General Rollup vs Application Rollup

Shared State & Liquidity: Apps share a single state and security model (e.g., Arbitrum, Optimism). This enables seamless composability like DeFi legos. Ideal for: DEXs, lending protocols, and projects requiring deep integration with a broad ecosystem.

Standardized Tooling: Leverage battle-tested frameworks (OP Stack, Arbitrum Orbit) and shared infrastructure (bridges, indexers). Key Metric: 2-4 week deployment cycles vs. months for custom chains. Ideal for: Teams prioritizing rapid iteration and avoiding infra overhead.

Shared Sequencer & Prover Costs: Security is inherited from the L1, but you compete for block space and pay fees to the rollup's shared sequencer. Downside: No control over transaction ordering or MEV capture. Example: Base transaction fees fluctuate with network-wide demand.

Dedicated Throughput: Your app owns the block space. No competition from other dApps means predictable, high TPS and sub-second latency. Key Metric: dYdX v4 achieves ~1,000 TPS for perpetual swaps. Ideal for: High-frequency trading, gaming, or social apps.

Full Stack Control: Customize the VM (EVM, SVM, Move), fee token, and sequencer logic. Capture 100% of sequencer fees and MEV. Example: Aevo runs a custom options orderbook on an OP Stack fork with its own fee model.

Operational Overhead: You must bootstrap validators, bridges, and liquidity. Key Metric: ~$200K-$1M+ annual infra cost vs. near-zero on a general rollup. Ideal for: Well-funded teams (Series A+) with a product-market fit that justifies the isolation.

Optimized for ecosystem density: Hosts multiple protocols (e.g., Uniswap, Aave, Maker) on a single chain, creating deep liquidity and composability. This matters for DeFi applications that require atomic interactions with other protocols. The shared sequencer model, as seen on Arbitrum One and OP Mainnet, provides unified security and network effects.

Lower fixed overhead: Development teams avoid the operational burden and cost of running a dedicated sequencer and validator set. Gas fees are shared across all users of the rollup, leading to predictable, low-cost transactions for end-users. This matters for startups and scale-ups who need to focus on product, not infrastructure, leveraging battle-tested clients like Arbitrum Nitro.

Tailored execution environment: Enables custom fee models, privacy features, and optimized virtual machines (e.g., SVM, MoveVM). This matters for high-frequency trading (HFT) dApps or gaming protocols that require sub-second finality and cannot tolerate network congestion from unrelated apps. Projects like dYdX v4 (Cosmos) and Loot Chain demonstrate this specialization.

Maximizes value accrual: The app protocol retains 100% of sequencer fees and MEV, rather than leaking it to a general-purpose L2. This matters for token-driven ecosystems where sustainable treasury revenue is critical. Using frameworks like Eclipse or Caldera allows teams to deploy a custom rollup while leveraging Ethereum or Celestia for security.

No traffic isolation: A popular NFT mint or token launch on the same rollup can spike gas fees for all other applications, creating unpredictable costs. This is a critical trade-off for mission-critical financial applications that require consistent, low-latency execution regardless of network activity on other dApps.

Bootstrapping challenge: A new app-chain must attract its own liquidity and users, losing the native composability of a shared L2. This matters for new DeFi primitives that rely on existing token pools. Bridging solutions like LayerZero and Axelar add complexity and security assumptions to reconnect to the broader ecosystem.

Maximizes network effects by hosting multiple dApps (e.g., Uniswap, Aave, MakerDAO) on a single chain. This enables seamless composability and shared liquidity (e.g., $1B+ TVL on Arbitrum One). Ideal for protocols requiring deep integration with a broad DeFi stack.

Eliminates the overhead of deploying and securing a dedicated chain. Teams leverage shared sequencers, shared data availability layers (e.g., Celestia, EigenDA), and existing validator sets. Best for early-stage projects or those with sub-$100K annual security budgets.

Performance is shared and non-guaranteed. A popular NFT mint or meme coin on the same rollup can spike gas fees and delay your transactions (see Base's surge pricing). Unsuitable for applications requiring predictable, sub-second finality under all conditions.

Full control over the execution environment. Enables custom fee markets, virtual machine (e.g., SVM, MoveVM), and throughput (10K+ TPS for a dedicated DEX). Critical for high-frequency trading apps (e.g., dYdX v4) or gaming worlds needing deterministic performance.

Direct revenue capture from sequencer fees and potential MEV. The app chain retains value that would otherwise leak to a general-purpose L2. Essential for business models where transaction revenue is a primary income stream.

Requires a dedicated devops team to manage sequencers, provers, and bridge security. Initial setup costs can exceed $500K+ using stacks like Arbitrum Orbit or OP Stack, with ongoing data availability fees. A significant commitment for core protocol teams.