Optimistic rollup

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An optimistic rollup is a Layer 2 scaling solution designed to increase the transaction throughput and reduce fees on a base blockchain, often referred to as Layer 1 (like Ethereum). The core idea is to process the majority of transactions off the main chain, thereby alleviating congestion on Layer 1. These rollups are termed “optimistic” because they assume that all transactions bundled and submitted to the main chain are valid by default. This approach significantly speeds up processing and lowers costs.

Instead of executing each transaction individually on Layer 1, an optimistic rollup bundles many transactions together into a single batch and submits a compressed summary of this batch to the main chain. While transactions are assumed valid, there’s a “challenge period” during which anyone can dispute a potentially fraudulent transaction by submitting a “fraud proof.” If a fraud proof is successfully verified, the incorrect transaction (and any subsequent transactions in that batch) are reverted, and the party that submitted the fraudulent transaction is typically penalized.

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