Fast finality is an essential concept in the world of decentralized finance, and it is especially relevant when it comes to rollups. But what exactly is fast finality, and why is it essential for rollups? In this article, we will explore these questions in greater detail.
Fast finality refers to the speed at which the finality of a transaction can be determined. In the context of a blockchain, finality refers to the point at which a transaction is considered irrevocable. Once a transaction has achieved finality, it cannot be reversed or altered.
When a transaction is processed on a blockchain, it must be validated by the network and included in a block. When a block of transactions is mined, it is added to the blockchain and becomes a permanent part of the record. This process, known as block confirmation, can take some time, requiring the block to be mined and added to the chain.
In traditional proof-of-work (PoW) blockchains, such as Bitcoin, finality is achieved through the process of mining. However, this process can take time, as it requires miners to perform complex calculations to create a new block.
This delay in block confirmation can be a major drawback for decentralized applications (dApps) that require fast transaction processing. For example, a decentralized exchange (DEX) may need to quickly match, buy and sell orders in order to provide a seamless user experience. If it takes too long for transactions to be confirmed, the exchange may become congested and users may experience delays or other issues.
As a solution to this came the need for fast finality systems that can achieve finality much more quickly. This is particularly important for rollups, which are a type of scaling solution for blockchains.
Rollups is a layer 2 scaling solution that works by grouping transactions together and including them in a single “superblock,” which is then added to the blockchain. By reducing the number of transactions that need to be processed individually, rollups can increase the scalability of a blockchain.
However, until recently, rollups did not offer the same level of finality as their on-chain counterparts. And for rollups to be effective, they must be able to achieve fast finality. If it takes too long for a rollup transaction to reach finality, it could hinder the effectiveness of the scaling.
This is where fast finality for rollups comes in.
