Rollups
What are Rollups?
Rollups offer a model that offloads heavy computation and state storage from the host while relying on the host for security guarantees. Rollups achieve this by electing dedicated, often centralized, Sequencers who are responsible for aggregating transactions and producing blocks.
The popularity of Rollups inspired projects like Celestia to champion data availability as an independent service, offering a Tendermint-based storage layer for Rollup deployment.
Critical thinking: Celestia promotes itself as modular - but how does this work with Blockchain 101?
How does it work?
Just like Monoliths - builders deploy app code to 'contract' accounts that the Sequencer and full-nodes store, update state, execute transactions on, and verify. The app code is only the 'state-machine' logic, whereas the Rollup client handles peer-to-peer, and persistence — while the host protocol (Ethereum) handles Consensus and finality.
Pros & Cons of building on Rollups
The good:
✅ quick to market
✅ have immediate security
✅ have access to Ethereum's ecosystem and tooling
✅ have an easy framework to build
It's important not to overlook the features that make Ethereum so popular
The bad:
❌ compete for limited resources, favoring the highest bidder
❌ leak economics to Ethereum for life (fees, network effects, ecosystem lock-in)
❌ can't leave without starting over
❌ have limited scalability
❌ are success-capped with historically lower FDV than L1s
❌ can't natively communicate with external ecosystems
are not decentralized, relying on the host for:
❌ governance
❌ transaction execution
❌ state updates
❌ blockchain storage
Which means:
❌ can be censored by non-stakeholders
❌ are controlled by the host
❌ lack autonomy
❌ have single points of failure
A "not so" decentralized app is just Web2 with an inefficient and complicated architecture
Canopy and Rollups Comparison
Architecture
✅ Peer-to-Peer
❌ Layered on a Monolith
Scaling Method
✅ Every new chain horizontally scales Web3
❌ Semi-centralized layers
Builder Sovereignty
✅ Progressive
❌ Critical, lifelong reliance on host for security, finality, and blockchain storage
Ecosystem
❌ New
✅ The best
Long range attack
✅ Proof of Age
✅ Checkpoint on Ethereum
Builder Difficulty
✅ Quick to market
✅ Quick to market
Builder Economic Security
✅ Immediate
✅ Immediate
Builder Framework
➖ Fork & Clone: Golang
➖ Standards with DSL (Solidity)
Chain Resources
✅ Exponential: Each new chain is additive
❌ Limited: host single chain
Builder Success
✅ L0 Premium
❌ Typically lower FDV than sovereign L1s
Native Interoperability
✅ Permissionless
➖Within Ecosystem
Builder Decentralization
✅ Full/Progressive
❌ Not decentralized
Last updated