Blockchain scalability has been a topic of discussion since the technology’s inception. After all, for a network to cater to the masses on a global scale, it must be able to process thousands, if not hundreds of thousands, of transactions per second.

Over the years, developers have proposed various scalability solutions for Ethereum, such as side chains or Plasma chains, eventually leading to the rollups many use today. But before getting into rollups, one must understand Ethereum scalability at large.

Early Scalability Concepts

Shortly after Vitalik Buterin presented the Ethereum network in 2014, scalability became a significant concern. The network often experienced congestion, resulting in elongated transaction times paired with high gas fees. It quickly became apparent that Ethereum needed a scaling solution to ensure its long-term viability.

Many Ethereum developers, including Buterin, suggested off-chain processing to lighten the load on the main chain. These layer-2 developments would exist on top of or alongside a mainnet, serving as a form of delegation.

From here, Buterin presented sharding, the idea that a small set of nodes can validate a set of transactions simultaneously.

Sharding consists of breaking a network into smaller subnetworks that validators maintain rather than having to manage the entire Ethereum network. However, shards do not inherit the mainchain’s security measures. When reporting back to the mainnet, shard chains include all sorts of transaction details for the main chain to process.

Shortly afterward, Buterin and Lightning Network co-founder Joseph Poon presented Plasma chains. Plasma chains are small blockchains (child chains) that can process transactions on their own, only sending information back to the mainchain at specific intervals. Plasma chains inherit the mainchain’s security protocols, which, in theory, makes them more secure.

While both solutions have shown promise, a few limitations prevented widespread adoption. For example, sharding results in smaller, more manageable networks, but ensuring their security can prove challenging. This problem is compounded by sharding’s complexity, which has hindered its adoption. Users are attempting to fix this through dank sharding.

Plasma chains' carried-over security protocols result in less detailed reports to the mainchain. This can lead to potential malicious activity, as the mainchain cannot verify transaction validity without said details.

The concepts introduced by sharding and Plasma chains were a perfect foundation for the next step in scalability: rollups.

What Is A Rollup?

A rollup is a layer-2 solution that aims to solve blockchain scalability issues by rolling up transactions into an off-chain process, validating them, and returning them to their layer-1 chain as one transaction to fill out the ledger.

By processing transactions off-chain, rollups free up the main chain’s bandwidth and contribute to lower gas fees, all while compressing transactions to minimize the space they inhabit. Because rollups are tied to their main chain, they inherit its security and consensus mechanisms, minimizing development time and ensuring anyone can utilize them.

Rollups are simpler than their predecessors by focusing on transactions rather than a whole new blockchain, providing a more accessible scalability solution than many out there. They can also support complex applications, as previous solutions might struggle with more than a simple token transfer.

How Does A Rollup Work?

There are multiple types of rollups, but the two most popular frameworks are ZK rollups and optimistic rollups.

ZK Rollups

ZK rollups (or zero-knowledge rollups) were among the first rollup solutions, utilizing zk-SNARKS technology that processes transactions while keeping information private.

These rollups bring transaction data off-chain via smart contract, where a rollup operator will process and execute them before submitting the information back to its layer-1 network. Operators are incentivized to properly validate transactions, similar to validators on the Ethereum mainnet, in that their earnings are slashed if they attempt to manipulate transactions.

Operators provide validity through proofs, which is where the zero-knowledge comes into play. Validity proofs are encrypted verification processes that prove a set of transactions is valid without revealing transaction information. Such a step keeps user information private while accounting for the open-source nature of a blockchain ledger.

Optimistic Rollups

Similar to ZK rollups, optimistic rollups process transactions off-chain only to submit them to the mainnet after validation.

The difference here is the optimistic moniker, in that transactions are assumed to be valid rather than requiring a validity proof. Instead, submitted transactions have a “challenge period” in which users can challenge a set of transactions they feel may be invalid. If a user wants to challenge a set, they’ll submit a fraud proof.

A fraud proof involves a user comparing the suspected set of transactions to their own transaction history to find any discrepancies. If discrepancies are found, the suspect is penalized. From there, the optimistic protocol will automatically process transactions properly. If no challenge is issued, the rollup’s transactions will be validated after a set period of time.

Both forms of rollup work similarly in that they process transactions off of the main chain, though the two serve slightly different purposes.

Optimistic rollups are faster than their ZK-based brethren, as their optimistic nature assumes transaction validity. These rollups might work better with Web 3 games and NFT marketplaces. As for ZK rollups, higher security platforms like decentralized finance (DeFi) lending protocols might be the best use case.

All of this said, rollups are certainly leading the charge as Ethereum scalability solutions. However, there’s still a level of complexity in implementing rollups of either kind. This is where Chaindrop comes into play.

Introducing Chaindrop

Chaindrop is a decentralized rollup-as-a-service platform that deploys rollups into your AWS infrastructure. We manage the entire installation process from start to finish and provide ongoing maintenance as needed.

Chaindrop supports optimistic rollups on both the Optimism and the Arbitrum tech stacks and allows for highly customizable implementations that can test Ethereum Improvement Protocols (EIPs) before they’re ready.

If you’re a layer-2 Ethereum startup looking for scalability solutions, visit our website and try out a demo.