solution to the long - standing scalability conundrum. They achieve this by processing transactions off - chain, all while maintaining the security and decentralization that are the bedrock of blockchain technology. This article aims to demystify rollups, exploring their inner workings, differentiating between the two main types (optimistic and ZK - rollups), spotlighting leading projects, and elucidating the advantages and risks they present to users.
Decoding Rollups
Blockchain rollups are a scalability solution that processes and bundles several transactions off-chain before submitting them to the main blockchain, reducing congestion on blockchain networks.
Consider a busy checkout queue at a store. Blockchain rollups provide quicker processing by acting as a self-checkout lane. To reduce network congestion, they group transactions and manage them off the main blockchain. This reduces the cost per transaction and expedites the process.
Finally, for security purposes, a single transaction summary, which resembles a receipt for each self-checkout customer, is sent back to the main
blockchain. This allows for faster and less expensive side transactions while maintaining the security of the main system. Rollups accomplish this in a variety of ways, but their main goal is to simplify blockchain transactions without sacrificing security.
The Inner Workings of Rollups
The operational mechanism of rollups is relatively straightforward. Users initiate transactions that are directed to the rollup network. Here, sequencers or validators aggregate and process these transactions off - chain. The transactions are then grouped into batches and periodically submitted to the main blockchain, either with transaction data or cryptographic proofs. The main chain validates these batches, ensuring security and finality, while the rollup network shoulders the bulk of transaction processing.
This approach allows transactions to be executed off - chain, alleviating congestion on the main chain. By batching transactions, users can share gas fees, resulting in cost savings. The security of the underlying blockchain is maintained as a single proof or summary is posted to the main chain. The outcome is a system that enables faster and more cost - effective transactions without compromising on security.
The Two Titans of Rollups: Optimistic vs. ZK - Rollups
Optimistic Rollups
Optimistic rollups operate on the principle of "trust but verify." By default, they assume that all transactions are valid and submit batches to the main chain without prior verification. However, a challenge window, typically lasting 7 days, is in place. During this time, any participant can submit fraud proofs to contest invalid transactions. Projects such as
Arbitrum,
Optimism, and Base are prime examples of optimistic rollups. They offer extensive compatibility with Ethereum smart contracts, but users should be aware of the longer withdrawal periods associated with this type of rollup.
Zero - Knowledge (ZK) Rollups
ZK - rollups, on the other hand, rely on advanced cryptography. Before submitting batches to the main chain, they use cryptographic proofs to verify the validity of every transaction. This provides instant finality once the proof is verified. Additionally, ZK - rollups can enhance privacy by concealing transaction details. Leading ZK - rollups include zkSync Era, StarkNet, and Polygon zkEVM. While they offer unique advantages, they may face some limitations in terms of smart contract compatibility.
Rollups in 2025
Optimistic Rollups in the Lead
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Arbitrum One: With the largest total value locked (TVL) among rollups, Arbitrum One has a thriving DeFi ecosystem and is renowned for its secure Layer 2 infrastructure. It recently upgraded to Stylus, which supports Rust smart contract development, enhancing audit efficiency.
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Optimism: Built on the modular OP Stack framework, Optimism powers multiple chains within the Superchain ecosystem. It has introduced features like an AI document assistant to improve the developer experience. It also shares its technology stack with Base and benefits from revenue sharing, contributing to its growth.
-
Base: Developed by Coinbase, Base offers seamless fiat - to - crypto onboarding, attracting a growing user base. It has witnessed significant user growth and is making waves in the rollup space.
ZK - Rollups Taking the Stage
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zkSync Era: Offering Ethereum Virtual Machine (EVM) compatibility, zkSync Era aims for a throughput of over 10,000 transactions per second (TPS) and has seen broad adoption among developers. Its technological advancements position it well in the ZK - rollup category.
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StarkNet: Utilizing zk - STARKs for enhanced speed, StarkNet supports the Cairo programming language. It is also notable for being the first L2 project planning to connect Bitcoin and Ethereum for settlement, expanding its use cases.
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Polygon zkEVM: Providing full Ethereum equivalence, Polygon zkEVM ensures a seamless experience for existing Ethereum decentralized applications (dApps). This compatibility makes it an attractive option for developers and users alike.
-
Linea: Known for its developer - friendly integration, low costs, and fast settlement times, Linea has carved a niche for itself in the ZK - rollup market, appealing to those seeking an efficient and accessible rollup solution.
For users interested in trading tokens related to these rollups, CoinCatch provides spot trading for major rollup projects, including recent listings such as BSquared Network (
B2).
Rollups: Solving the Blockchain Trilemma
Rollups have emerged as a solution to the blockchain trilemma, which posits that it is challenging to achieve scalability, security, and decentralization simultaneously. By processing thousands of transactions per second (compared to Ethereum's 15 TPS), rollups effectively address the bottleneck in transaction speed. Cost reduction is another significant achievement, with fees dropping by 90 - 99% compared to Layer 1 transactions due to the sharing of gas costs within batched transactions.
Network congestion is also managed more effectively as rollups offload transaction processing from the main chain, reducing competition for blockspace. Crucially, rollups inherit the security of their underlying blockchain while introducing their own innovations, creating an ideal scenario for both users and developers.
The Upsides and Downsides of Rollups
Key Advantages
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Scalability on Steroids: Rollups can handle upwards of 10,000 transactions per second, significantly boosting the capacity of blockchain networks.
-
Drastic Fee Reductions: Users can enjoy cost savings of 90 - 99% compared to mainnet transactions, making blockchain usage more affordable.
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Fast Finality: ZK - rollups offer instant finality, while optimistic rollups provide relatively quick finality, enhancing the user experience.
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Security Inheritance: They benefit from the robust security model of Ethereum, ensuring the safety of transactions.
-
Rich Ecosystem: Rollups support a wide range of applications, including DeFi, NFTs, gaming, and enterprise use cases, fostering innovation.
Notable Limitations
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Withdrawal Delays: Optimistic rollups require a 7 - day challenge period for withdrawals, which may inconvenience some users.
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Bridge Complexity: Moving assets between different layers can be a complex process, confusing new users.
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Centralization Risks: Many rollups initially launch with centralized sequencers, raising concerns about decentralization.
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Ecosystem Fragmentation: Liquidity and users are dispersed across multiple rollups, leading to fragmentation within the ecosystem.
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Smart Contract Constraints: Some ZK - rollups face compatibility restrictions when it comes to smart contracts, limiting their functionality.
Embarking on the Rollup Journey
The simplest way to experience rollups is through established platforms that support multiple networks. Start by setting up a wallet that is compatible with Layer 2 networks. Then, transfer small amounts of ETH or stablecoins to test different rollups. Many popular dApps now operate across multiple rollups, allowing users to compare factors such as speed, costs, and user experience.
For those interested in investing in the rollup ecosystem, 's platform offers various options. Users can trade rollup - native tokens, participate in the launch of rollup projects through launchpools, or hold tokens from major rollup networks like Arbitrum's ARB or Optimism's OP.
The Future of Rollups in Blockchain Scaling
Current trends suggest that rollups will continue to be at the heart of blockchain infrastructure. What began as experimental solutions has now evolved into production - ready platforms that handle billions in transaction volume. Major frameworks such as OP Stack, Arbitrum Orbit, Polygon CDK, and zkSync Hyperchain enable the customizable deployment of rollups, indicating that the ecosystem will continue to expand.
The competition between optimistic and ZK rollups is a catalyst for innovation. Optimistic rollups are improving their withdrawal mechanisms and modularity, while ZK - rollups are making strides in smart contract compatibility and proof generation efficiency. This healthy competition ultimately benefits users through enhanced features, lower costs, and improved security.
Conclusion
Rollups currently stand as the most promising solution for blockchain scaling. They offer substantial improvements in transaction speed and cost while maintaining security. Both optimistic and ZK - rollups have found their unique positions in the market, with optimistic rollups excelling in ecosystem compatibility and ZK - rollups leading in finality and privacy.
The technology is evolving at a rapid pace, with new frameworks, improved interoperability, and enhanced user experiences emerging regularly. For users looking to engage with this ecosystem, a balanced approach is to start with established rollups and gradually explore newer innovations. As the blockchain space continues to grow and adapt, rollups are set to play a pivotal role in shaping its future.
References:
Caldera. (2025, August 7).
Caldera Announces Partnership with EigenCloud to Integrate EigenDA V2. Cryptopotato.
https://cryptopotato.com/caldera-announces-partnership-with-eigencloud-to-integrate-eigenda-v2/
AInvest. (2025, August 6).
Mantle Integrates Succinct Prover Network to Enable ZK Verification.
https://www.ainvest.com/news/mantle-integrates-succinct-prover-network-enable-zk-verification-2508/
Cointelegraph. (n.d.).
What are blockchain rollups? Explained. Retrieved August 11, 2025, from
https://cointelegraph.com/explained/what-are-blockchain-rollups
Arbitrum Foundation. (n.d.).
Home. Retrieved August 11, 2025, from
https://arbitrum.foundation
CoinCatch Team
Disclaimer: Digital asset prices carry high market risk and price volatility. You should carefully consider your investment experience, financial situation, investment objectives, and risk tolerance. CoinCatch is not responsible for any losses that may occur. This article should not be considered financial advice.
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