What Is the Security Trade-off Associated with the Challenge Period in Optimistic Rollups?

The challenge period, typically 7 days, is necessary to allow users to submit a fraud proof if an invalid state root is posted. The trade-off is between security and finality speed.

While it provides robust security by relying on economic incentives for honest behavior, it forces users to wait for the entire period before they can confidently withdraw funds to Layer 1. This delay is the primary limitation compared to ZK-Rollups.