Original author:Alex Beckett

Compilation of the original text: The Way of DeFi

Original author:

Optimistic Rollup

Compilation of the original text: The Way of DeFi

Rollups have come a long way since their debut in 2019. We have seen the formation of two main contender camps, as well as various other promising Rollup theoretical designs involving many hybrid evolutions. Halfway through 2022, let's take a look at the current development of the Rollup ecosystem.

Since general Optimistic Rollups have significantly longer mainnet live usage than their zk-rollup counterparts, they get the vast majority of rollup applications. The two leading Optimistic Rollup apps are Arbitrum and Optimism, and have been for some time.

As measured by TVL, Arbitrum ranks highest at $2.4 billion. Despite being live on mainnet for the better part of a year, the system is still in training testing. Currently, Offchain Labs, the entity developing Arbitrum, operates a single centralized orderer. While interactive fraud proofs are real-time, individual orderers are the only whitelisted entities that can submit disputes to generate fraud proofs. From a user perspective, they still have to have a lot of trust in the system, despite the expected gradual move towards decentralization.

Arbitrum's next protocol upgrade, Nitro, is already live on the devnet and will overhaul the existing architecture, replacing the custom Arbitrum virtual machine with a WASM-Geth combination. Arbitrum's interactive fraud proofs will run on WASM, and the node software will have a Geth-equivalent codebase, with some Rollup-specific optimizations. All in all, Nitro will bring significant optimizations, higher performance, and better EVM compatibility.

Optimism is the second largest Optimistic Rollup and ranks third among all Rollups by TVL at $469 million. The case of Optimism PBC is similar to that of Arbitrum, with only one centralized sorter. However, Optimism PBC has found a way to provide positive benefits to the network by using profits earned from orderers to retroactively fund public goods. In the first round, a total of US$1 million was donated to 58 public welfare projects. If there is any way to have a positive impact in the case of centralized ordering, then this is a path to take.

Currently, Optimism lacks fraud proofs, but expects gradual decentralization and necessary security upgrades - which are also standard. However, almost all Rollups have immediate or delayed upgrade capabilities, so the security of a Rollup ultimately depends on upgrading multisig.

An upcoming Bedrock upgrade will change Optimism's architecture to something similar to Arbitrium's. The current Optimism virtual machine will be replaced by a MIPS-Geth combination, where the node software is equivalent to a regular Ethereum Geth node - this is known as the Ethereum equivalent. Interactive fraud proofs will also be available as an additional feature, an upgrade to the original non-interactive fraud proofs. In general, Bedrock will be a major step forward for Optimism, adding many features and enhancements to the system.

By the way, Optimism is also a big step towards experimenting with non-plutocratic governance. Decision making will be made between two houses, the Token House and the Citizen House. The Token House will use common tokens to vote, while the Citizen House will use the one-citizen-one-vote system. In light of this, the most difficult hurdle in such a system may be finding the best way to assign citizenship to users while minimizing the possibility of Sybil attacks. If users can acquire multiple citizenships, they can effectively exert more influence on governance than ordinary citizens. Optimism notes that they will use non-transferable NFTs to represent citizenship, but the threat of individuals exchanging private keys for more votes remains.

Fuel is another notable player in the Optimsitic Rollup space, taking a very different approach than Arbitrum and Optimism. Fuel Labs is building a custom VM for Fuel V2 using a rust-based programming language. While EVM-compatible Rollups are particularly useful for onboarding the Ethereum development ecosystem to Rollups, custom VMs are where the greatest performance gains can be achieved since they do not have to adhere to existing standards.

• Probably my favorite part of Fuel V2 is the parallel transaction processing, mainly because once there is enough data capacity, the throughput bottleneck becomes execution. Once the throughput bottleneck shifts to execution, a Rollup that implements parallel processing will have an advantage over a Rollup that does not. Notably, Fuel V1 was the first mainnet Optimistic Rollup to go live on Ethereum, and remains the only Rollup with permissionless orderers and fraudulent disputes and no upgraded multisig.

• In its current form, Optimistic Rollups are far superior to zk-rollups. Two main considerations revolve around:

Zk-rollup

Full, unlimited composability: zk-rollups have inherent difficulties in composing smart contracts on zk circuits. The only zk-rollup that is generally composable is StarkNet, which currently has permissioned smart contract deployments and places an upper limit on the amount of TVL a bridge can support. All other zk-rollups are application-specific or only token transfers.

EVM Compatibility: zk circuits have inherent compatibility issues with certain types of cryptography that are standard in the EVM, making zkEVM an extremely challenging task. Optimistic Rollup has been around for some time on mainnet with EVM compatibility, and upgrades are expected to further achieve equivalence.

Starknet is currently the only general-purpose, composable zk-rollup that is live on the mainnet. However, the system is still in early alpha mode with various limitations. The bridge between StarkNet and Ethereum is limited to a certain amount of TVL, which has gradually increased since launch. Smart contract deployments on StarkNet are also whitelisted. I think this is mostly to reduce the risk of smart-connect errors, as there may not be enough (any?) auditors to audit all the Cairo contracts a developer wants to deploy - it makes sense that StarkWare will fill this role for the time being. Auditability is one of the common downsides of new custom languages, and the complexity of zk systems only exacerbates this. Ultimately, StarkNet is currently in the lead.testnetZkSync is another major "zk-rollup" contender and has been using zkSync 2.0 for some time to build a general purpose zk-rollup. recent

testnet

Marks the first instance of zkEVM on a live testnet. However, with the addition of zkPorter, zkSync 2.0 is more than just a Rollup. This will be a Volition that will enable users to choose between zkPorter and Ethereum to publish their transaction data. While Ethereum is upgrading data throughput using danksharding, Volition is a nice middle ground that gives users options within the safety of transaction costs.

While most zk-rollups prioritize scalability, privacy is another important aspect that zk-rollups can enable. Aztec is currently leading the way in the privacy space with their private token transfer zk-rollup (zk.money) - they are the only privacy-focused Ethereum rollup that I know of. Aztec will also launch its next iteration, Aztec connect, in about next week, enabling users to privately access Ethereum DeFi. This is a big improvement over using something like Tornado Cash, where privacy is only achieved by obfuscating rather than blocking transactions directly - hope no one links your Tornado wallet or your privacy is gone up.

Zk-rollups are already complex, adding privacy makes the problem even more complex. It is possible that zk-rollups will never reach the state of privately composable smart contracts. Because of this, privacy may emerge through application-specific chains, either through zk-rollup or validation on top of zk-rollup.

Various other zk-rollups also exist in production, including various projects for Scroll and Polygon. A big difference with zk-rollups is the use of a custom VM or zkEVM execution environment. Its advantages and disadvantages are similar to Optimistic Rollup. However, zk-rollups have more inherent complexity when implementing zkEVM. Thus, a very strong case can be made for going the route of using custom VMs and languages ​​such as StarkNet and Cairo.

Sovereign Rollup

The last two in the Rollup category are currently theoretical, although under active development. A Sovereign Rollup differs from a typical Rollup in that it has a fork choice rule that allows it to fork independently of its base layer. Instead, a regular rollup delegates its fork choice to its settlement layer — which has to be the settlement layer because it needs to ensure the correctness of the rollup.

Sovereign rollups will be most prominent on Data Availability (DA) layers such as Celestia, where the DA layer cannot ensure the correctness of Rollup transactions. Because of this, Rollups for things like Celestia are sovereign by default, as they must ensure their own transactional correctness through fraud/validity proofs and fork choice. This should not be mistaken for the consensus provided by Celestia for agreeing on transaction ordering.

For an optimistic sovereign Rollup, it is assumed that transactions are correct, so Rollup nodes only need to download block data from Celestia. Zk - Sovereign rollups ensure correctness through validity proofs that will be distributed among rollup nodes via a p2p network.

To me, the importance of sovereign rollups is their ability to fork, which allows these rollups to be truly independent of their base layer. Essentially, Sovereign Rollups regain social recourse mechanisms.

Settlement Rollup

A Settlement Rollup is a Sovereign Rollup built for settlement. Importantly, the settlement layer is any blockchain with two-way trust-minimized bridges and rollups. The bridge enables tokens to be transferred bi-directionally between the Rollup layer and the settlement layer. Trust minimization is a property of bridges where communication relies only on an honest few assumptions proven by validating data availability and fraud/validity.

Validum

As with any settlement layer, the purpose of a settlement rollup is to provide an environment for "rollups" to verify proofs, resolve disputes, and bridge tokens. However, "Rollups" above settlement are technically hybrid in that they use off-chain DA through the data availability layer that the settlement rollup resides in - making them a kind of validum or a kind of Optimistic validium.

Hybrid Rollup

StarkEx uses a Data Availability Committee (DAC) composed of a group of trusted parties to provide data availability for StarkEx verification. While delegating data availability to permissioned committees reduces security, it enables StarkEx validation to provide cheaper transactions than zk-rollups. The cost reduction is possible because posting data to Ethereum is expensive - it is also the main variable cost leading to Rollup transaction fees.

Using an external data availability layer can alleviate some of the security concerns of authentication with DAC. The main increase in security comes from the cryptoeconomic security provided by the blockchain, where nodes can be imprisoned and punished for dishonest activity. A Validium implementation of this is an interesting addition to the cost-safety trade-off within the scope of "Rollup".Celestia

Optimistic Validium

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Volition

Like validation, an Optimistic validium is a hybrid Optimistic Rollup where transaction data is published off-chain. There's no general consensus on what this particular hybrid should be called, so here's what I'll say.

Metis is currently the only Optimistic validium that shifts from an Optimistic Rollup model to lower transaction fees at the expense of security. Optimistic validity has weaker security guarantees against its validium counterparts because data availability is required to generate fraud proofs and successfully resolve disputes. Fraud proofs cannot prove fraud if a dispute occurs and the data for the relevant state transition is not available. Therefore, if off-chain data availability providers fail to provide data, funds may be stolen from Optimistic validium.

Adamantium

By combining zk-rollup and validium, Volition is a hybrid that gives users the choice of on-chain or off-chain data availability. Choices are made at the level of individual transactions, where off-chain data represents cheaper fees and less security, while on-chain data results in higher fees and greater security. This gives users the freedom of choice provided by a single system, rather than explicitly looking for a chain that suits the user's cost-safety preferences.

Enshrined rollup

Adamantium is a verification in which everyone personally provides the network with their own data availability. Individuals' transaction data is stored by them personally (off-chain), and they must remain online to attest to data availability for each block. If the user is offline or fails to attest, then their funds are automatically withdrawn on-chain to the settlement layer. While StarkWare came up with the adamantium design, there isn't any clear indication that StarkWare or any team is working on it. Ultimately, if it does get developed, it could become a niche option for users or entities who want more personal control over their security, which is why adamantium users are called "power users".

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