How to find the best second-layer Rollup solution?

As more and more second-layer solutions and Rollup technologies are adopted, integrated, and built, Ethereum's scaling problem is slowly being solved. Naturally, this leads to the question of which of the currently available Rollups is better, and what are the advantages and disadvantages of each Rollup.

Rollups are an Ethereum scaling solution that can make transactions more efficient while still having similar security guarantees as the Ethereum mainnet. They work by moving transaction execution off-chain, but still publishing transaction data to the mainchain. Additionally, data from multiple transactions can be put together and essentially “rolled up” into one transaction on the mainchain, hence the name. In this way, transactions become faster and cheaper than on the first layer. Many see Rollups as the future of Ethereum scaling and believe it will help Ethereum maintain its position as the dominant smart contract platform.

Currently, the most popular type of Rollup is Optimistic Rollups. They use a fraud-proof model where if a transaction is invalid or malicious, any validator can dispute it within a specific window (usually a week), and the network will run a fraud proof to determine if the transaction is fraudulent. If it is invalid, the validator who captures it will receive an Ethereum reward directly from the malicious actor who submitted the transaction.

The two most popular Optimistic Rollups solutions are Arbitrum and Optimism, both of which can process about 2,000-5,000 transactions per second at full capacity. Currently, both are still in the development stage and have limited their transaction capacity to prevent problems. The transaction fee for sending ETH is around 50 cents.

While Optimism was once touted as having the potential to become a major second layer, delays and lack of communication have caused it to fall to second place, behind Arbitrum. Its current total value locked is around $500 million, and their dApps are Synthetix and Uniswap.

Arbitrum took advantage of Optimism’s delays and issues, quickly taking over and surpassing them to become the main second layer. Currently, its Rollup is valued at around $2 billion, with many more dApps to go with it.

Another type of Rollup, ZK Rollups, is still in the early stages of development. Their complexity does make them faster and potentially cheaper. Right now, there are a few ZK Rollups, such as Loopring, ZkSync, and Polygon Hermez, with Loopring being the largest. However, they all have specialized use cases, such as payments and exchanges, and have not yet implemented general smart contract functionality. This makes them ideal for some users, but far from the all-in-one platforms they plan to be one day.

Currently, Arbitrum appears to be the ideal second-layer Rollup because it has the most dApps while still having relatively cheap and fast transactions. However, once ZK Rollups projects are able to achieve Ethereum Virtual Machine compatibility, a feature that allows smart contract deployment, they will likely become the platform of choice for most users.

It’s also possible that different Rollups will become known for different features and dApps. This has been seen with Loopring, which is generally seen as the best Rollup for exchanging cryptocurrencies. This is also ideal from a security perspective, as a single accident, hack, or rollup failure won’t have catastrophic consequences.

While we can’t say for sure where Rollups will go in the future, they appear to be heading in an exciting and positive direction that will make Ethereum accessible to everyone.