Introduction

In the world of blockchain technology, scalability has always been a significant concern. As the number of users and transactions on a blockchain increases, the system's ability to process transactions quickly and efficiently becomes increasingly important. One of the solutions proposed to address this issue is the concept of rollups, and among the different types of rollups, recently enshrined rollups have gained considerable attention.

Enshrined rollups are a type of Layer 2 scaling solution that aims to increase the transaction throughput of a blockchain by performing computation off-chain and posting the results to the blockchain. This post will delve into the concept of enshrined rollups, how they work, why they are needed, their pros and cons, and how they compare to other types of rollups such as classic rollups and sovereign rollups.

What are Enshrined Rollups?

Enshrined rollups are a type of rollup that enjoys some sort of consensus integration at Layer 1 (L1). They contrast with smart contract rollups, which live fully at Layer 2 (L2), outside of consensus. Consensus integration can endow enshrined rollups with superpowers at the cost of significant tradeoffs.

The term "enshrined" refers to the fact that the rollup's logic is embedded (or "enshrined") into the protocol of the Layer 1 blockchain itself. This means that the rollup's operation is governed by the consensus rules of the Layer 1 blockchain, rather than being determined by a separate set of rules or a smart contract.

How do Enshrined Rollups Work?

Enshrined rollups work by performing most of the computational work off-chain and then posting the results of these computations to the Layer 1 blockchain. The off-chain computations are performed by a set of validators who are responsible for processing transactions and producing proofs of the computation's correctness.

These proofs are then posted to the Layer 1 blockchain, where they are checked and verified by the blockchain's consensus mechanism. If the proofs are valid, the results of the computations are accepted and added to the blockchain's state.

The key advantage of this approach is that it allows for a significant increase in transaction throughput, as the Layer 1 blockchain does not need to perform the computations itself. Instead, it only needs to check the validity of the proofs, which is a much less resource-intensive task.

Why do we Need Enshrined Rollups?

Enshrined rollups offer several advantages that make them a promising solution for scaling blockchain systems:

1. Increased Transaction Throughput: By performing computations off-chain and only posting the results to the blockchain, enshrined rollups can significantly increase the number of transactions that a blockchain can process per second.

2. Security: Because the rollup's operation is governed by the Layer 1 blockchain's consensus rules, enshrined rollups inherit the security properties of the Layer 1 blockchain. This means that as long as the Layer 1 blockchain is secure, the enshrined rollup is also secure.

3. Decentralization: Enshrined rollups can help to maintain the decentralization of a blockchain system. Because the computations are performed off-chain by a set of validators, there is no need for every node in the network to process every transaction. This can help to reduce the resource requirements for running a node, making it easier for more participants to join the network and contribute to its security.

4. Interoperability: Enshrined rollups can be designed to be compatible with existing Layer 1 blockchains, making it easier for them to interact with other systems and applications built on the same blockchain.

Pros and Cons of Enshrined Rollups

Likeany technology, enshrined rollups come with their own set of advantages and disadvantages.

Pros:

1. Scalability: Enshrined rollups significantly increase the transaction throughput of a blockchain by performing most of the computational work off-chain and only posting the results to the blockchain.

2. Security: Enshrined rollups inherit the security properties of the Layer 1 blockchain, making them highly secure.

3. Decentralization: By performing computations off-chain, enshrined rollups help to maintain the decentralization of a blockchain system by reducing the resource requirements for running a node.

4. Interoperability: Enshrined rollups can be designed to be compatible with existing Layer 1 blockchains, facilitating interaction with other systems and applications built on the same blockchain.

Cons:

1. Complexity: Enshrined rollups add a layer of complexity to the blockchain system. This can make them more difficult to understand and implement, potentially slowing down their adoption.

2. Dependency on Layer 1: The operation and security of enshrined rollups are dependent on the Layer 1 blockchain. If the Layer 1 blockchain is compromised, the enshrined rollup could also be affected.

3. Upgradeability: Enshrined rollups may be less flexible and harder to upgrade than other types of rollups because their logic is embedded in the Layer 1 protocol.

Comparison to Classic Rollups and Sovereign Rollups

Classic Rollups:

Classic rollups, also known as smart contract rollups, are chains where instead of a consensus, security is coordinated through smart contracts on a highly secure and decentralized chain, e.g., Ethereum. They inherit the security of Ethereum but are upgradeable through the rollup’s governance.

Compared to enshrined rollups, classic rollups offer more flexibility in terms of upgradeability because their logic is not embedded in the Layer 1 protocol. However, they may not offer the same level of scalability as enshrined rollups because they still require smart contracts to handle upgrade and proof verification logic.

Sovereign Rollups:

Sovereign rollups are rollups that settle themselves, instead of a more secure settlement layer. They use the data availability layer purely for data and ordering. These do not have secured bridges to a settlement layer, which some argue misses the feature of rollups.

Compared to enshrined rollups, sovereign rollups offer more independence as they do not rely on a Layer 1 blockchain for security. However, this also means that they do not inherit the security properties of a Layer 1 blockchain, potentially making them less secure.

Conclusion

Enshrined rollups represent a promising approach to scaling blockchain systems, offering increased transaction throughput, high security, and maintaining decentralization. However, they also come with their own set of challenges, including increased complexity and dependency on the Layer 1 blockchain. As with any technology, it will be important to carefully consider these trade-offs when deciding whether to adopt enshrined rollups.