The term 'Optimistic rollups' stems from the approach taken in processing transactions.

This cost is conveniently shared among all participants involved. By consolidating multiple transactions into one, the cost of the blockchain transaction, also known as 'gas' fee, is significantly reduced to just a single transaction. Rollups are named as such because they combine the information from numerous transactions, including non-fungible token (NFT) mints and token swaps, into a single transaction on Ethereum's mainnet (referred to as layer 1). Optimism utilizes a technology known as rollups, specifically Optimistic rollups. This technique incorporates a mechanism known as 'fraud proof,' which ensures the integrity and security of the transaction process. Optimism leverages Optimistic Rollups, a cryptographic technique that utilizes smart contracts as bridges between Layer 1 (L1) and Layer 2 (L2).

By bundling hundreds of transactions into these batches, Optimism significantly reduces the fees required for settlement compared to executing them directly on the Ethereum network. These batches of data are then transmitted back to Ethereum's mainnet, where they undergo validation as additional data blocks. It collects transaction data from the main chain, consolidates it into batches, and settles them. Optimism operates as a scaling solution for Layer 1 networks by employing a process known as rollup. It is designed so that users can send arbitrary messages between smart contracts on Optimism and Ethereum, which makes it possible to transfer assets, including ERC-20 tokens, between the two networks. It processes several transactions on its blockchain and posts them in batches on Ethereum, providing fast speed and low fees. Optimism is a layer 2 blockchain that acts as a scaling solution for Ethereum.

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