Rollup Ecosystem's Rapid Growth And Future Predictions

According to PANews, Rollup technology, which moves multiple off-chain transactions from the main Bitcoin blockchain to an independent network for processing before submitting a compressed transaction back on-chain, is evolving rapidly. Common types of Rollups include optimistic rollups, ZK-Rollups, and sovereign rollups, with notable projects such as B² Network, Bitlayer, BOB, Citrea, QED Protocol, Zulu Network, GOAT Network, Mezo, Bitfinity Network, and Arch Network leading the way. In 2024, the Rollup ecosystem is expected to see significant development, with the rise of application chains and customized Layer 2 (L2) solutions driving innovation in decentralized finance. Competition among Rollups is anticipated to decrease, with a greater focus on cross-chain interoperability and user experience. ZK Rollups are gaining attention for their privacy and performance enhancements, while new-generation virtual machine Rollups are outperforming traditional Ethereum Virtual Machine (EVM) Rollups. Decentralized sequencer design and governance issues are becoming key discussion points, and while Rollup revenue models face challenges, the overall market potential remains substantial. Looking ahead to 2025, it is predicted that as the importance of individual chains diminishes, more value will flow to applications. Thousands of application chains or L2 solutions will redistribute revenue to applications through governance or protocol design. This shift will lead to the emergence of more customized or niche L2 solutions that offer revenue sharing, as well as chains specifically designed for applications, gradually integrating their technology stacks vertically. Tribalism among Rollups is expected to decrease as user experience shifts from switching between different chains to a more unified experience of simply using cryptocurrency. While competition between platforms like Optimism and Arbitrum, as well as ZK Sync and Scroll, will continue, the overall competition at the chain level will lessen as communities focus on expanding the market rather than fighting over a limited user base. Rollup revenue is projected to decline due to the increasing number of Rollups, the demand for sequencer revenue sharing, and the trend of application chains building their own chains instead of opting for L2 operations. Ethereum-based Rollups will gain more attention from the tech community, venture capitalists, and Ethereum enthusiasts as they are seen as key to resolving the debate over L2's parasitic relationship with L1. Application chain-based Rollups using the same pre-confirmation services or markets can achieve composability with each other and Ethereum L1, presenting a vast, untapped potential. Alternative virtual machines and next-generation virtual machine Rollups are set to rise, offering superior performance in transactions per second (TPS) and gas fees. Technologies like SVM, MoveVM, FuelVM, LinuxVM, and ZKVM will become more prevalent, hosting innovative applications. ZK Rollups are poised for a breakthrough, with their rapid performance improvements making them a significant player despite the dominance of optimistic Rollups in market perception and usage. The future of Ethereum and the modular ecosystem holds great promise.