Introduction: Minimalist Explanation of Optimistic Rollup

Editor's Note: This article comes fromEthereum enthusiasts (ID: ethfans)Editor's Note: This article comes from

Ethereum enthusiasts (ID: ethfans)

In this article, we will introduce the basics of ORU in an easy-to-understand manner. If you want to go into deep technical details, check out this article (Chinese translation）。 

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Chinese translation

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• ORUs have many desirable characteristics. Among all blockchain scalability technologies, its characteristics are unparalleled. A well-designed ORU system will have the following characteristics:

• Trust free. Unlike traditional sidechain technologies, ORU is trust-free (or more professionally, trust-minimized). You can withdraw your funds from Rollup at any time without trusting that the vast majority of block producers on ORU are honest.

• License-free. Unlike Plasma, ORU is permission-free. Anyone can become a block producer on ORU, because all block data on rollup is published on Ethereum and can be obtained from Ethereum. How the next leader is chosen is an implementation-specific problem, not a fundamental limitation.

• Free hosting. As mentioned above, because ORU is both trustless and permissionless, you can withdraw your funds at any time, and no one can stop you. Therefore, ORU is hosting-free.

• Expressive. Unlike ZK rollup, ORU (in theory and practice) is highly expressive. Whether it's a Bitcoin-like UTXO payment, or a full-fledged EVM-compatible implementation, ORU can handle it.

• Open to participation. Unlike payment channels, ORU supports smart contracts and is open to everyone like Uniswap.

• Anti-chain congestion. Unlike payment channels and Plasma, ORU can resist on-chain congestion because ORU's fraud proof is at the block level, rather than a closing mechanism like payment channels, or an exit mechanism like Plasma.

No new cryptography required. Unlike ZK rollup, ORU does not require any new cryptography.

Fast (not instant) finality. Unlike ZK rollup, ORU does not need to generate proofs, so ORU blocks can be published to Ethereum immediately. Since valid ORU blocks cannot be rolled back, once these blocks are published on Ethereum, it is possible to achieve Ethereum-like finality.

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One of the earliest moves to enhance Bitcoin's scalability was sidechains. The sidechain is a blockchain that runs together with the parent chain, but has different characteristics: shorter block generation time, larger block size, and more expressive smart contracts. However, normal sidechains have a fatal flaw: if the vast majority of miners/validators on a sidechain are dishonest, user funds can be stolen.

The culmination of these studies is what we know today as Optimistic Rollup. In June 2019, the Minimal Viable Merger Consensus described this technique for the first time. Since then, the Ethereum community has strongly supported ORU as a scalability solution for Ethereum-style smart contract execution without waiting for Serenity Phase 2.

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How Optimistic Rollups Work

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• - Optimistic Rollup Visualization -

• As a trust-minimized two-way pegged sidechain (in other words, no funds can be stolen even if every validator on the sidechain is dishonest), ORU is surprisingly simple in the way it works (of course, mine "Principles" are explained in more detail).

The aggregator collects the transactions on the rollup, packs them into a rollup block, and sends the rollup block to Ethereum (or another Ethereum-like block) along with a deposit (we will explain why a deposit is required shortly) chain, on which smart contracts with a large number of states are running). This rollup block is not translated or executed - the smart contract just records the block hash, and keeps track of the hashes of all rollup blocks. The rollup blocks themselves are not stored in the smart contract, but anyone can find them in Ethereum's transaction history.

If no one submits a fraud proof by the end of the challenge period, the contract finalizes the rollup block, allowing the aggregator to get back the deposit. When the user withdraws money from the rollup chain to the main chain, he needs to initiate a withdrawal request on the rollup chain, and the money can only be withdrawn after the contract finalizes the rollup block.

That's it! ORU seems very simple, why did it take so long to have a specific solution and implementation? That's because the design space for these technologies is virtually limitless, and "to find the answers, you have to look in the right direction."

Note that the above describes how ORU works on blockchains such as Ethereum through on-chain execution. ORU can also be implemented as an application with client-side execution functions on projects such as LazyLedger. In the latter case, fraud proofs will be propagated through the peer-to-peer network without being posted to the smart contract.

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• By default, due to the inherent latency of interacting with smart contracts on Ethereum, the challenge period for fraud proofs is long (up to weeks), and withdrawals are delayed as a result. Client-side execution can drastically reduce the challenge period. However, we can easily solve the delay problem by simply letting liquidity providers provide withdrawal services through atomic swaps and charging a small fee. In fact, this is a new DeFi element: Liquidity providers can use their liquidity to earn income by providing services.

in conclusion

The throughput of the ORU is capped at the data availability throughput of Ethereum. In this case, we can think of ORUs as pseudo-shards. Multiple ORUs can run in parallel on the same data availability layer. Fortunately, data availability is easier to scale than execution. Projects like LazyLedger are optimized to provide a highly scalable common data availability layer, allowing all rollup projects to reach their full potential.