Optimistic Rollups have emerged as a leading Layer 2 scaling solution for Ethereum, offering the promise of increased transaction throughput, lower fees, and compatibility with existing infrastructure. But how do they work under the hood?
Before diving into the technical details, let’s briefly review what Optimistic Rollups are. They are a Layer 2 scaling solution that bundles multiple transactions together into a single “rollup” and moves the computation and storage off the main Ethereum blockchain. This reduces network congestion and transaction fees while maintaining compatibility with Ethereum’s existing infrastructure.
To understand how Optimistic Rollups work, it’s essential to be familiar with the core components.
The aggregator is a key player in the Optimistic Rollup process. It is responsible for bundling multiple transactions together into a single rollup and submitting it to the Ethereum blockchain. The aggregator also generates a cryptographic proof, known as a “fraud proof,” to ensure the rollup’s validity.
Fraud proofs are a critical security mechanism in Optimistic Rollups. They allow anyone to challenge the validity of a rollup by providing evidence that the off-chain computations are incorrect. If a successful challenge is made, the rollup is reverted, and the aggregator is penalized.
Optimistic rollup smart contracts are deployed on the Ethereum blockchain and manage the rollup submission, verification, and withdrawal processes. They ensure that the rollups are correctly processed and that funds can be securely withdrawn back to the main Ethereum blockchain.
Now that we understand the core components, let’s walk through the Optimistic Rollup process step-by-step.
The process begins when users submit transactions to the aggregator. The aggregator collects these transactions and bundles them together into a single rollup. This bundling process involves creating a Merkle tree of the transactions, which allows for efficient cryptographic proofs.
Once the rollup is created, the aggregator performs the necessary off-chain computations. This includes executing smart contract functions, updating the rollup’s state, and generating a new state root. The new state root represents the updated state of the rollup after the transactions have been processed.
With the off-chain computations complete, the aggregator generates a fraud proof for the rollup. This proof includes the new state root, a Merkle proof for each transaction in the rollup, and any additional data required to verify the rollup’s validity.