🪄Optimistic Rollups

These rollup solutions assume all transactions are valid – therefore optimistic. Thus, network operators create blocks containing the transactions occurring on the network and roll them up to the layer above. Layer 2s roll-up transactions to layer 1s, and layer 3s roll-up transactions to layer 2s. Regardless, a layer 3 still benefits from the security of the layer 1 that the layer 2 is associated with.

Optimistic rollups come with a challenge period, usually seven days, during which network validators can issue fraud proofs to transactions they feel are invalid. Since these rollups send transaction bundles by assuming all the transactions within them are valid, fraud proofs are necessary to maintain network integrity.

If on-chain computations reveal that the transaction was fraudulent, the states of the wallets involved in said transaction get reversed. The operator sending those transactions to the higher layer is penalized and the validator issuing the fraud proof is rewarded.

The advantage of using optimistic rollups is that users can execute transactions instantaneously on the rollup network. However, they cannot port their assets to the layer 1 network until the challenge period ends.