Optimistic Rollup

Layer 1 vs. Layer 2

Before explaining an Optimistic Rollup, it's worth defining a Layer 1. Layer 1s or L1s, as they’re commonly termed, are a reference to a smart contract blockchain network such as Ethereum or Binance Smart Chain. The L1 is the base layer for security; this is where all transactions take place, and each transaction is approved or denied by the Blockchains consensus mechanism such as Proof of Work (PoW) or Proof of Stake (PoS).
Layer 2s or L2s refers to a scaling solution for L1s, whereby transactions are processed on a parallel network by batching user transactions and sending them to the L1. In doing so, a L2 removes congestion from the L1 base layer so it can focus on the security of the network. L2 solutions currently come in the form of Optimistic rollups and Zero-Knowledge rollups. There are other scaling solutions such as Sidechains, Statechannels, Plasma, Subnets etc. This document will only focus on L2 Optimistic Rollups - the initiating developer team deliberately decided to go for a scaling solution with an optimistic approach, as the belief is that this will be the most effective way going forward.
Another way to define L2s: They’re a new blockchain/network built on top of an existing blockchain/network to increase overall transactions per second, batch transactions to reduce gas fees, and improve the decentralization and security of the base layer.

Optimistic Rollup

An Optimistic Rollup is a network that utilizes a base chain's security to optimize scalability. Optimistic Rollups don’t have their own consensus for validating transactions, instead, they take advantage of the consensus mechanism, such as PoW & PoS, from the baselayer network. Computation is typically slow and expensive on the base layer. However, sending calldata to the baselayer with an Optimistic Rollup batches a group of transactions that can ultimately speed up transaction times by 10-100x and drastically decrease transaction costs per transaction in the Optimistic Rollup.
Because there is no consensus on an Optimistic Rollup, there needs to be a security mechanism to ensure fraudulent transactions don’t occur. This is where fraud proofs come in. When an Optimistic Rollup states its commitments to the base layer, these commitments are pending in a “challenge window”. The challenge window is live for roughly 7 days, this is where fraud proof can challenge any calldata that looks fraudulent. If no challenges arise in the 7-day period, the smart contracts on the base layer can safely accept the commitments, and data is then stored on the L1.
If a commitment is challenged, it can be invalidated by a fraud proof process. When a commitment is successfully challenged, it is removed from the commitment chain to be replaced by another proposed commitment. In doing so, the Optimistic transaction still goes through on the base layer, but with only the approved commitment, being published on the base layer’s blockchain.
During the Canary Network developer testing phase, the Autobahn Network will not need to use fraud proofs. Further information can be found here.

How can Optimistic Rollups work on other chains

Optimistic Rollups were created as an open source Ethereum Virtual Machine (EVM) tool. This means, if adjusted accordingly, they can be used with any other EVM chain such as BNB Smart Chain.