On our ZK rollups news today, you should know that enhanced blockchain scalability is one of the primary advantages offered by ZK Rollups. By taking the larger chunk of the transaction data off-chain and only settling finality on the Ethereum mainnet, ZK Rollups massively increase the number of transactions processed per second. This scalability solution is critical to Ethereum’s long-term viability, particularly as the network expands and the demand for processing power grows.
The scalability benefits provided by ZK Rollups are not just theoretical. In real implementations, they have demonstrated the ability to handle thousands of transactions per second, significantly above the Ethereum mainnet’s current capacity.
This makes them an excellent choice for decentralized applications (DApps) with significant transaction throughput, such as decentralized exchanges, gaming platforms, and large-scale enterprise apps. To grasp more about how blockchain scalability improves with ZK-Rollups and their impact on the Ethereum network, read on.
What Are ZK-Rollups?
ZK-rollup is a layer 2 scaling solution that speeds up transaction processing by moving them off the main blockchain (off-chain), while still recording transaction data on the main blockchain (on-chain). It uses ZK-proofs to ensure that these transactions are valid without disclosing any personal information.
Currently, 11 active ZK-rollups have over $1 billion in total value locked in, with zkSync, dYdX, and Starknet being the most popular implementations.
How Do ZK-Rollups Work?
ZK-rollups operate using a smart contract on the layer 1 blockchain. This smart contract is vital because it keeps an authoritative record known as the state root.
1. State Root
The state root is a Merkle tree containing batches of data from the rollup’s accounts, balances, and contract code. Users, like the sequencer, submit new batches (compressed collections of transactions) as well as old and new state roots (pre- and post-state roots). The smart contract then compares the old state root to the current root. If they match, the current version is switched to the new state root.
2. Deposits & Withdrawals
Naturally, rollups must allow inputs and outputs from the “outside” in order to facilitate withdrawals and deposits. The transaction that uploads the batch with “outside” inputs transfers assets to the smart contract. When the transaction sends a batch that includes “outside” outputs, the contract starts the withdrawal procedure. As a result, the underlying smart contract synchronizes state changes between the base layer and the rollup.
3. Post-State Verification
In an attempt to verify the post-state root, previously, a malevolent actor may submit any version of the state root (for example, by transferring ETH to their account). However, rollups have solved this issue in two distinct ways: validity proofs and fraud proofs. As a result, we have two schemes: zero-knowledge and optimistic rollups.
4. Validity Proofs
ZK-rollups use validity proofs to verify that no manipulations occur in the post-state root. As a result, each new batch of transactions includes a zk-SNARK (or zk-STARK), which is a knowledge argument that ensures the batch computation yields the same result as the new state root. And, most importantly, the incredibly sophisticated arithmetic behind ZK-proofs allows even the most complex computations to be confirmed quickly on-chain.
Key Features Of ZK-Rollups
ZK-rollups stand out for their validity proofs and on-chain data availability.
1. Validity Proofs
These are checks performed by zero-knowledge proofs, a type of cryptographic proof that may quickly confirm the result of a computation without disclosing specific details about that calculation. There are other sorts of proofs, such as zk-SNARKs and zk-STARKs, each with distinct qualities.
2. On-Chain Data Availability
While actual transactions are handled off the main blockchain, ZK-rollups ensure that some critical data is stored on the main (layer 1) blockchain. ZK-rollups are versatile and rely on this storage for consensus. This configuration allows anyone to independently verify all of the transactions in a rollup, and it is even compatible with Ethereum’s Virtual Machine, allowing it to serve a wide range of applications.
How ZK-Rollups Improve Blockchain Scalability
1. Enhanced Security
The security guarantee that the user can always return the asset to layer 1 is a key component of ZK-rollups. Other layer 2 solutions do not provide that assurance, which makes this crucial. For instance, in the event that data availability is compromised, Validiums may lose assets.
Since ZK-rollups won’t experience any issues with data availability, attackers won’t be able to do significant harm. Additionally, one major benefit of rollups over other L2 systems is that data availability eliminates the requirement to map assets to owners.
2. Off-Chain Computation, Reduced Gas & Data Compression
Rollups (both ZK and optimistic) do not fully implement layer 2 scaling, in contrast to plasma and validiums. Specifically, rollups don’t offer 100% off-chain data storage. Rather, they only transfer computation and state storage off-chain. As a result, the rollup solution’s scalability is constrained by the underlying blockchain’s data bandwidth.
Rollups nonetheless provide a significant improvement above the base layer in spite of this. For instance, the approval of an ERC20 token on Ethereum requires 45,000 gas, but the majority of rollups require less than 300 gas. Additionally, transaction data is compressed by a rollup.
A rollup requires 12 bytes, whereas an ETH transmission typically requires 110 bytes. In this case, the signature compression offers the biggest size decrease. A signature on Ethereum requires 68 bytes. In contrast, a rollup can reduce the size to 0.5 bytes by batching about 100 transactions under a single signature.
Challenges in ZK Rollup Development
1. Technical Complexity
By carrying out computation off-chain and posting the data on-chain, Zero-Knowledge (ZK) Rollups are a kind of layer-2 scaling solution that seeks to increase blockchain networks’ throughput while preserving security. However, there are many technological issues that can present serious difficulties in the production of ZK Rollups.
The development and application of zero-knowledge proofs themselves are among the main technological obstacles. In order to guarantee the validity of state transitions executed off-chain without disclosing any underlying data, these proofs are crucial.
Many developers may find it difficult to generate these proofs since they demand a thorough understanding of sophisticated cryptography techniques. Another level of complexity is added when these proofs are optimized to make sure they are effective enough for real-world application in a blockchain setting.
Furthermore, the integration of ZK Rollups with current blockchain infrastructures presents another technological challenge. In order to preserve compatibility and security, this frequently entails major modifications to network protocols and cautious handling. The rollups must be able to handle upgrades, maintain consistent synchronization with the main chain, and handle any differences between off-chain calculations and on-chain data.
2. Data Availability Issues
One of the biggest obstacles to the deployment and operation of ZK Rollups is data availability. This problem relates to the requirement that all network participants have access to all data required for validating state transitions. Issues like fraud or the acceptance of erroneous state transitions may arise if information about transactions executed off-chain is not easily accessible on-chain.
The primary issue here is the possibility of block producers concealing data, which might jeopardize the system’s overall security and integrity. ZK Rollup solutions frequently need complex processes to ensure data availability in order to mitigate this. This could involve using external data availability layers or posting data on the main blockchain.
Moreover, giving an assurance of data availability while maintaining efficiency and scalability is a tricky balancing act. The goal of employing rollups for scalability can be undermined by congestion caused by an excessive amount of data on the chain. On the other hand, insufficient data can make the system vulnerable to assaults or functional failures.
These constraints underscore the necessity for continued research and development in the field of ZK Rollups to solve these complex concerns efficiently and provide strong, scalable, and secure blockchain networks.
3. Adoption Barriers
Despite their potential to improve scalability and privacy on blockchain networks, Zero-Knowledge (ZK) Rollups encounter a number of adoption obstacles. The complexity of the technology is one of the main obstacles.
The core of ZK Rollups is ZK proofs, which use sophisticated cryptographic methods that can be challenging for consumers to comprehend and for developers to implement. Adoption may be hampered by this complexity since stakeholders could favor easier, more recognizable alternatives.
The expense and resource intensity of producing ZK proofs is another major obstacle. ZK Rollups can lower blockchain transaction costs, but the initial setup and continuing upkeep of the required infrastructure can be costly and technically challenging.
Furthermore, the adoption of ZK Rollups is significantly influenced by regulatory ambiguity. ZK Rollups may come under investigation from regulators worried about money laundering and other illegal actions because they can anonymize transaction data. Businesses may be deterred from incorporating ZK Rollups into their systems by unclear laws because they are concerned about potential legal issues.
Real-World Instances of ZK Rollup Application
1. Ethereum’s zkSync
One well-known example of ZK Rollup technology being used in practice, particularly in the Ethereum ecosystem, is zkSync. Developed by Matter Labs, zkSync intends to overcome the scalability issues of Ethereum by employing zero-knowledge proofs to enable scalable, low-cost transactions without sacrificing on security.
The way zkSync works is by combining several transactions into one and producing a cryptographic proof called a SNARK (Succinct Non-interactive Argument of Knowledge), which the Ethereum mainnet verifies. This procedure guarantees that the rollup’s state is always fully accessible and verifiable on the Ethereum blockchain, upholding the mainnet’s security guarantees while drastically lowering transaction costs and boosting throughput.
Significant practical ramifications have resulted from zkSync, especially for systems that demand high transaction throughput. For instance, the Gitcoin Grants platform has incorporated zkSync to manage donations throughout their crowdfunding rounds, allowing them to process transactions more cheaply and effectively.
Argent, a well-known Ethereum wallet, has also included zkSync to provide its consumers quicker and less expensive transactions. This practical implementation highlights ZK Rollups’ usefulness and their potential to promote wider blockchain technology adoption. You can read case studies about zkSync’s implementation on sites like GitHub or Medium, or visit the official zkSync website for further information.
2. Loopring
This decentralized exchange (DEX) protocol called Loopring uses zero-knowledge proofs (ZKPs) to improve privacy and scalability. It seeks to integrate the finest features of centralized and decentralized exchanges and runs on the Ethereum blockchain. Loopring maintains the security and transparency inherent in blockchain technology while enabling high throughput through the use of ZKPs.
The protocol combines several transfers into a single transaction using a technique known as zkRollups. As a result, the Ethereum network’s computational load and gas costs are greatly decreased. In addition to increasing transaction speeds, Loopring’s strategy lowers the barrier to entry for customers by lowering expenses. Additionally, it guarantees that users maintain ownership over assets, reducing the possibility of exchange hack theft.
3. StarkWare’s StarkEx
StarkWare’s StarkEx is yet another unique solution that uses zero-knowledge proofs, notably STARKs (Scalable Transparent ARguments of Knowledge), to scale blockchain applications. StarkEx aims to improve Ethereum’s scalability by processing transactions off-chain and then settling them on-chain in a compressed format. This technique is especially useful for high-volume applications, such as trading platforms and gaming.
This domain has been adopted by several important sites, including dYdX, a well-known decentralized derivatives trading platform. Using StarkEx, dYdX was able to greatly boost transaction throughput while maintaining security and decentralization. The usage of STARKs ensures that the data integrity and privacy of transactions are maintained, making it a strong method for scaling Ethereum.
Our Takeaway
To summarize, ZK-rollups is a layer 2 scaling solution that employs validity proofs for off-chain processing while retaining a minimal amount of transaction data on the blockchain.
The key disadvantages of ZK-rollup operations are the difficulty of SNARK-proving and the availability of on-chain data, making them less appealing as a general-purpose EVM. As a result, optimistic rollups dominate market adoption.
Furthermore, even the most prominent ZK-rollup projects, such as zkSync Era, Starknet, and Loopring, are still in their early stages of development and do not run autonomously. However, the future of ZK-rollups looks quite promising.
Advances in complicated zero-knowledge technologies will make ZK-rollups more suitable for EVM and universal applications. ZK-rollups are ideal for layer 2 scalability due to their privacy-preserving feature, rapid withdrawals, and cheaper per-on-chain transaction costs.
