Rob Behnke
October 25th, 2023
Smart contract platforms like Ethereum offer numerous benefits for developers. For example, the decentralized nature of the blockchain provides additional resiliency and censorship resistance to the applications built on it. Additionally, cryptocurrency offers a built-in payment system — making it easy to implement in-game purchases — and non-fungible tokens (NFTs) enable tracking of in-game assets.
However, some of the main limitations of blockchain platforms are their throughput and scalability. Since blockchains add data to the blockchain as part of blocks with a fixed maximum size, they commonly have limited throughput and slow transaction speeds. This can be problematic if a Web3 game or other dApp requires frequent interaction or low latency.
Rollups and Rollup-as-a-Service (RaaS) platforms offer a solution to this problem. By recording transactions off-chain and using the blockchain to secure or verify these transactions, rollups provide the scalability and transaction speeds that developers need.
This is a more modular approach to blockchain and the development of dApps on the blockchain. Instead of cramming everything into Layer 1, Rollups enable specialized applications to be built on higher layers that roll up to a trusted blockchain.
RaaS is a service offering designed to make it easier for developers to build on top of Ethereum and other blockchains. To grasp the appeal of these services, it’s helpful to understand some of their alternatives and precursors.
The major blockchain platforms like Ethereum have transaction speed and scalability challenges. One option for developers looking to build on the blockchain but avoid these issues is to create their own Layer 1.
Creating a Layer 1 isn’t too difficult with many open-source blockchains to fork and platforms such as Polygon. However, it does have its downsides. While an app’s Layer 1 may use cross-chain bridges to enable transfers to other Layer 1, it might struggle to build the community needed for strong security. For example, blockchains like Bitcoin and Ethereum have massive communities supporting their consensus algorithms, making them much more resilient to attack than many alternatives.
Rollups address the scalability problem by building up rather than in parallel. A Rollup is a Layer 2 protocol that sits on top of an existing blockchain and records summaries of transactions performed off-chain on a trusted Layer 1. Rollups take batches of transactions and record minimal data on-chain to reflect the state updates performed as a result of those transactions.
Rollups come in two main flavors:
Optimistic Rollups: An Optimistic Rollup assumes that rollup transactions are legitimate until proven otherwise. Optimistic Rollups have a challenge period during which someone can submit proof that a rollup transaction is invalid. If no challenge is submitted during the challenge period, the transactions are assumed to be valid and processed.
ZK-Rollups: A ZK-Rollup uses zero-knowledge proofs to demonstrate the validity of its state updates. With these proofs, anyone can validate that a batch of transactions is correct without needing access to the full transaction data on-chain.
Several Rollup platforms exist, such as zkSync and Starknet. Developers can build on these platforms to record transactions off-chain, enabling faster more scalable transactions than building on a Layer 1 platform.
Working with an existing Rollup platform can be limiting for a developer. The platform may have made certain decisions regarding transaction structure, rate of recording transactions on-chain, etc., that might not work with a developer’s needs. Additionally, most Rollup platforms have limited capacities, so a developer building on a popular Rollup platform may face the same problems that they would on a Layer 1 blockchain.
Rollup Frameworks and SDKs — such as Rollkit, Arbitrum Orbit, and OP Stack — provide developers with the tools that they need to create their own Rollups. Rollups are implemented as smart contracts, so by modifying an existing Rollup framework, a developer can create and deploy a Rollup customized to their unique needs.
Rollup SDKs provide developers with the greatest level of control over the infrastructure supporting their applications. However, creating and customizing a Rollup using an SDK requires deep technical knowledge and the ability to modify, deploy, and operate a rollup contract.
Rollups-as-a-Service (RaaS) providers handle the challenge of creating and customizing a Rollup for a developer. These providers make it easier for the developer to tailor features such as data availability, fee payments, and other aspects of a Rollup to their application.
Rollups-as-a-Service provides a few advantages when compared to the other options that developers have, such as:
Scalability: RaaS allows an application to operate its own Rollup. This provides much greater scalability than using an existing Layer 1 or a shared Rollup where the application needs to compete for space with other applications and other transactions.
Transaction Speed: If a RaaS provider offers ZK-Rollups, the application can have very quick resolution times for transactions. This is especially true since parameters such as the time between batches of transactions being written to the blockchain is under the control of the developer.
Customizability: RaaS enables a developer to customize a Rollup to meet their application’s unique needs. This may offer improved scalability, transaction speeds, or fee structures when compared to working with an existing Layer 1 or Rollup platform.
Security: While implementing a new Layer 1 offers high customizability, these standalone blockchains may not be as secure. Rollups rely on a host blockchain for security, granting them the same level of security as Ethereum or whatever blockchain they are hosted on.
Ease of Use: Rollup Frameworks enable developers to create their own Rollups, but they can be difficult to use. RaaS enables a developer to rely on third-party expertise when creating Rollups.
Rollups-as-a-Service provide another option for scaling and speeding up blockchain technology. While Rollups offer similar features, they can suffer from congestion, lack of alignment to a developer’s needs, or limited ease of use.
With RaaS, developers get the best of both worlds with a solution that not only is customized to their needs but is easier to use due to the services of a Rollup provider. Additionally Rollups – under a RaaS model or otherwise – offer greater security than a standalone blockchain since their security is based on that of the blockchain platform that they write their data to.