Ethereum, the leading smart contract platform, has been on a quest to overcome its scalability challenges and enhance its transaction throughput. In the pursuit of scalability, various layer 2 scaling solutions have emerged, and one of the most promising among them is Optimistic Rollups. This innovative technology aims to revolutionize the Ethereum network by offering improved scalability and reduced transaction fees.

Understanding Optimistic Rollups:

Optimistic Rollups are a type of layer 2 scaling solution that builds on the Ethereum mainnet while processing most transactions off-chain. This is achieved by maintaining a separate chain, known as the rollup chain, where transactions are executed and validated. The name "Optimistic" reflects the optimistic assumption that transactions are valid unless proven otherwise, minimizing the need for on-chain verification.

How Optimistic Rollups Work:

The process begins with users conducting transactions on the rollup chain. Instead of waiting for the Ethereum mainnet to validate each transaction individually, Optimistic Rollups utilize a technique called fraud proofs. Participants on the rollup chain can submit proofs to the Ethereum mainnet only if they detect fraudulent activities on the rollup chain. This ensures the security of the system without the mainnet needing to verify every transaction.