2025 Rollup Ecological Outlook: Rollup revenue will decrease, ZK technology will reach a critical moment.

Author: @ayyyeandy

Translation: Blockchain in Plain Language

Rollups move multiple off-chain transactions from the main Bitcoin blockchain to a separate network, process them, and then submit a compressed transaction back to the chain. Common types of Rollups include optimistic rollups, ZK-Rollups, and sovereign rollups. Some representative projects currently include: B² Network, Bitlayer, BOB, Citrea, QED Protocol, Zulu Network, GOAT Network, Mezo, Bitfinity Network, ARCH Network, etc.

In 2024, the Rollup ecosystem is rapidly developing, with application chains and customized L2 solutions on the rise, driving innovation in DeFi. Competition between Rollups is gradually weakening, with more focus on cross-chain interaction and user experience. ZK Rollup has attracted a large following due to its privacy and performance improvements, while the new generation of Virtual Machine Rollups outperforms traditional EVM in terms of performance. At the same time, the design and governance issues of Decentralization Sequencer have become a major topic of discussion, and the revenue model of Rollup is facing challenges, but the overall market potential is enormous.

@ayyyeandy made some predictions about the development of Rollup ecosystem in 2025. The following is the main text:

As the importance of the chain decreases, more value will flow to applications, and we will see thousands of AppChains or L2s redistributing income to applications through governance or protocol design. We are entering an era where applications are starting to 'wield their weapons' to demand their rightful income, otherwise they will turn to their own chains or choose an underlying chain willing to share income. This will drive the emergence of more customized/niche L2s, which can provide revenue distribution for applications, and there will also be chains specifically designed for applications, gradually vertically integrating their technical stack.

The tribalism between Rollups will gradually decrease as the user experience shifts from switching between different chains to a holistic experience of "using Cryptocurrency". Of course, we will still see competition between Optimism and Arbitrum, as well as ZK Sync and Scroll, but overall, I believe that the competition between Rollups will decrease at the chain level, as the community is more inclined to expand the market as a whole rather than fight for limited user shares.

Rollup's revenue will decrease. This is partly due to the increase in the number of Rollups, the demand for Sequencer revenue sharing, and the trend of application chains building their own chains (these applications may originally choose L2 operation).

Rollups based on Ethereum will gain more attention in the tech community, venture capital, and Ethereum followers, as they are seen as a key driver to solve the debate of 'L2 parasitic on L1'. Rollups based on AppChain using the same pre-confirmation service or marketplace can achieve synchronous composability with each other and with Ethereum L1. This field is still a blue ocean.

The Rollup, which replaces the Virtual Machine/next generation Virtual Machine, will rise strongly. These will become the most optimal Rollup technology stack in terms of TPS and gas cost per second. Their performance will surpass any Rollup highly integrated with EVM that has not achieved parallelism. SVM, MoveVM, FuelVM, LinuxVM, ZKVM, etc. will gradually become popular and become the home of some very cool applications.

ZKRollup is about to have its moment in the spotlight. Despite Optimistic Rollup dominating market sentiment and usage (such as TVL), the rapid performance improvement of ZK Rollup is worth following. I expect there will be a lot of ZK Rollup launches, with costs and speeds quickly improving.

The future of Ethereum and the modular ecosystem is very promising.