Only a few years ago ZK rollups were the stuff of myth, with the likes of Vitalik Buterin, Ethereum co-founder and main figure, predicting that it would still be at least a decade away.
Fast forward to 2023, and a whole industry of incoming projects is vying for pole position in the race for Layer-2 supremacy, all hoping for a chance to mirror (nay, exceed) the wild success that other Ethereum scaling solutions such as optimistic rollup chains Arbitrum, Optimism, and Polygon have enjoyed since last year.
It’s no secret that ZK rollup technology is from a technical perspective superior to that of the slower OR tech, therefore the slew of incoming protocols commands attention.
In this article, we’ll take a look at ZK Rollup technology, the current frontrunner projects pushing its boundaries, and what the future holds for them.
What Are ZK Rollups?
Zero-knowledge rollups, or ZK rollups, are an exciting new scaling technology that helps blockchain networks like Ethereum in particular process transactions more quickly and reduce overall transaction costs.
Instead of processing a batch of blockchain transactions individually, ZK rollups bundle them all together into a single “batch” and do the processing off the main blockchain. This saves a lot of space and makes everything run smoother.
To ensure security and trust, ZK rollups also create a special type of proof. This proof acts as a digital signature, showing the batch of transactions is valid and correct, without revealing any private information. Using these proofs, ZK rollups can speed up transactions while keeping the network safe and reliable. It’s a great way to help blockchain networks handle more users and grow without getting bogged down.
Why does Ethereum need layer-2 chains?
Success is a bittersweet taste for most blockchains due to the so-called blockchain trilemma, which posits that huge tradeoffs must be made when a chain scales significantly.
Ethereum in particular has historically struggled with scaling issues. As the popularity of Ethereum and its use cases continue to grow, the network has become increasingly congested, leading to high fees and slow transaction times. This has limited the scalability of the network, making it difficult for developers to build decentralized applications (dApps) that can handle large numbers of users.
Layer-2 networks offer a potential solution to these scaling issues. These networks operate on top of the Ethereum mainnet and enable developers to build dApps with higher throughput and lower fees. By moving some of the computation off the main Ethereum chain and onto a secondary network, layer-2 networks can significantly increase the capacity of the system.
One of the most promising layer-2 solutions is the use of sidechains. Sidechains are separate chains that operate alongside the main Ethereum chain and are connected to it. Transactions can be moved from the main chain to a sidechain, where they can be processed more efficiently and at a lower cost. Once the transaction has been processed on the sidechain, the result can be moved back to the main chain, where it is recorded on the blockchain.
How Do ZK Rollups Work?
Building on the concept of ZK rollups, these solutions make crypto transactions faster and more efficient. Instead of putting every single transaction on the main blockchain (layer 1), they group a bunch of transactions together and process them off the main chain (on layer 2). This is like taking a shortcut to avoid traffic and get to your destination faster.
The grouped transactions are like a package deal and are checked and verified by the main blockchain using some fancy math called zero-knowledge proofs. This ensures everything is accurate and secure without the need for the main blockchain to go through every single transaction.
In order to maintain organization and security, there’s a smart contract on the main blockchain that keeps track of these grouped transactions. When someone wants to make a transaction, it gets sent to a special operator (like a traffic controller) who puts it together with other transactions and sends it off to the main blockchain.
These operators can either be a single, centralized controller or a group of validators who take turns handling the transactions. This system makes transactions cheaper and faster, helping the whole crypto network work better and paving the way for even more advanced and secure blockchain technology.
ZK Rollups vs Optimistic Rollups
Transitioning to another Layer 2 solution, optimistic rollups are very similar but distinctly different from ZK rollups. They help speed up transactions on the blockchain but have a different method of making sure everything’s accurate and secure.
Instead of using validity proofs like ZK rollups, optimistic rollups use a “trust but verify” approach. They assume everything is correct unless a user claims otherwise. When a group of transactions is sent to the main blockchain, there’s a time window called the challenge period. During this time, anyone can show proof there’s an issue and have it corrected.
If someone finds a problem and proves it, the transaction gets rechecked and fixed. If nobody finds a problem with the transactions by the end of the challenge period, everything is considered valid and accepted on the main blockchain.
This challenge period means that moving funds from an optimistic rollup back to the main blockchain takes longer, usually about a week. To avoid this waiting period, some users can pay a small fee to liquidity providers who help speed up the process.
Optimistic rollups have been adopted a bit faster than ZK rollups because they’re simpler and have a lower chance of delivering bugs. However, some people believe that ZK rollups might be the better long-term solution because they use cryptographic proofs to verify transactions.
How Do ZK Rollups Guarantee Privacy?
Moving on to the privacy aspect, ZK rollups generate a special type of proof called a ZK-SNARK to ensure that transactions are valid. The ZK-SNARK proof is created using complex mathematical calculations that are designed to be difficult if not impossible to solve.
Once the proof is generated, it can be easily verified by anyone on the blockchain without revealing any private information or the transaction’s computation.
“Computation” refers to how ZK rollups generate proofs. This involves performing complex computations on encrypted data and generating a ZK SNARK that proves the validity of the computation.
Popular ZK Rollup Blockchains and Projects
As we explore the growing field of ZK roll-up technology, here are the top ZK rollup blockchains and projects that have improved user experiences in wallets, decentralized exchanges, and dApps.
StarkNet is a permissionless decentralized ZK rollup that operates as a Layer 2 network over Ethereum. It reduces costs and increases transaction speed by orders of magnitude compared to Ethereum, making it ideal for transaction-heavy dApps.
Its advantages include the following:
- 100x lower gas fees than Ethereum Mainnet transactions
- Bundled data processing off-chain
- General-purpose smart contract platform for anyone to develop and deploy applications
All transactions on StarkNet are periodically batched and used to generate a STARK proof to prove their validity. A STARK proof replaces the ZK-SNARK to make transactions that allow anyone to verify the computation but are still unable to view sensitive information. STARK stands for “Scalable, Transparent, Adaptable, and Resilient Knowledge proof.”
- VISA-like transaction speeds
- Fully noncustodial system with user permissions
- Full compatibility with Ethereum’s smart contracts
Unlike some other Layer 2 solutions, zkSync does not require users to deposit their funds into a custodial account or trust a third party with their assets. Instead, users retain control of their assets at all times and can withdraw them to the Ethereum mainchain whenever they want.
Generating proofs can be computationally intensive and time-consuming. However, some ZK rollup solutions, like Polygon Zero, the popular Ethereum scaling solution’s EVM-equivalent network, use an advanced cryptographic technique called recursive proofs to speed up the process.
In simpler terms, Polygon Zero generates ZK SNARK proofs for multiple transactions in a single computation, rather than generating one proof per transaction. This method reduces the amount of computation needed and makes the ZK rollup faster.
In just a few short years, ZK roll-up technology has gone from a distant possibility to a reality with multiple projects vying for supremacy in the Layer-2 race. The advantages of ZK rollups, such as faster transactions and lower fees, make it an attractive solution for Ethereum’s scalability issues. ZK rollups also use zero-knowledge proofs to ensure security and privacy while processing transactions off the main blockchain.
While optimistic rollups have been adopted faster due to their simplicity, ZK rollups offer cryptographic proofs for transaction verification, making them a potentially better long-term solution. Some of the top ZK rollup blockchains and projects, such as StarkNet, zkSync Era, and Polygon Zero, have improved the user experience for wallets, decentralized exchanges, and dApps. With the continued growth of Ethereum and its use cases, the future looks bright for ZK rollups and other Layer-2 solutions, but ZK rollups can easily become the most dominant scaling technology in the future if its main projects can continue to establish themselves without any hiccups.
Are ZK rollups censorship-resistant?
Yes, ZK rollups are designed to be censorship-resistant. Since they operate on decentralized networks like Ethereum and rely on cryptographic proofs for transaction validation, they’re resistant to tampering or manipulation by any single party.
Can other blockchains use ZK rollups?
Yes, other blockchains can use ZK rollups as a layer 2 scaling solution. Although ZK rollups are most commonly associated with Ethereum, they can be adapted and implemented on other blockchains that support smart contracts and have compatible architecture.
Is a ZK rollup a blockchain?
A ZK rollup is not a blockchain itself but a layer 2 scaling solution that operates on top of an existing blockchain (like Ethereum). It leverages the security of the underlying blockchain while providing faster and more efficient transactions through off-chain processing.
Are ZK SNARKs or STARKs better?
Both ZK SNARKs and STARKs have their advantages and disadvantages. ZK SNARKs typically have smaller proof sizes and faster verification times but require a trusted setup. STARKs, on the other hand, have larger proof sizes and slower verification times but don’t require a trusted setup and are considered more quantum-resistant. The choice between ZK SNARKs and STARKs depends on the specific requirements and trade-offs for a given project.