As blockchain technology has reached new levels of popularity and sophistication, most experts have come to the realization that bigger networks are not necessarily adapted for an unlimited number of simultaneous active participants, therefore they require additional “scaling” solutions to help upkeep proper maintenance and operational state.
In this article, we will focus on the Ethereum network, in particular its implementation of the so-called ZK-rollup scaling solution.
Ethereum scaling solutions basics explained
The main goal of Ethereum scaling solutions is to advance transaction speed and lower gas fees without compromising the decentralization and/or security that Ethereum offers on its base layer. Higher scalability tends to increase throughput alongside network capacity as transactions are loaded off-chain.
Source: Medium
On-chain scaling is possible via Ethereum mainnet. By increasing the limit of processed data in a block, the network is able to fit more transactions in between each interval; however, it may lead to network congestion and increased hardware requirements; sharding - the practice describing the process of splitting ETH database - is to be introduced after the Ethereum 2.0 launch.
Off-chain, or Layer 2, scaling solutions are designed to provide scalability for the core blockchain via adding more layers to the transaction finalization process. Not only do Layer 2 solutions retain the same decentralization as Ethereum, but they also help make the second-largest cryptocurrency network more accessible to international users.
Therefore, let’s take a quick look at several Ethereum off-chain scaling solutions being actively explored by users.
Sidechains
An independently run stand-alone blockchain connected to the Ethereum network by a bridge is called a sidechain. This type of solution does not share the same type of security as its primary blockchain nor does it share state updates and transaction information with ETH mainnet.
Designed to solve the blockchain trilemma (decentralization, security and scalability) sidechains run on their own consensus algorithm.
N.B. Check out GetBlock’s guide on Polygon (the Matic Network) - an industry-leading Ethereum sidechain with a booming ecosystem
Plasma chains
Plasma chains (often referred to as ‘child chains’) are “anchored” to ETH mainnet via a root contract. They utilize block validation methods independently and implement the fraud-proof security model to solve disputes.
State channels
This type of scalability solution allows participants to perform secure off-chain transactions with minimum guidance from Ethereum mainnet. The ability of state channels to settle multiple transactions while only being required to submit two transactions to the core blockchain with the aim of opening and closing the channel allows for top-tier throughput and reduced fees.
Rollups: what is a rollup in crypto?
Rollups are intended to execute transactions off-chain and report the state data back to ETH mainnet. The technology is designed to comprehend rollups (batches) of transactions. Some of the more popular types of rollup solutions include Optimistic rollups and Zero-Knowledge knowledge rollups.
N.B. Learn more about Optimism network - a popular L2 scalability solution utilizing optimistic rollup technology. Via GetBlock’s guide, you will learn how to benefit from fraud proofs-reliant security and get hold of near-instant and cheap transactions. Also, this Arbitrum guide by GetBlock will tell you more about one of the most utilized scalability solutions for Ethereum.
Watch this video to understand the difference between Layer 2 scaling solutions types.
How do rollups work?
Optimistic and ZK-rollups utilize similar underlying architecture. In its simplest form, rollups let users bridge their assets on to the L2 network of choice, which in turn finalizes the transaction, and offers the option of sending your funds back to ETH mainnet once the process is complete.
What are Ethereum rollups?
Ethereum-compatible rollup solutions let users benefit from EVM-based capabilities without having to pay gas fees, which are getting progressively more expensive.
Ethereum rollups essentially mean EVM-compatible scaling solutions working directly with ETH mainnet.
What is a ZK-rollup?
ZK (zero-knowledge) rollups are an increasingly popular scalability method within the Layer 2 category. The technology puts (rolls up) transactions into batches and executes them off-chain. Being smaller in size (28 bytes), transaction batches allow for faster speed and reduced costs. ZK-rollups utilize validity proofs to demonstrate cryptographic assurance of the changes in the bundle, also known as a SNARK (Succinct Non-Interactive Argument of Knowledge).
Source: Medium article
We are going to pinpoint some of the most obvious pros and cons of ZK-rollup technology:
Benefits
- ZK-rollups offer quicker speed compared to other scaling solutions
- Guaranteed fast transaction finality
- Implementation of a trustless cryptographic security mechanism
- No delay withdrawals unlike optimistic rollup
- Backed up by top-tier decentralization and security from Ethereum
- Data compression results in reduced costs
- No requirement for chain validation to protect users’ funds
Drawbacks
- Unverifiable trust assumed by the security method may be compromised if mishandled
- ZK-rollups validity proof verification is costly
- Complexity of ZK-rollups technology requires high-performance hardware
- Initially promotes a centralized setup
ZK-rollups vs optimistic rollups comparison
Unlike optimistic rollups, zero-knowledge technology is only required to deliver the proof of validity at the finalization phase, thus smart contracts deployed to leverage ZK-rollups do not post transactional information on-chain.
Generally speaking, ZK-rollups are more advanced and tech-savvy. Despite a longer smart contract implementation in comparison to optimistic rollups, the scaling solution is well developed and can be utilized by all EVM-compatible dApps.
Nevertheless, the majority of analysts agree that optimistic rollups is a promising solution for developers wanting to migrate their projects on to ETH 2.0 before the Merge is fully realized. This gives ZK-rollups enough time to develop into a fully-fledged technology.
FAQ
What are rollups in crypto?
Rollups are designed to settle transactions outside Layer 1 networks with the aim of offloading the activity on the core blockchain. After the data is collected and sent back to the main network, the consensus is reached and a transaction becomes finalized. Rollups are backed up by native ETH security.
Which tokens are ZK-rollups?
Zk rollup cryptocurrencies utilize ZK-rollup-based technology to provide faster and cheaper transactions for users. The list includes Syscoin (SYS), Loopring (LRC), Immutable X (IMX), etc.
Is Polygon a ZK-rollup?
Polygon offers ZK-rollup technology for the network’s users. Moreover, the platform is launching its own version called zkEVM, which enables the capability of deploying ETH smart contracts while retaining full EVM compatibility.
What are the top ZK-rollups?
Currently, the list of the most popular ZK-rollup projects consists of Polygon One, Syscoin, dYdX, Immutable X, Loopring, and so on. It is recommended that you do your own research before committing to any of the services where you are required to spend money.
Closing thoughts
Ethereum scaling solutions have already contributed to the mass adoption of blockchain technology on a global scale. ZK-rollups could be the next big thing, as more and more users start implementing the promising technology into their projects.
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