Smart Contract rollups are the kind of rollups where the execution of transactions is only handled on the rollup chain, and the rest of the operations, like consensus & DA and settlement, still happen on the Ethereum layer. 

After executing the transaction on the rollup chain, they send the batched transaction data to Ethereum. Hence, we are saying they use the Ethereum layer for data availability. Again, the validity proofs/fraud proofs are sent to a settlement contract on the Ethereum layer. We call it Smart Contract rollup because your settlement is happening in Ethereum. 

So, basically, they can inherit the security and decentralization of Ethereum while scaling their applications using rollup chains. 

All the rollups we are building with OP Stack, Arbitrum Orbit, and Polygon CDK – are smart contract rollups.