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Onchain Economics

Rollup

An L2 scaling solution that executes transactions off-chain but posts transaction data or proofs to L1 for security.

In-Depth Explanation

Rollups come in two types: Optimistic (assume valid, allow fraud proofs) and ZK (use cryptographic proofs). Both inherit L1 security while offering lower fees. Rollups must post data to L1, which creates the L2's main cost. Competition among rollups drives fees toward cost of L1 data availability.

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