Are you tired of high gas fees and slow transaction speeds on Ethereum? You're not alone. The explosive growth of decentralized applications (dApps) and the rise of decentralized finance (DeFi) have put a strain on the Ethereum network, making it increasingly difficult for users to conduct transactions quickly and cheaply.
But don't worry, there's a solution: ZK Rollups.
According to recent statistics, the number of daily transactions on Ethereum has skyrocketed from an average of 500,000 in early 2020 to over 1.5 million in early 2021. This surge in activity has resulted in a dramatic increase in gas fees, with the average transaction cost reaching an all-time high of over 1,000 gwei in February 2021.
In this blog, we'll dive deep into the world of ZK Rollups, exploring how they work, their benefits and limitations, and their potential to transform the future of decentralized applications and finance. So buckle up, and get ready to discover the power of ZK Rollups.
What are ZK Rollups?
ZK Rollups are a layer-2 scaling solution for Ethereum that enables highly scalable and efficient transaction processing. In a ZK Rollup, multiple transactions are bundled together into a single transaction, which is then processed off-chain using zero-knowledge proofs (ZKPs).
The ZKP is a cryptographic technique that allows for the verification of a statement without revealing any information beyond the statement's truth. This enables a highly efficient and secure way to process transactions off-chain while maintaining the same level of security and trustlessness as the Ethereum network.
The basic idea behind ZK Rollups is to bundle multiple transactions into a single transaction that is submitted to the Ethereum network. The transactions are processed off-chain using ZKPs, which generate proof that the transactions are valid and that the resulting state is correct.
Once the proof is generated, it is submitted to the Ethereum network, along with the hash of the new state. This allows the Ethereum network to verify the correctness of the proof and update the state of the system, all without having to process each individual transaction on-chain.
By processing multiple transactions off-chain and bundling them into a single transaction, ZK Rollups can achieve significant scalability improvements compared to the standard Ethereum network. Early adopters of ZK Rollups have already achieved up to 100x scalability improvements, making them a promising solution for the future of Ethereum and decentralized applications.
In what way do zk rollups interact with Ethereum?
ZK Rollups interact with Ethereum by using the Ethereum network as a security and settlement layer. In a ZK Rollup, multiple transactions are bundled together and processed off-chain using zero-knowledge proofs (ZKPs), which generate proof that the transactions are valid and that the resulting state is correct.
Once the proof is generated, it is submitted to the Ethereum network, along with the hash of the new state. This allows the Ethereum network to verify the correctness of the proof and update the state of the system, all without having to process each individual transaction on-chain.
In this way, ZK Rollups leverage the security and trustlessness of the Ethereum network while achieving significant scalability improvements by processing multiple transactions off-chain and bundling them into a single transaction. This interaction between ZK Rollups and Ethereum enables highly scalable and efficient transaction processing on the Ethereum network, making them a promising solution for the future of Ethereum and decentralized applications.
How do ZK rollups fees work?
In a zk rollup, users submit transactions to an off-chain coordinator, which aggregates them into a single transaction that is published on-chain. The published transaction includes cryptographic proofs that ensure the validity of all the transactions included in it.
Fees in a zk rollup are paid in the native token of the blockchain where the rollup is implemented (usually Ethereum). When a user submits a transaction to the coordinator, they include a fee that is paid in the native token. The fee is used to incentivize the coordinator to include the transaction in the rollup and to cover the cost of the on-chain transaction that publishes the rollup.
The fee structure in a zk rollup can be different from that of a traditional blockchain. For example, instead of paying a variable fee based on the gas used in a transaction, users may pay a fixed fee based on the number of transactions they submit to the coordinator.
Because a zk rollup aggregates many transactions into a single on-chain transaction, it can reduce the overall fees paid by users compared to making all the transactions on-chain.
Additionally, because the coordinator has to pay a fee for each on-chain transaction it submits, it has the incentive to batch transactions and minimize the number of on-chain transactions it submits. This can further reduce the overall fees paid by users.
How do ZK rollups works?
ZK Rollups are a Layer 2 scaling solution that can significantly increase the scalability of Ethereum by processing many transactions off-chain and then publishing a single compressed proof of those transactions on-chain. Here's a simplified explanation of how they work:
Off-chain processing: ZK Rollups allow for processing many transactions off-chain in a "rollup" smart contract. This smart contract is responsible for executing the transactions and keeping track of the resulting state changes.
Batched compression: Once a certain number of transactions have been processed off-chain, their state changes are compressed into a single "proof" using a cryptographic technique called zero-knowledge proofs. This proof is then submitted to the Ethereum mainnet.
On-chain verification: The Ethereum mainnet verifies the proof and executes the resulting state changes, effectively settling many transactions at once. Since only a single proof is submitted to the mainnet, this significantly reduces the cost and time required to process each transaction.
Withdrawals: Users can withdraw their funds from the rollup by submitting proof of their ownership of the funds. The rollup smart contract verifies the proof and executes the withdrawal on-chain.
zkEVM AND zk-Sync
zkEVM and zk sync are different implementations of the same fundamental technology, zero-knowledge proofs.
zkEVM
zkEVM, or Zero-Knowledge Ethereum Virtual Machine, is a layer 2 scaling solution for Ethereum that enables faster and cheaper transactions while maintaining the security and trustlessness of the Ethereum network.
ZkEVM accomplishes this by utilising zero-knowledge proofs, a cryptographic technique that enables one party (the prover) to demonstrate to another party (the verifier) the truth of a particular statement without disclosing any information beyond the statement's truthfulness. In the context of zkEVM, zero-knowledge proofs are used to prove the validity of transactions without actually executing them on the Ethereum blockchain.
In zkEVM, transactions are processed off-chain in a separate computation environment, known as a zk rollup. This rollup maintains a compressed version of the Ethereum state, which includes the account balances and smart contract code, among other things. zkEVM leverages the power of zero-knowledge proofs to ensure that the state of the rollup is always valid and consistent with the state of the Ethereum blockchain.
When a user wants to make a transaction on the Ethereum network, they submit the transaction to the zk rollup instead of the main Ethereum network. The zk rollup then processes the transaction off-chain, using zero-knowledge proofs to verify its validity. Once the transaction has been validated, the zk rollup generates proof that attests to the transaction's validity. This proof is then submitted to the Ethereum blockchain, where it is verified by the Ethereum network.
By using zkEVM, transactions can be processed much faster and at a much lower cost than they would be on the Ethereum mainnet. This is because zkEVM only requires a small amount of data to be submitted to the Ethereum blockchain, rather than the entire transaction. Additionally, zkEVM is highly scalable, as it can process thousands of transactions per second.
zk-Sync
zk sync is a cutting-edge implementation of Zk rollups specifically designed to support high-frequency transactions on the Ethereum network. Using zero-knowledge proofs, zk sync can process up to 300 transactions per second, all while maintaining the security and trustlessness of the Ethereum blockchain.
Like other zk rollup implementations, zk sync uses a separate computation environment, known as a rollup, to process transactions off-chain. The rollup maintains a compressed version of the Ethereum state, which includes the account balances and smart contract code, among other things. zk sync uses zero-knowledge proofs to ensure that the state of the rollup is always valid and consistent with the state of the Ethereum blockchain.
When a user wants to make a transaction on the Ethereum network, they submit the transaction to the zk sync rollup instead of the main Ethereum network. The zk sync rollup then processes the transaction off-chain, using zero-knowledge proofs to verify its validity. Once the transaction has been validated, the zk sync rollup generates proof that attests to the transaction's validity. This proof is then submitted to the Ethereum blockchain, where it is verified by the Ethereum network.
An important feature of zk sync is its support for complex smart contracts. While zk sync is optimized for high-frequency transactions, it can still execute any smart contract that can be performed on the Ethereum mainnet. This makes it a versatile solution for a wide range of use cases.
Pros and Cons of zk Rollups
Pros:-
Scalability: zk rollups can significantly increase the throughput of the Ethereum network by processing transactions off-chain, which can greatly reduce congestion and improve transaction times.
Cost-Effective: zk rollups can be significantly cheaper than transactions executed directly on the Ethereum blockchain since they only require a small amount of data to be submitted to the mainnet.
Security: zk rollups are highly secure, as they use zero-knowledge proofs to ensure the integrity of the off-chain computation environment, and users have control over their own assets and private keys.
Flexibility: zk rollups can support complex smart contracts, and can be used to scale various kinds of decentralized applications on Ethereum.
Cons:-
Limited Number of Rollups: There is a limit to the number of rollups that can be used to scale the Ethereum network, which can limit the scalability of the entire ecosystem.
Decentralization: The level of decentralization in a zk rollup depends on the design of the system, with some models requiring a certain level of trust in the rollup operator.
Complexity: Implementing zk rollups can be complex, requiring specialized knowledge of cryptography and zero-knowledge proofs.
Latency: There can be a delay between the time that a transaction is submitted to the rollup and the time that it is confirmed on the Ethereum blockchain.
Wrapping Up
In conclusion, zk-rollups are a promising solution to the scalability challenges facing blockchain technology today. By enabling secure and efficient off-chain processing of transactions, zk-rollups have the potential to dramatically increase the throughput and reduce the costs of blockchain transactions. With its innovative use of zero-knowledge proofs, zk-rollups offer a level of privacy and security that is unmatched by other scaling solutions. As blockchain adoption continues to grow, zk-rollups will undoubtedly play a key role in shaping the future of decentralized finance and other blockchain-based applications. So if you're looking to stay ahead of the curve in the fast-evolving world of blockchain, be sure to keep an eye on zk-rollups!