Optimistic rollup is protocol designed to boost transaction output by grouping several transactions into batches that are handled off-chain. Once processed, the transaction data is logged on the main chain using data compression methods that reduce costs and enhance speed. Ethereum states that optimistic rollups can enhance scalability by a factor of 10 to 100.
How Optimistic Rollup Works
By default, transactions are considered valid to boost efficiency. You might be thinking if this puts security at risk just to speed up transaction processing. But don’t worry, optimistic rollups have a fraud-proving system in place, along with a dispute-resolution phase called a ‘challenge period.’ During this time, anyone keeping an eye on the rollup can raise a challenge to check if the transaction was processed correctly using a fraud proof.
If any errors are found in that batch, the rollup protocol will fix them by re-running the incorrect transaction(s) and updating the block. Those who approve faulty transactions for execution will face penalties.
Cons of Optimistic Rollup
Even though there’s no transaction validation process, zk-rollups lack a challenge period, which means transactions take longer to finalize.
When it comes to finality, chains using optimistic rollups have a lower rate compared to zk-rollups. Finality refers to the time a user has to wait for a solid assurance that their transactions won’t be reversed or changed. Withdrawals on optimistic rollups face delays since the challenge period has to end before the funds can be released. On the other hand, withdrawals from zk-rollups are processed immediately once the smart contract confirms the validity proof.
Some folks also think that optimistic rollups are not as efficient as zk-rollups. With optimistic rollups, all transaction data needs to be posted on-chain to complete transactions. In contrast, zk-rollups only require validity proofs to be on-chain.