What is Optimistic Rollup?

An optimistic rollup is a sort of layer 2 scaling solution that uses off-chain processing to reliably record layer 2 transactions. The mechanism distributes Merkle roots of the transactions that occur inside the rollup on a regular basis in order to refresh the "state" of the rollup on the key underlying chain. 

Before any changes are made to the state, a network of external validators holds the responsibility to ensure that the Merkle roots are accurate. If an anomaly occurs, the validator publishes a fraud-proof during the argument period, causing the system's configuration to be rolled back to its prior valid state.

The major benefit of optimistic rollups over zero-knowledge alternatives is that they can back smart contracts in the same way that the underlying smart contract-enabled blockchain does. The rollup's native support for smart contracts implies that apps can be deployed considerably more easily, without the need for further programming.

However, the biggest drawback, on the other hand, is that it takes longer for layer 2 users to be able to deposit their cash back to the underlying blockchain when compared to zero-knowledge rollups. It's a result of the fact that an optimistic rollup must depend on validators to verify the Merkle roots for fraud before the state can be changed. Therefore, there must be enough time for validators to verify and challenge the layer 2 activity.