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Blockchain rollups explained

Rollups bundle many transactions and post compressed data or proofs to a base blockchain.

How it works

Optimistic rollups rely on challenge periods, while zero-knowledge rollups use validity proofs. Both reduce the amount of base-layer work required per transaction.

What to check

Check data availability, proof system, withdrawal timing and upgrade controls. The word rollup alone does not specify the entire security model.

  • Identify rollup type
  • Check data availability
  • Understand withdrawal and upgrade rules

Limits and risks

Users can face bridge, sequencer and contract risk even if the rollup ultimately settles to a secure base layer.

Primary sources

Bitcoin Developer Reference↗Ethereum developer documentation↗FATF: Virtual Assets↗

General information only. Investment products can lose value, and terms, fees and regulation can change.