Understanding rollup economics from first principles

Pricing resources in an L1-dependent economy

Rollups are a fascinating primitive. They are set to become Ethereum’s preferred way of scaling moving forward and offer a wide design space for their operations. On all counts, rollups extend the protocol they build on, preserving most of its properties. All that matters is to guarantee correctness of the off-chain execution, as well as availability of the data behind the execution. How to achieve either is up to the designer. Lately I’ve become interested in understanding rollups from an economic perspective. This is not just a theoretical concern. Fees on the base layer (L1) are high and…

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