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Optimistic Rollup

A Layer-2 system that assumes state transitions are valid unless challenged with a fraud proof.

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Definition

A Layer-2 system that assumes state transitions are valid unless challenged with a fraud proof.

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Why it matters

Scaling concepts explain how blockchain systems increase capacity while balancing security and decentralization.

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How it works

Transactions are collected by a sequencer and published to Ethereum as call data. For a set time, anyone can submit a ‘fraud proof’ if they notice an error in the batch. If challenged, the protocol executes the specific transaction on-chain to determine the correct state, and the incorrect entry is discarded.

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Real-world example

Optimism and Arbitrum are both major implementations of Optimistic Rollups on the Ethereum network.

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Advantages

  • High throughput and low fees
  • Security rooted in Ethereum
  • Relatively simple to implement

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Limitations

  • Significant wait times for fund withdrawals
  • Relies on honest participants to challenge fraud
  • Centralized sequencers create single points of failure

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Common misconceptions

  • Many believe rollups are insecure because they are off-chain; they are actually as secure as the main chain if a validator is active.
  • Some think transactions are instant, but they are only finalized on mainnet after the challenge period.
Canonical knowledge ID: glossary:optimistic-rollup