This article analyzes how Ethereum using ZK-rollups sharding achieves a paradigm shift?

Author: Canti & Block unicorn

See how Ethereum sharding with ZK-rollups can become an unstoppable pragmatic force.

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Illustrates the scalability trilemma

The purpose of this pivot is that most of the execution (DeFi, NFTs, etc.) on the Ethereum network that we are used to today will move to the rollup instead of happening on mainnet. While L1's focus on speed and security over decentralization goes against the ethos of the industry, the same trilemma doesn't apply to rollups. They have inherited the security of mainnet Ethereum. With Ethereum handling the hard parts, Rollup is able to focus on the best execution layer possible.

You've probably heard of Optimism and Arbitrum by now, both of which are summaries of Optimism. On the horizon is another kind of rollup - ZK-rollups. There are a few cases of ZK-rollups alive, but they don't provide general-purpose computing EVM compatibility, or zkEVM. This won't be the case for long as zkSync 2.0, Scroll, StarkNet and others are all working on it and moving fast.

So why is this important? When Ethereum transitioned from a single chain to a modular system, it changed the dynamics of the competition. As twitter user polynya previously stated, L1 smart contract blockchains are no longer directly competing with ethereum; they are competing with rollups. I believe the advent of a general purpose ZK-rollup compatible with the EVM will lead to the obsolescence of not only optimistic rollups, but all other L1 smart contract blockchains as well.

Safety

Safety

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escape hatch

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(and why they're less scary)

I know in my intro I said I'd be covering the "best" that rollup has to offer... Before anyone blows that away here, I'll clarify the obvious: ideally a sequencer and full decentralization of provers. However, initially this was not the case. Most aggregations will start with varying degrees of centralization and gradually decentralize from there. That said, the fact that a centralized sorter in a rollup is much safer than a centralized one in an L1 chain is worth emphasizing.

When using a centralized orderer or pool of provers, you trade off trust and censorship resistance without compromising security. Sequencer operators cannot steal your funds, and you can withdraw to mainnet Ethereum at any time. In fact, you mostly rely on the central sequencer to keep things alive.

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Decentralized collator and prover

data availability

data availability

Data availability refers to the data that each Ethereum node needs to maintain. On-chain data storage is valuable where immutability is required, however, data capacity on Ethereum is limited and resource-intensive to maintain; storage does not come cheap!

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Ethereum Data Sharding

Sharding is a multi-stage upgrade to Ethereum. Sharding will act as a load balancer for the network's data storage needs, resulting in huge scalability gains at the rollup execution layer. Importantly, this also avoids high requirements for full nodes, keeping the network decentralized.

Initially, there will be 64 data shards or "shard chains". Ultimately, there will be 1,024 data shards. Data shards do not process transactions or smart contracts; instead, they provide additional data capacity for aggregation.

Rollups act as a form of transaction compression, occasionally publishing a single state root update to mainnet Ethereum containing the results of many different transactions that occurred at the rollup layer. Because they have to publish these state root updates to mainnet, aggregated gas fees are subject to fluctuations in blockspace demand; usually passed on to the aggregated user's cost (more on amortization in the section). Once sharding takes effect, the capacity will increase by nearly 20 times. This will make rollup operations cheaper and faster.

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Volitions

Volitions are ZK-rollups that contain a rollup chain and a validium instance. Volitions submit state roots and proofs to Ethereum like ZK-rollups, but they differ in that they allow users to choose whether they want or need to take advantage of on-chain data availability via a volition rollup or off-chain via a volition usability effectiveness. This is a tradeoff that only applies to ZK-rollup spaces; optimistic rollups do notVolitions。

An example of Volitions iszkSync 2.0：

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Adamantium

There are proposals like Adamantium, a trustless off-chain data availability solution, or TODA, which further seek to innovate the data availability space. They belong, so to speak, to the umbrella of the will. A snippet from the proposal:

"Adamantium is a self-sovereign data availability protocol...preserving the scaling benefits of off-chain data availability while removing all trust assumptions for any willing user. Willing to do what? Stay online? But if they're not online, they Funds are not stolen or frozen — instead, funds are transferred from L2 back to Ethereum addresses under the user’s control.”

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Transaction Cost and Throughput

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Summary Army

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Validity proof amortization (shared Gas)

Validity proof amortization refers to the number of transactions in each batch on ZK-rollup as it relates to the total gas cost of validation.

In this case, I'll give you a way to quickly internalize the concept of amortization. Keep in mind that this example is not mathematically exact for simplicity. The formulas I have provided are for illustration only; in reality, the breakdown of aggregated transaction costs is not that simple. That is, in our imagined scenario:

• Updating the state root requires accumulating 5,000,000 gas.

• Just like the mainnet, users need to pay gas fees when making aggregated transactions.

• The price per transaction follows a formula x = y / 5000000, where x is the price per transaction and y is the number of transactions in any given batch.

You should be able to infer:

• A single transaction costs 25,000 gas for a batch of 200 transactions.

• 100,The cost of a single transaction for a batch of 000 transactions is 50 gas, which is basically negligible.

As more and more people submit batches, the amortized cost of the transaction becomes cheaper. This is the exact opposite of monolithic blockchains, like Ethereum today, where as the number of active users increases, so does the demand for block space, causing gas prices to skyrocket.

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Most of the relevant information on volitions is contained in the previous Volitions section. Still, they are relevant to the aggregate throughput story, so it's worth mentioning them again. Brief recap:

• Volitions enable developers and users to take advantage of off-chain data availability in validation.

• This off-chain data availability, while not as secure as on-chain data availability, can greatly reduce transaction costs.

• privacy

privacy

recursive proof

recursive proof

In "An Incomplete Guide to Rollups", Vitalik writes about some of the main differences between optimistic rollups and ZK rollups. One of them is how the two rollups handle privacy. He specifically mentions recursive proofs. "Recursive proof" refers to the act of verifying a proof against another proof, for example, verifying one SNARK against another SNARK. It's a handy compression technique that increases efficiency and reduces privacy costs.

Aztec's work is called a ZK-ZK-Rollup or ZK²-Rollup, which leverages its innovations of plonk's proofs and turboplonk's to provide transactional privacy. in short:

• A ZK-SNARK represents each transaction on a ZK²-aggregate, these are the "inner" SNARKs.

• Another ZK-SNARK, the rollup SNARK, handles the work of proving the correctness of the inner SNARK.

Note that optimistic rollups cannot enable this innovation because they cannot safely allow internal SNARK validation to happen outside of the rollup; the data must be published on-chain. That's not to say optimistic rollups can't benefit from zero-knowledge proofs, but they're always less efficient and less cost-effective.

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flexibility

flexibility

ZK-rollup enjoys the freedom to innovate in multiple ways without the risk of catastrophic failure that L1 chains bring. A key tenet of Ethereum's rollup-centric roadmap is that the free market is finding all the best ways to build rollups, rather than a small group of core developers assuming what should be best.

Since developing and deploying rollups is a permissionless endeavor, we will see many different approaches to rollups in the race for new users. This includes different styles of governance, token economics and liquidity incentives, different trade-offs within the scope of decentralization, different expressions of ideology, and even different choices of VM environments such as LLVM and custom VMs.

However, not everything mentioned in this section is unique to ZK-rollups. Optimistic rollups have much of the same flexibility, although ZK-rollups do not provide some functionality. However, other L1 smart contract blockchains cannot iterate on any of them as quickly as Rollup. Remember: Now is the rollup and the L1 smart contract platform.

If the L1 chain attempts to iterate too quickly without proper testing and security measures in place, its users are at high risk. All funds on these networks are always bounties. When the L1 chain fails, the loss can be catastrophic. The downtime also affects any extended execution environments that L1 may have (rollups, state channels, etc.). There are benefits to prioritizing security and decentralization.

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Different kinds

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application-specific

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loopring (Loopring) exchange

The world's first DEX (on a decentralized exchange) that adopts ZK-rollup zero-knowledge proof, you only need to link your wallet to trade without permission, and has the super privacy of zero-knowledge proof itself. The current transaction speed can package 2000~4000 transactions per second, which is almost the same as that of centralized exchanges.

In terms of security, Loopring not only has extremely fast transaction speed but also has the security level of the Ethereum mainnet. In addition, Loopring's innovative social wallet function can be bound by your friends or another wallet to help you You recover lost assets.

Vitalik Buterin, the founder of Ethereum, once said: "To ensure the security of assets, hardware wallets are not good enough... mnemonic words are not good enough... multi-signature is good... Loopringorg social wallet recovery is better!" V God has mentioned Loopring in public many times.

The Loopring team and the Ethereum Foundation have reached a cooperation to jointly accelerate the development of ZK-rollup infrastructure: "ZK-rollup EVM", the emergence of ZK virtual machine (EVM) will break through our current cognitive level and can be applied in centralized Among the large-scale games, the explosion of blockchain applications continues to be accelerated.

dYdX Exchange

dYdX Exchange

dYdX, powered by StarkEx, is a decentralized exchange that supports PERP, margin and spot trading, as well as lending and borrowing. Since the launch of L2, dYdX has achieved liquidity comparable to FTX on its ETHUSD pair. While a lot of this may be hiring liquidity for their $DYDX token rewards program, I believe that dYdX or some other ZK-rollup native DEX will one day outperform all perp exchanges forever in volume and liquidity.

In terms of user experience, all you need is an Ethereum wallet and some ETH to log in and start trading on dYdX. Unlike general centralized exchanges, KYC is not required, and there is no need to store your personal information to a third party. Of course, DEX is non-custodial. You do need to move funds to the rollup to use the DEX, but you have control and can withdraw funds back to the mainnet when needed. Users of dYdX anecdotally say that it feels as responsive as using a centralized exchange.

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Immutable X

Another example that is quickly gaining traction is Immutable X, a Will (also powered by StarkEx) that offers NFTs a huge scaling advantage. Recently, TikTok chose Immutable X as the platform for its TikTok Top Moments NFT. Instead of paying $100 to $1,000 in gas costs to mint NFTs, Immutable X lets users mint them for a dollar or even for free. Excerpt from their alpha transaction announcement:

"Immutable X offers gas-free and instant transactions: For any marketplace, game, and dapp, Immutable X offers gas-free transactions (gas-free minting, trading, earning, collecting), instant NFT transactions (up to 9,000 transactions per second) transactions) scalability without compromising user custody.”secondary title

Physics and Game Engines (When is DOOM on ZK-Rollups?)

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other concepts

Volitions will provide a new approach to the Web 3.0 mission. For example, something like a chain-native social network should benefit greatly from off-chain data availability. Jack Dorsey talks about his plans to turn Twitter into an open source distributed system, where Twitter is just a client on top of the "Twitter" protocol. Wills (validiums, more specifically) can play a key role in this reality.

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What's next in the race?

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Ethereum's Pragmatic Black Hole

In the past year, we have seen many "cheap and fast" EVM chains spring up. We’ve also seen chains come online promising to “beat the scalability trilemma!” At the base layer, the notion of layered scaling lingers (their true meaning is sacrificing decentralization for speed and security).

It should be clear by now that a general-purpose computing ZK-rollup will be safer, faster, more decentralized, more adaptable and flexible, and more lightweight than any L1 smart contract chain could hope for. These facts are important; each separate chain would incur unnecessary security overhead and risk, while being an inferior product.

In my opinion, a pragmatic future solution is for these chains to abandon their redundant consensus mechanism and data availability and become ZK-rollup or will. They should incorporate Ethereum's best-in-class security, data availability, and settlement guarantees.

Outsourcing the work of consensus and security to Ethereum will allow these chains to focus strictly on execution. In the post-shard, post-aggregate world, this is their chance to stay relevant. Otherwise, their security baggage will be too heavy to keep up. As time goes on, this will be a reality that will become clearer - very obvious, and it's impossible to justify negligence.

Arguably, networks like Solana, Avalanche, Fantom, and Binance Smart Chain have an edge over any potential pooled governance token. Native tokens for these networks (and others like them):

• There is time to reach a certain level of distribution.

• is a "known entity".

• There is communication support.

• Has deep fluidity.

Reality

Reality

It would be foolish to assume that the architects, VCs, and users of these chains will accept this reality so quickly, if they will. Memes are powerful, there is no shortage of pride, and a lot of VCs have a dream that they want to keep selling to retail investors.

time

time

disclaimer

disclaimer

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General

This is not an all-inclusive list.

• Depending on the summary, the centralized sequencer (or sequencer in general) may have a privileged position to execute MEV.

• Depending on the implementation of the validator data availability committee in volitions, data committee validators may maliciously freeze or refuse to update the validator's state. This does not affect the state of the ZK-rollup in will.

• Many aggregations means many places for liquidity, whether trading tokens or trading NFTs. While ZK-rollup allows for rapid movement between rollup and mainnet, or even rollup-to-rollup, liquidity fragmentation can cause early turmoil. dAMM aims to solve this exact problem.

• Running the Provers is computationally demanding and we would do well to find ways to reduce their potential kW/h consumption while increasing their efficiency.

• Note that proof-of-work is not an attrition game like proof-of-work mining; it doesn't get harder over time. Therefore, in the PoW era, it is unlikely that the prover's energy usage will approach that of Ethereum.

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Optimism rollup

While I don't believe in the long-term viability of optimistic rollups, they are still currently the best EVM-compatible scaling solution for Ethereum. General Computing EVM-compatible ZK-rollup is not yet live, and it will be a while before we realize all the benefits I describe in this article.

Optimism recently announced an exciting change to their execution environment that will benefit users and developers alike. Arbitrum will soon receive its Nitro upgrade, which will enhance EVM compatibility and provide faster speeds to its users. (You can log on to their official website to view the updated content)

An increasing number of new and existing DeFi applications are being deployed on these rollups. There are billions of dollars in liquidity between the two networks. Both networks are well worth trying and supporting. Bridging optimism and arbitrariness takes just minutes!

I urge you to verify the validity of every URL before interacting with any website. You can always double-check two profiles, Twitter for the linked Optimism website and Twitter for Arbitrum.

As of this writing, Optimism only works with whitelisted smart contracts, but users are free to use any whitelisted smart contract. I suspect this whitelist will be removed anytime soon. Arbitrum has no whitelists; users and developers are free to trade and deploy to their heart's content.

Keep in mind that withdrawals from the Optimism and Arbitrum bridges require a 7-day wait (a product of the way Optimism aggregates handles fraud). There are 3rd party service bridges where you can swap back and forth from rollup to mainnet for a fee. Do your own research before using any of them, and always double check the slippage and rates you are quoted.

in conclusion

in conclusion

We are on the verge of a massive paradigm shift that will change the crypto ecosystem forever. ZK-rollups will scale Ethereum, they will do what they can. The paradigm shift is powerful enough that it very clearly marks the beginning of the end for every L1 smart contract chain - even Ethereum as we know it today.

There are many different extension proposals. Thousands of hours of research, implementations, successes and failures have gone into trying to find the right way to make this proverbial light bulb - and of course the work is far from over. The road ahead is full of twists and turns, but the destination has never been clearer.

I hope this article helps you shape your mental model as you consider the future of this industry. I couldn't be more excited to see what's in store for all of us.

Finally, many thanks to Canti for co-authoring the article.