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An optimistic rollup is a type of rollup that assumes all transactions are valid by default. It executes transactions off-chain, batches multiple transactions into a single bundle, and compresses the data for submission to the Layer 1 blockchain. Unlike ZK-rollups, which use zero-knowledge proofs to verify transactions, optimistic rollups only verify transactions at the Layer 1 level if suspicious activity is detected.
This honesty assumption and elimination of default verification at Layer 1 simplify computation processes, speeding up transactions and reducing costs. However, this also increases the theoretical risk of sequencers (actors responsible for executing transactions) performing erroneous or fraudulent transactions, which could undermine the network’s integrity.
To prevent such detrimental actions, optimistic rollups enforce a timeframe known as the challenge period. During this period, actors called disputers review the transactions and flag any suspicious ones by submitting evidence called fraud proofs.
Once a fraud proof is submitted, it is evaluated at Layer 1, or the settlement layer, which determines the transaction’s validity based on the evidence provided. If Layer 1 confirms the disputer’s claim, finding the sequencer’s action improper, the sequencer is penalized by having their bond slashed. This mechanism, along with the challenge period, is crucial for maintaining the integrity of optimistic rollup networks.
The fraud-proof security model of optimistic rollups requires fewer computational resources compared to ZK-rollups, making them more straightforward to develop. However, the challenge period introduces latency in transaction finality, as users must wait to ensure no disputes arise.
Examples of optimistic rollup networks include Arbitrum and Optimism. In addition to their own rollup technology, they offer Rollup-as-a-Service (RaaS) solutions, Arbitrum Orbit and OP Stack respectively, which enable the easy creation of optimistic rollups as Layer 2 on Layer 1 or Layer 2 on Layer 3. Optimistic rollups such as Base and Mode are developed using these RaaS solutions.
Optimistic rollups inspired the invention of optimistic bridges, which handle bridge transactions with a similar assumption of honesty.