The gas prices rise in tandem with the amount of decentralised apps (Dapps) built on the network and the number of transactions. Ethereum transaction fees soared to over $300 per transaction earlier in 2021, coinciding with a large increase in activity on the Ethereum network. In an attempt to tackle Ethereum’s scalability problem, Zero-Knowledge rollups are being developed to take some of the load off the blockchain network.
ZK-Rollups reduce congestion on the main Ethereum chain which leads to faster and cheaper transactions costs.
With less computing and storage resources contained on the main chain, fees are lowered since there is less demand, speed is also reduced since there is no backlog of transaction data.
ZK-Rollup works by combining hundreds of off-chain transaction data into a single transaction. The main chain then sends a SNARK (short noninteractive argument for knowledge) for verification to the main chain.
Matter Labs’ zkSync is a user-centric zkRollup platform. It’s an Ethereum scaling solution that’s already active on the mainnet.
A Layer-2 DEX with the AMM model based on zero knowledge rollups.
zkTube is a protocol for users and developers that uses ZK Rollup solutions to produce zero-knowledge proofs.
Open-source zero knowledge rollup that is optimised for Ethereum token transfers that are secure, low-cost, and usable.
Open-source platform where users can create secure, scalable and private private decentralised applications.
A Layer 2 ZK-Rollup that enables highly efficient, low-cost trading and transactions on Ethereum.
There are no delays when moving funds from layer 2 to layer 1 with a ZK-rollup because the funds have already been validated by a validity proof acknowledged by the ZK-rollup contract. They’re also more secure since the data needed to retrieve the state is stored on the layer 1 chain.
Another benefit is speed, the state is quickly validated after the proofs are submitted to the main chain, resulting in a faster finality time. ZK Rollups are also not vulnerable to the economic attacks that Optimistic rollups are.
ZK-Rollup works by combining hundreds of off-chain transaction data into a single transaction. The main chain then sends a SNARK (short non-interactive argument for knowledge) for verification to the main chain.
A ZK-Rollup, to put it simply, is a smart contract that combines hundreds of transactions from the main blockchain into a single transaction. A validity proof is then returned to the main blockchain.
This decreases the amount of data transferred over Ethereum’s main blockchain, allowing transactions to be completed faster and for less money.
Zero-Knowledge Rollups (ZK-Rollups) is a protocol that scales the Ethereum network by performing bundling and taking transaction data off the main blockchain, preventing the main chain from becoming congested.
ZK-Rollup works by taking hundreds of payments off-chain and mixing these into one transaction. The main chain then sends in a SNARK (succinct non-interactive argument for knowledge) to the main chain for verification.
Validation of a block using ZK-Rollups is faster since less data is included. ZK-Rollups have become a standard choice in layer2 building to enhance the scaling.
There are no delays when moving funds from Layer 2 to Layer 1 with a ZK-rollup because the funds have already been validated by a validity proof acknowledged by the ZK-rollup contract.
They’re also more secure since the data needed to retrieve the state is stored on the layer 1 chain.
Another benefit is speed, the state is quickly validated after the proofs are submitted to the main chain, resulting in a faster finality time.
ZK Rollups are also not vulnerable to the economic attacks that Optimistic rollups are.
Loopring is a protocol that allows developers to build Ethereum-based decentralised exchanges (DEXs) with fast transactions for crypto traders.
Loopring DEXs use the high-throughput advantage of ZK proofs to provide low-cost trade and payment on the Ethereum blockchain.
These DEX’s use ZK-Rollups to complete transaction settlements off-chain, rather than settling on the main Ethereum blockchain. This reduces the number of transactions sent to the Ethereum network, which prevents congestion, improves performance, and lowers trading prices.
According to the Ethereum founder, today’s average “large blockchain” has a high block frequency, block size, and transaction speed, but because to the high node operation costs associated with making big blocks, it also becomes very centralised.
Many Ethereum competitors, such as Solana, claim to have rapid transaction times yet require expensive gear to host nodes, prompting concerns about the degree of decentralisation.
Vitalik Buterin goes on to say that, while rollups improve block validation, they still lead to centralised block production, and that in a rollup-centric world, there are two likely outcomes: one in which “everyone migrates” to a single highly scalable rollup, or one in which network activity is spread across multiple solutions.
Vitalik claims that block production will remain centralised in both cases due to “network effects within rollups or network effects of cross-domain MEV.”
He does, however, mention that measures like committee validation, data availability sampling, and bypass pathways can be utilised to control the creation of new blocks.
The verification process is where the protocols differ, for example, ZK-Rollups use a cryptographic process to confirm transactions. Each group of transactions then submit a validity proof to the main blockchain.
On the other side, optimistic rollups assume that all transactions are legitimate and transmit transaction batches without any calculations. This results in a significant increase in scalability. There is, however, a challenge period during which anyone can query the legitimacy of any transaction.
If an anomaly is discovered, the rollup uses the data provided on Layer 1 to do fraud proofs (a check on transactions for suspected fraud). When compared to ZK-Rollups, the challenge period wait creates larger delays.
By paying sequencers, the optimistic rollup protocol encourages valid transactions (parties responsible for storing and executing user transactions off-chain). Sequencers that submit fake transactions to the Ethereum blockchain face a loss of their ETH share.
Because they don’t require sophisticated computations, optimistic rollups can provide a 100x gain in scalability. However, because of the challenge phase, they have a much longer withdrawal period than ZK-Rollups.
Another significant distinction is that optimistic rollups support smart contracts, which are difficult to execute with zero knowledge rollups.
ZkSync protocol is a premier layer-2 scalability offering from Matter Labs, which recently undertook a substantial Series B fundraising round that saw the firm unlock $50m in capital from major players such as Andreessen Horowitz, Consensys, ByBit and OKex.