Zk-rollup vs. Optimistic Rollup: Explained

Introduced in 2013 with its epoch-making whitepaper, Ethereum is now the second-largest cryptocurrency by market cap and has revolutionized blockchain technology with smart contracts and various decentralized applications. Despite its many improvements over Bitcoin, Ethereum still struggles to handle the ever-growing number of transactions that comes with its booming popularity. This is where rollups - one of Ethereum’s Layer 2 scaling solutions come in.

What are rollups?

Rollups are a type of Layer 2 scaling solution for blockchains like Ethereum. They work by bundling (rolling up) multiple transactions together and carrying out all the computation elsewhere, reducing the number of transactions processed on the main chain. One such bundle of transactions is regarded as a single transaction by the main chain. This drastically increases the network’s throughput (currently around 15 transactions per second for Ethereum Mainnet) and cuts gas fees to only a fraction of the original.

There are two major factions competing in providing rollup solutions for Ethereum: zk-rollup and optimistic rollup.

What are zk-rollups?

Zk-rollups, short for zero-knowledge rollups, are rollup solutions that leverage zero-knowledge proof to roll up transactions and execute all the computation off-chain.

Zk-rollups have made great progress in both security and flexibility. The validity of all transactions can be proved without revealing any information about them, ensuring privacy and security for all of them. Since all the computation is carried out off-chain, zk-rollups can also support complex smart contracts and other computation-demanding advanced features. This makes them ideal for decentralized exchanges and other DeFi applications.

There are currently several major players in the zk-rollup faction:

Polygon is developing its zk-rollup solution on its own zkEVM and announced that its zkEVM Mainnet Beta would be live on March 27. Their zkEVM will be EVM-equivalent, which means developers can copy and paste their code from Ethereum and call it a day.

Loopring is the first scalable DEX protocol built with zkRollup for Ethereum. Their layer 2 solution is capable of settling over 2,000 trades on layer 1. They also built a DEX on top of their layer 2 with a State Merkle Tree, protecting every ether for their traders.

ZkSync, a direct competitor to Polygon, deployed its first product, zkSync 1.0, almost two years ago and rebranded its zkSync 2.0 to zkSync Era last month.

Other notable players in and outside Ethereum include Scroll, who launched their zkRollup Alpha Testnet on Goerli just last month; Mina, a layer 1 zero knowledge solution with a minuscule blockchain size compared to Bitcoin or Ethereum. You can dive into Bitget’s zero-knowledge zone to discover more exciting projects.

What are Optimistic rollups?

Optimistic rollup is another type of Layer 2 scaling solution for blockchains like Ethereum. Unlike zk-rollup, optimistic rollup assumes that all transactions are valid unless proven otherwise. In the event of a dispute, that is, a proof of invalidity was submitted, said transaction will be reverted on the main chain.

Needless to say, this saves heaps of time and energy. As a result, optimistic rollups require much less computation to validate transactions and can process transactions much faster than zk-rollup.

There are two behemoths in the optimistic rollup faction:

Rebranded from ‘Plasma’, the aptly-named Optimism holds the 6th place in total volume locked (TVL) at the time of writing. Optimism introduced its EVM equivalence upgrade in 2021, allowing developers to integrate everything they’ve built on Ethereum at almost 0 costs. Optimism processes all transactions in one bundle on-chain and allows anyone to submit proof of invalidity. If such proof is verified, any transaction in question will be reverted.

Another major player, boasting the 4th largest TVL of all chains at the time of writing, is Arbitrum. Their Arbitrum Virtual Machin (AVM) supports all EVM compiled languages but is less dependent on EVM. Dispute resolution also works slightly differently on Arbitrum. With its multi-round fraud-proof mechanism, Arbitrum adopts a back-and-forth fraud-proof process executed off-chain. This more advanced system allows Arbitrum to run more efficiently and at a lower cost.

Optimistic rollups offer a less computation-intensive solution to Layer 1 scaling. Both Optimism and Arbitrum have made exciting achievements and expanded Layer 2’s horizon immensely. Check out our Optimism zone and Arbitrum zone for the latest projects from both factions, hand-picked by Bitget!

Closing thoughts

Both zk-rollup and optimistic rollup are promising scaling solutions for Ethereum. Zk-rollup solutions are generally more secure but require more computational power and, therefore, slower than optimistic rollups. Optimistic rollup solutions, on the other hand, requires less computational power at the cost of security. Even though both have seen several major breakthroughs, they are still, technically, just out of their infancy. Rollup solutions, even the crypto industry at large, are still in their early days. Other scaling solutions will emerge, and more progress will be made in the world of crypto. Stay tuned with us at Bitget Academy as we take you through some of the latest and hottest developments in the world of crypto.

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