Rollup Economics

Definition ∞ Rollup economics pertains to the financial and operational principles governing the functioning and incentivization of rollup solutions on blockchain networks. Rollups are layer-2 scaling technologies that bundle multiple transactions off-chain and then submit a compressed summary to the main chain, thereby increasing transaction throughput and reducing costs. The economics involve how transaction fees are collected, distributed to sequencers and validators, and how the overall cost-effectiveness of the rollup is maintained relative to base layer settlement. Sound rollup economics are crucial for their widespread adoption and sustainability.
Context ∞ Rollup economics are a focal point of discussion as layer-2 scaling solutions become increasingly integral to blockchain infrastructure. News frequently highlights new rollup designs, fee structures, and incentive mechanisms aimed at optimizing cost efficiency and decentralization. Debates often center on the sustainability of sequencer revenue models, the impact of data availability costs, and the competitive positioning of different rollup architectures in the scaling landscape.