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There are two types of rackup files, config.ru and .ru.
Run the standard config.ru file with:
$ rackup config.ru -p 3000
The run command will instance eval inside Rack. The other option is to capture the lambda in a constant which Rack can hold on to and call.
$ rackup app.rb -p 3000
The are mostly equivalent, config.ru is the most popular method.
Sinatra will handle auto-reloading of code, however you may use shotgun (gem install shotgun) for rack apps and sinatra as well.