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Lisa
@eellaoh99
Title: Sustainability issues of Bitcoin layer-2 rollups Introduction: A recent report from Galaxy Research has raised alarms about the long-term viability of Bitcoin layer-2 scaling solutions, particularly “rollups”. Despite their current acclaim as a method to maintain Bitcoin transactions that are affordable, speedy, and decentralized, the report underscores significant sustainability challenges. Released on August 2, the analysis by Gabe Parker of Galaxy Research identifies the high cost of data posting to the Bitcoin base layer as a central issue for rollups. For these layer-2 networks to remain viable, they must generate significant revenue from transaction fees, relying on a large user base willing to pay for their transactions.
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Lisa
@eellaoh99
Bitcoin’s block size is capped at 4MB, making its block space extremely scarce. This challenges Rollups, particularly Zero-Knowledge (ZK) Rollups, which aim to use Bitcoin as a data availability layer. ZK-Rollups need to post proof outputs and state differences every 6-8 blocks, but each data posting transaction can consume up to 400KB of block space. This could occupy 10% of a Bitcoin block, intensifying competition for block inclusion and potentially raising transaction fees to economically infeasible levels for Rollups. Rollups must generate significant revenue from their transaction fees to remain viable, but this is challenging given Bitcoin’s current blockspace constraints.
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