Layer 2 and rollups
Do the work elsewhere, post the proof here. It is how throughput increased by orders of magnitude without every node doing more.
If every node must process every transaction, capacity is limited by the weakest node you want to keep. Raise throughput and you raise the cost of participating, which concentrates the network. That is the constraint layer 2 exists to escape.
The rollup idea
- Transactions are executed on a separate system, cheaply and quickly.
- The results, compressed, are posted back to the main chain along with enough data for anyone to reconstruct what happened.
- The main chain does not re-execute them; it guarantees the data was published and settles disputes.
The main chain becomes the court and the notice board rather than the processor, which is a far cheaper job per transaction.
The two kinds
- Optimistic rollups. Assume the posted result is correct, and allow anyone to challenge it during a dispute window by submitting a fraud proof. Simple and compatible with existing contracts. The cost is that withdrawals to the main chain wait out the challenge period — commonly about a week.
- Zero-knowledge rollups. Post a cryptographic proof that the computation was performed correctly. Verification is fast and no dispute period is needed, so withdrawals are quick. The cost is substantially greater complexity, and generating proofs is computationally heavy.
A rollup is only as trustworthy as the guarantee that its transaction data was actually published. If the operator can withhold it, nobody can prove fraud or reconstruct balances, and users cannot exit without the operator's cooperation. This is why Ethereum's recent upgrades have been about cheap, verifiable data space rather than faster execution — see the upgrades.
The trust assumptions that remain
Marketing tends to present rollups as inheriting the security of the chain beneath them. That is the design goal and it is not uniformly achieved today.
- Centralised sequencers. Most rollups have a single operator ordering transactions. It generally cannot steal, and it can censor, reorder for profit, or go offline.
- Upgrade keys. Many are upgradeable by a multi-signature wallet held by the development team. Whoever holds those keys can in principle change the rules governing user funds.
- Proof maturity. Some systems described as rollups have not yet enabled the fraud or validity proofs their security model depends on.
Independent trackers publish stage ratings for exactly this reason, and the ratings vary widely between systems that market themselves identically.
Why it matters to an ordinary user
Fees are a small fraction of the main chain's and confirmation is faster. The practical cautions are mundane: sending to the wrong network is a common and often unrecoverable mistake, bridging between layers has its own risks (see bridges), and withdrawal delays on optimistic systems are real and are not a malfunction.
The broader pattern
Bitcoin's Lightning and Ethereum's rollups are different implementations of one strategy: keep the expensive, maximally-verified layer for settlement and build cheap layers above it. This is now the dominant approach to scaling across the field, and it mirrors how conventional finance separates its wholesale settlement layer from the retail payment networks sitting on top of it.