What are rollups and how will they improve Ethereum's $ETH transaction speed
Rollups are a Layer 2 scaling solution for Ethereum that can significantly improve transaction speed and throughput:
1. Offloading Computation: Rollups move the computation and storage of transactions off the main Ethereum blockchain (Layer 1) onto a separate Layer 2 network. This reduces the computational load on the Ethereum mainnet.
2. Batching Transactions: Rollups bundle hundreds or thousands of transactions into a single batch, which is then submitted to the Ethereum mainnet. This reduces the amount of data that needs to be stored on the main chain.
3. Two Main Types:
- Optimistic Rollups: Assume all transactions are valid by default, but allow for a "challenge period" where users can dispute transactions. This reduces the computational overhead.
- Zero-Knowledge (ZK) Rollups: Use cryptographic proofs to verify the validity of transaction batches off-chain, without the need for a challenge period.
4. Improved Throughput: By offloading computation and batching transactions, rollups can achieve much higher transaction throughput compared to the Ethereum mainnet alone. Estimates suggest rollups could scale Ethereum's transactions per second from 15-30 TPS to over 2,000 TPS.
5. Lower Fees: The reduced computational load and data requirements of rollups also lead to lower transaction fees for users compared to executing transactions directly on the Ethereum mainnet.
Rollups are a crucial scaling solution for Ethereum that can dramatically improve transaction speed, throughput, and cost-efficiency, without compromising the underlying security and decentralization of the Ethereum network. They are seen as a key component in Ethereum's roadmap to scalability.