Layer 2 scaling solutions fall into two broad categories:
- Rollups (Optimistic Rollups, ZK Rollups)
- Sidechains (independent blockchains connected to L1)
While they can look similar from a user experience perspective (cheap fees, faster transactions), their security models are fundamentally different.
1. What Are Rollups?
Rollups are true Layer 2 systems built on top of an L1 (like Ethereum).
They process transactions off-chain but post data or proofs back to the L1, inheriting the L1’s security.
1.1 Key Features
✔ Inherit L1 security — the L1 verifies the rollup state
✔ Post data to L1 (data availability)
✔ Non-custodial — users can always withdraw even if the rollup stops
✔ No separate consensus mechanism
✔ Only execution is off-chain; settlement is on L1
1.2 Types of Rollups
- Optimistic Rollups (Arbitrum, Optimism)
- Assume transactions are valid
- Fraud proofs catch any invalid batches
- Withdrawals take days (challenge period)
- ZK Rollups (zkSync, StarkNet, Polygon zkEVM)
- Use cryptographic validity proofs
- L1 verifies proofs instantly
- Fast withdrawals and higher security
1.3 Real-World Examples
- Arbitrum One and Arbitrum Nova
- Optimism
- zkSync Era
- StarkNet
- Polygon zkEVM
2. What Are Sidechains?
Sidechains are independent blockchains that run in parallel to an L1.
They do not inherit security from the L1 — they rely on their own validator set.
2.1 Key Features
✔ Independent consensus (PoS, DPoS, etc.)
✔ Not secured by the L1
✔ Bridging requires a trusted bridge
✔ Flexible design (can choose own fees, block times, features)
✔ Usually cheaper and faster than L1, but with more trust assumptions
2.2 What Sidechains Are NOT
They are not Layer 2 rollups.
They are separate Layer 1 chains that interoperate with another L1.
2.3 Real-World Examples
- Polygon PoS (sometimes misleadingly called L2, but is a sidechain)
- xDai / Gnosis Chain
- Ronin (Axie Infinity)
- SKALE Network
- Rootstock (RSK) for Bitcoin
3. Core Differences — Deep Dive
3.1 Security
Rollups
- Security comes from the L1
- Data is on the L1
- Users can exit even if sequencers go offline or turn malicious
Sidechains
- Security depends on the sidechain validators
- If the sidechain is attacked, user funds may be at risk
- Bridges can be hacked
(Ronin: $600M exploit, Harmony: $100M exploit)
3.2 Consensus
Rollups
- Execution only
- L1 acts as consensus and settlement
- Sequencer ordering doesn’t affect final security
Sidechains
- Full blockchain
- Must run their own consensus
- Validators must be incentivized
- More susceptible to 51% or validator attacks
3.3 Data Availability
Rollups
- Publish transaction data (or proofs) to L1
- Anyone can reconstruct the rollup state
Sidechains
- Store data on their own chain
- If validators censor or withhold data, users may be stuck
3.4 Trust Assumptions
Rollups
Trust-minimized:
Users trust Ethereum (or the base L1), not the rollup itself.
Sidechains
Trust-based:
Users must trust:
- Sidechain validators
- Bridge operators
- Their economic security
3.5 Performance
Rollups
- High throughput
- Might be limited by L1 data costs
- ZK rollups scale extremely well
Sidechains
- Can scale significantly because they are independent
- But scaling comes at the cost of weaker security
4. Summary Table — Rollups vs Sidechains
| Feature | Rollups | Sidechains |
|---|---|---|
| Security | Inherits L1 security | Self-secured (independent validators) |
| Data Availability | Stored on L1 | Stored on sidechain |
| Consensus | Uses L1 for consensus | Has own consensus mechanism |
| Settlement | Settled on L1 | Settled on sidechain |
| User Trust Assumptions | Trustless; L1 guarantees safety | Must trust validator set + bridge |
| Withdrawal Guarantees | Always safe (forced withdrawals possible) | Depends on bridge and validator honesty |
| Typical Fees | Low | Very low |
| Scalability | High (esp. ZK rollups) | High but less secure |
| Examples | Arbitrum, Optimism, zkSync, StarkNet | Polygon PoS, Gnosis Chain, Ronin, RSK |
| Bridge Risks | Minimal; L1 enforces correctness | High; bridge can be hacked |
| Decentralization | Inherited from L1 | Varies a lot |
L2 EXAMPLES
🔶 1. Ethereum (Layer 1) + Arbitrum (Layer 2 Optimistic Rollup)
How It Works in the Real World
- Ethereum (L1) is responsible for security, consensus, and settlement.
- Arbitrum (L2) is where users actually transact—much faster and with lower fees.
Arbitrum batches many L2 transactions and posts them to Ethereum as compressed data.
User Experience Example
A user performing a DeFi swap:
- Connect wallet → switch to Arbitrum One
- Pay ~$0.02 fee instead of ~$3–$6 on Ethereum
- Swap executes instantly on L2
- Batch is settled on Ethereum within minutes
Why This Matters
Arbitrum allows:
- High-speed transactions (hundreds per second)
- Very low gas costs
- The same security guarantees as Ethereum
As a result, Arbitrum hosts major apps:
- GMX (perpetuals)
- Uniswap
- Radiant Capital
- Aave
- Stargate
🔶 2. Ethereum (Layer 1) + Optimism (Layer 2 Optimistic Rollup)
Optimism is another L2 scaling solution built on Ethereum.
How It Works
- Executes transactions off-chain in an “Optimistic Rollup”
- Posts transaction data to Ethereum
- Fraud proofs allow anyone to challenge invalid transactions
Real-World Example
A user mints an NFT on an Optimism-based marketplace:
- Mint costs $0.10 on Optimism
(would cost $5–$15 on Ethereum) - NFT is instantly minted on the L2
- Optimism settles the batch on Ethereum
- The NFT is just as secure as if minted on L1
Ecosystem Examples
- Coinbase’s Base L2 is built using the Optimism tech stack
- Synthetix
- Friend.tech
- Velodrome
Optimism powers the “Superchain,” where multiple L2s share the same infrastructure.
🔷 3. Ethereum (Layer 1) + zkSync, StarkNet, Polygon zkEVM (ZK Rollups)
Zero-knowledge (ZK) rollups are more advanced and provide cryptographic guarantees.
How They Work
- Transactions are executed on the L2
- A validity proof (SNARK/STARK) is generated
- The proof is posted to Ethereum
- Ethereum verifies the proof in milliseconds
- Instant or near-instant finality
- Ultra-secure and harder to attack than optimistic rollups
Real-World Example: zkSync
User sends money on zkSync:
- Transfer costs a few cents
- Proof is generated (cryptographic guarantee)
- Settlement occurs on Ethereum
- Finality is extremely fast (minutes or less)
Where ZK rollups are used today
- zkSync: Payments and DeFi
- StarkNet: High-performance apps (gaming, Cairo language)
- Polygon zkEVM: Full EVM compatibility
ZK rollups are seen as the future of Ethereum scaling.
🟧 4. Bitcoin (Layer 1) + Lightning Network (Layer 2 Payment Channel Network)
Bitcoin has extremely limited throughput (≈7 tps).
Lightning Network solves this using off-chain payment channels.
How Lightning Works
- Two users open a payment channel on Bitcoin (L1)
- They transact off-chain, instantly and endlessly
- Only the final channel state is posted back to Bitcoin
Real-World Example
You buy a coffee:
- Scan Lightning QR code
- Payment settles in milliseconds
- Fee is ~$0.0001
- Merchant receives the BTC instantly
- No on-chain confirmation needed
Lightning wallets include:
- Phoenix
- Muun
- Wallet of Satoshi
- Cash App Lightning support
Lightning is also used for:
- Microtransactions
- Streaming payments
- Cross-border remittances
- El Salvador’s BTC infrastructure
🧭 Why These L2s Matter in Practice
| L1 + L2 Pair | What L2 Improves | Real-World Impact |
|---|---|---|
| Ethereum + Arbitrum/Optimism | Scalability, fees, latency | DeFi, NFTs, gaming become usable and cheap |
| Ethereum + ZK Rollups | Security, speed, privacy | Advanced apps, high TPS workflows |
| Bitcoin + Lightning | Instant payments, micropayments | Real-world commerce, remittances, point-of-sale systems |
