> ## Documentation Index
> Fetch the complete documentation index at: https://docs.theblockchainlibrary.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Optimistic Rollup

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

# Optimistic Rollup

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

## Definition

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

## Why it matters

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

## 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.

## Real-world example

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

## Advantages

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

## Limitations

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

## 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.

## Related knowledge

* [Data Availability](/generated/v2/glossary/data-availability) — term
* [Layer 2](/categories/layer-2) — term
* [Rollup](/generated/v2/glossary/rollup) — term
* [Throughput](/generated/v2/glossary/throughput) — term

***

**Canonical knowledge ID:** `glossary:optimistic-rollup`