Rollups are a way to make blockchains faster and cheaper to use. They do this by processing a lot of transactions off the main blockchain (off-chain) and then "rolling up" the results into a single piece of data that gets sent back to the main blockchain (on-chain).

We can think of it like: Instead of everyone doing their work on the main blockchain (which is slow and expensive), people do most of the work somewhere else (off-chain), and then just send a summary of what they did back to the main blockchain.

Why Do We Need Rollups?#

As more people use the blockchain, it gets slower and more expensive to use. This is because every transaction has to be processed by everyone on the network, which takes time and costs money (known as “gas fees”). This problem is called scalability — the ability of the blockchain to handle more and more transactions without slowing down or getting too expensive.

Rollups offer a solution by reducing the load on the main blockchain. Instead of processing every transaction directly on the blockchain, rollups handle multiple transactions off-chain and then post only the essential information on-chain. This reduces the number of tasks the blockchain has to process, making the system faster and more affordable.

Layer 2 (L2) Scaling Solutions#

To solve the scalability problem, developers came up with something called Layer 2 solutions.

Layer 1 (L1) is the main blockchain, where all transactions are traditionally processed. It’s like the foundation of a building, providing the base for all operations.
Layer 2 (L2) sits on top of Layer 1 and acts as an additional processing layer. It offloads a significant amount of work from Layer 1 by handling transactions off-chain and then sending a summarized result back to Layer 1.