This article explores how ZK-Rollups can achieve a paradigm shift in Ethereum?
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scalable "Trilemma” exist in all blockchain networks. The harder it is for a blockchain L1 (mainnet) to push scalability, the higher the minimum hardware requirements to run a full node on that network. When it is not so easy to run a full node, the blockchain network becomes more centralized. What is clear is that Ethereum has long prioritized L1 security and decentralization over scalability. But as Ethereum turns to aRollup-centric roadmapRollup-centric roadmap, Ethereum is leveraging its L1 base layer (specifically its massive full node network)picture
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Above: The "trilemma" of the blockchain, source: Vitalik ButerinThe intent of Ethereum's shift to this roadmap is that what we have today on the Ethereum blockchainMost trades executed(including DeFi, NFTs and other activities)will be transferred to Rollups for, rather than on Ethereum L1. While this goes against the philosophy of many L1s chains in the industry focusing on speed and security (rather than decentralization), thisThe "trilemma" does not apply to Rollups: Rollups inherit the security of the Ethereum L1 mainnet, and since Ethereum L1 handles the hard part,
you may have heardOptimismandArbitrumandOptimistic RollupsBoth networks, both based onZK-Rollupstechnology Rollup network; another type of Rollup network is based ontechnology, there are already some ZK-Rollups-based networks online (such as the current Loopring and zkSync 1.0, etc.), butNo ZK-Rollup network yet provides general computing EVM compatibility (i.e. zkEVM)
, but this won’t be the case for long as zkSync 2.0, Scroll, StarkNet, and other networks are making rapid progress.So why is this important? When Ethereum transforms from a "monolithic blockchain" to a "modular system"hour,As Polynya in itsarticlearticlepointed out inOther L1 smart contract blockchains will no longer compete directly with Ethereum, but with Rollups.
In fact, with these competing Rollups implementations and their focus on improving execution efficiency, Rollups will iterate itself to the best version extremely fast. Since they are all likely to undergo rapid changes, I will not attempt to describe a specific ZK-Rollups scheme in this article; instead, this article will emphasize ZK-Rollup after the merger of the old and new Ethereum chains & the implementation of sharding capabilities and possibilities in the world of Ethereum.
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The security guarantees that Rollups have allow them to achieve some interesting dynamics.
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escape hatchIf your funds are on a Polygon PoS (Ethereum sidechain) or Solana blockchain, and the network goes offline for a few hours, there is nothing you can do about your trapped funds during that time. Unlike using these "side chains" or other L1 smart contract chains, contracts based on the Rollups chain of the Ethereum L1 main network contain "escape hatches",picture
Ideally, withdrawing funds from Rollup to L1 should not be a very "comfortable" process. Source: Google
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Centralized Sequencers & Provers (And Why They're Not So Scary)I know I said in the intro above that this article is about the "best advantage" Rollups has to offer, and before anyone gets disappointed by this, I need to clear up one obvious fact:The ideal scenario is that Rollups implements fully decentralized sequencers and provers; but this is not the case initially:Most Rollups start with varying degrees of centralization and gradually become decentralized.But having said that,
It is a fact worth emphasizing that a Rollups chain with a centralized sequencer will still be more secure than a centralized L1 chain.When you use a Rollup network with a centralized sequencer or prover, you only compromise trust and censorship resistance, not security.The operator of the Rollups sequencer cannot steal your funds, you can always withdraw your funds back to the Ethereum mainnet.
We’ve all heard the joke of a blockchain being a “chain of data centers” before in one way or another. With ZK-Rollups, you can actually have a data center of ultra-high-spec machines dedicated to doing proof work, which is not an existential risk to the network.
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Decentralized Sequencer & ProverThankfully, since the Rollups developers are able to trigger the escape hatch when needed and cannot steal funds, they can experiment with various scenarios without fear of catastrophic consequences. The design field for implementing decentralization of sequencers and provers is quite broad. In its final form,More importantly, we will have a distributed Rollups network consisting of businesses, Rollup developers, and enthusiasts running Provers.
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02. Data availability
But once Ethereum implementsdata shardingdata sharding(data shards) and turned into a "modular system"hour,, and these capacities will only increase over time (as Ethereum will increase from the initial 64 shard chains to 1024 shard chains). A large number of full nodes and validators means that Ethereum will have the highest volume data availability.
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Ethereum Data ShardingSharding is a multi-stage upgrade that Ethereum will implement. Shards will serve as load balancers for network data storage requirements,Allows the Rollup execution layer to gain huge scalability gains
. Importantly, this also avoids imposing excessive requirements on full nodes of the Ethereum network, allowing the network to remain decentralized.Initially, Ethereum will implement64 data fragments1024 pieces of data fragmentation. Data sharding will not be responsible for processing transactions or smart contracts, but will provide additional data capacity for Rollups.
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Schematic diagram of Ethereum sharding, source: Hsiao-Wei WangWe know that Rollups passBatches of transactions in a compressed form, released to the Ethereum mainnet from time to timeSingle state root update, the state root update contains the results of many different transactions that occurred in the Rollup layer.Since Rollups must publish these state roots to the main network, the Gas fee that Rollups needs to pay is also fluctuated by the demand for block space on the main network, and this cost is usually transferred to the users of RollupsAn almost 20x increase, which will allow cheap and fast operations on Rollups!
Volitions
secondary titleVolitions is a hybrid expansion solution that enables users toChoose between "ZK-Rollup Mode" and "Validium Mode". Similar to the ZK-Rollups scheme, Volitions also needs to submit state roots and proofs to the Ethereum mainnet
picturezkSyc 2.0：
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Above: The Volition solution that zkSync 2.0 will implement. Source: Matter LabszkPorter". In this scheme, data availability is secured by zkPorter validators. The Matter Labs team claims that zkPorter will be able to achieve a throughput of 20,000 TPS and a 100x reduction in Gas costs. It is worth noting that the ultimate transaction throughput upper bound on zk-Rollup is actually limited by the computational and storage capabilities of its provers. I think 20,000 TPS might actually be an overestimate in the long run.
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Currently, transaction costs on Rollups are pretty low, but not low enough. Fortunately, there are more optimization methods that will bring about a significant reduction in Gas costs. In addition, many technologies will be deployed to increase the transaction throughput of Rollups.
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Army of RollupsGiven the lightweight nature of Rollups on mainnet,When a Rollup is saturated (for example because its sequencer is overwhelmed, etc.), it will be a piece of cake to jump to another Rollup and start transacting. You can also fork a Rollup and deploy a copy of that Rollup if desired.
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Validity Proof Amortization
Validity proof amortization means that the Gas cost that needs to be paid for each transaction batch on ZK-Rollups when submitting the state root update to Ethereum L1 will be apportioned to all transactions contained in the transaction batch.In this article, I will provide an example to quickly understand the concept of amortization. Keep in mind that this example is mathematically inaccurate for the sake of simplicity. The formulas I provide are for illustration only;In reality, the split of Rollups transaction costs is not so simple.
Here is the scenario we imagined:
Assume that the cost of a Rollup network updating a state root to Ethereum L1 is 5,000,000 Gas;
Similar to the main network, Rollup users also need to pay a Gas fee when initiating a transaction;
In this way, the cost formula that needs to be paid for each transaction is x = 5000000/y, where x represents the Gas fee that needs to be paid for each transaction, and y represents the number of transactions included in a given Rollup transaction batch.
From this we can deduce:
If the transaction batch contains 200 transactions, the cost of a single transaction is 25,000 Gas;
If the transaction batch contains 100,000 transactions, the cost of a single transaction is 50 Gas, which is basically negligible.
An example of amortization is: StarkEx provides a mechanism called SHARP (short for Shared Prover), which is to share the cost among all StarkEx deployments.
Volitions
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Most of the relevant information about Volitions has already been mentioned above. Still, the scenario is relevant for Rollup throughput, so it's worth mentioning Volitions again. Just to recap:
Volitions give developers and users the ability to use off-chain data availability in Validium mode;Although the security of this off-chain data availability is not as good as on-chain data availability, it can bring；
Substantial reduction in transaction costsUnlocks a lot of additional transaction throughput。
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04. Privacy“ZK”As we all know, privacy is not an inherent property of the Ethereum public chain. ZK-Rollups schemes are also not private by default. in ZK-Rollup(zero knowledge, zero knowledge)This does not mean "your trading activities are hidden from prying eyes". It's not that bad though: there's a lot of work going on right now to make ZK-Rollups permissionless and private.
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recursive proofIn his article "An Incomplete Guide to Rollups", Vitalik talks about some key differences between Optimistic Rollups and ZK-Rollups, one of which is how the two Rollup schemes handle privacy issues. Vitalik specifically mentions"Recursive Proof"(recursive proofs). hand overProof of return refers to the act of verifying another proof inside a proof
Proof of PLONKProof of PLONKandTurbo-PLONKand
To provide transaction privacy.
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Above: Turbo-PLONK polynomial logic unit, source: Zero Knowledge Summit.
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05. Flexibility
ZK-Rollups enjoy the freedom to innovate on multiple fronts without the risk of catastrophic failure like other L1 chains. 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 leaving a small group of core developers to assume that way should be best.Since developing and deploying a Rollup network is a permissionless endeavor, IWe will see many Rollups with different methods to compete to attract users
, including adopting different styles of governance, token economics, liquidity incentives, different trade-offs in the spectrum of decentralization, different expressions of ideology, and even choosing different VM (virtual machine) environments (such as LLVM, automatic defined VMs, etc.).However, not everything mentioned in this chapter is unique to ZK-Rollups. Although Optimistic Rollups lack some features provided by ZK-Rollups, Optimistic Rollups also have considerable flexibility. However, other L1 smart contract chains cannot iterate on any of these features as quickly as Rollups. please remember:
Now is the time for Rollups to take on other L1 smart contract platforms.
If the L1 chain tries to iterate quickly, forgoing proper testing and security measures, there is a high risk for users. At any one time, all funds on the L1 network are a kind of "bounty", and if the L1 chain fails, the loss can be catastrophic. Downtime will also have an impact on any scalable execution environments (such as Rollups, state channels, etc.) on that L1. It makes sense for L1 networks to prioritize security and decentralization.In the worst case, when a Rollup crashes, manual actions will be required until the problem is resolved. As if interacting with a smart contract on the Etherscan website, Rollups developers and dApp developers may, allowing the user to manually operate Rollups quickly and easily if desired. Thankfully, these quick iterations are likely to be addressed early on, and I think the associated development work will be given full attention.
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By outsourcing computation (i.e. performing computation at the L2 layer), a large number of new on-chain applications that are not possible on the current Ethereum main chain or any other smart contract platform are possible. This new paradigm also allows us to build advanced versions of any existing on-chain product.
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Application-specific ZK-RollupsAlthough this paper focuses primarily on the benefits of general-purpose computing ZK-Rollups, theApplication-specific ZK-Rollups
There are also many effects that need to be explained.
dYdX ExchangedYdXIt is a decentralized exchange that supports perpetual contract trading, margin trading and spot trading, and also supports asset lending. Since dYdX was deployed on the L2 network, the liquidity generated by the ETH-USD trading pair on the exchange has rivaled that of the FTX exchange. While this liquidity may be "mercenary liquidity" flowing in to participate in the platform's DYDX token reward program, I believe dYdX or some other ZK-Rollup native DEX (decentralized exchange) will one day It will always surpass all perpetual contract exchanges in terms of trading volume and liquidity.
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Above: dYdX's ETH liquidity vs. FTX, data as of September 26, 2021. Source: Hsaka
In terms of UX (User Experience), all you need is an Ethereum wallet and some ETH to log in and start trading on dYdX. Unlike general centralized exchanges, there is no need for KYC here, and there is no need to store your personal information to a third party. Of course, DEX is non-custodial. You do need to transfer funds to Rollup to use this DEX, but you are in control of your funds and can withdraw funds to the Ethereum mainnet when needed. Some users of dYdX say it feels as responsive as using a centralized exchange.
Immutable X
Some blockchains have already attracted the attention of the high-frequency trading crowd. Assuming high frequency trading firms are rational, profit-oriented entities, I think over time this activity will reside primarily on ZK-Rollups.Immutable XAnother example that quickly gained traction is the
, a Volition solution (also powered by StarkEx), the platform offers huge scalability benefits specifically for the minting and trading of NFTs (Non-Fungible Tokens). Recently, TikTok chose the Immutable X platform for their TikTok Top Moments NFTs. The Immutable X platform allows users to pay very low fees or even mint NFTs for free, without spending $100 or even $1,000 in Gas costs. In a statement, the platform said:
Did you see they say up to 9000+ transactions per second?
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other ideas
Similarly, I can imagine a resurrection of an open-source Vine (the now-defunct short video app), where short user-submitted videos (6 seconds or less) are minted into NFTs. TikTok and its "Top Moments" NFT initiative is very similar to this idea, but TikTok is a closed-source entity after all, and a small breakthrough is never a bad thing for it.
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ZK-Rollups bring a lot to the table, and Ethereum will soon make ZK-Rollups work to the best of their ability. But what about other competing L1 chains? Surpassed by ZK-Rollups in all respects, what happens to these L1 chains? This is a good question, but one that is bound to have many complex answers. I have some thoughts about their fate.
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Ethereum's Pragmatic Black HoleIn the past year, we have seen many "cheap and fast"EVM compatible chains have sprung up. We have also seen some blockchains claiming to "overcome the blockchain trilemma" at the base layer
It is obvious that general-purpose computing ZK-Rollups will be more secure, more decentralized, more adaptable and flexible, and more lightweight than any other L1 smart contract chain. These facts are important; each L1 chain operating independently will incur unnecessary security costs and risks, while also being a "bad product".
in my opinion,in my opinion,For these blockchains, the future pragmatic solution is to abandon their redundant consensus mechanism and data availability and turn into a ZK-Rollup or Volition.
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That is to say, abandoning their redundant consensus mechanism and security costs and becoming an Ethereum-based Rollup does not mean that their tokens will disappear. Instead, they can repurpose their tokens to fit their sequencer and prover incentives, or provide on-chain liquidity incentives. These chains don’t need to sacrifice their identities, just their dangerous baggage. For them, the impact of this is positive.
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Reality
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time
Even if these L1 chains chose the most practical path, becoming a Rollup network, it would take a lot of research, preparation, and care to make such a drastic change. It takes a long time for any L1 chain to take this approach. Perhaps counterintuitively, my hunch is that Solana will be one of the first blockchains to take this approach.
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The future of ZK-Rollups may seem like a magical technological solution, but there are a few things you need to keep in mind.
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general overview
Here is a non-comprehensive list:
Depending on the Rollups implementation, a centralized sequencer may have an advantage in performing MEV (miner extractable value).
Depending on the implementation of the Data Availability Committee of Validiums in Volitions, the validators of the Data Committee may maliciously freeze or refuse to update the status of Validiums. But this situation does not apply to the ZK-Rollups mode in Volitions.
The emergence of many Rollups means that there are more liquid venues, whether it is token trading or NFTs trading. While ZK-Rollups allow for rapid transfers between Rollups and the mainnet, and even Rollups to Rollups, the fragmentation of liquidity can cause early turmoil. Fortunately, initiatives such as dAMM (an automated market maker protocol that supports sharing liquidity across different L2s networks) aim to solve this problem.
Running a Rollup prover is computationally expensive, so we should find ways to reduce the potential kW/h consumption while making the prover more efficient.
Having said that, with the exception of MEV (Miner Extractable Value), I would expect the market to provide solutions for most problems relatively quickly. As far as MEV is concerned, this is unfortunately a thorny problem that will not be solved by any one magic solution or agreement, but various methods of minimizing and democratizing MEV will help reduce its impact.
Optimistic Rollups
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OptimismWhile I don't believe Optimistic Rollups have long-term viability, Optimistic Rollups are still the best EVM-compatible scalability solution for Ethereum right now. General Computing EVM-compatible ZK-Rollups are not there yet, and it will be a while before the full benefits of the scheme presented in this article are realized.ArbitrumAn exciting change to its execution environment was recently announced that will greatly benefit users and developers.will soon alsoNitro upgrade
, which will enhance the network's EVM compatibility and provide faster speeds for its users.
Interestingly, more and more new and existing DeFi applications are deployed in these Rollups networks. These two L2 networks have already sucked in billions of dollars in liquidity. Bridge from Ethereum L1 to Optimism or Arbitrum network in minutes!
https://gateway.optimism.io/welcome
You can bridge to Optimism via this link:
https://bridge.arbitrum.io/
Or use this link to bridge to Arbitrum:
I recommend that you verify the validity of each link before interacting with either of these networks. You can reconfirm via the links posted on the profiles of the official Twitter accounts of Optimism and Arbitrum.OptimismAs of this writing,ArbitrumThere is a whitelist for smart contracts that can be deployed on it, but ordinary users can use any smart contract application in the whitelist as they like. I expect that whitelist will be removed soon.
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09. Summary
09. SummaryWe are on the verge of a massive paradigm shift that will change the cryptocurrency ecosystem forever.
ZK-Rollups will scale Ethereum, and they do it best. This paradigm shift is so powerful that it clearly marks the beginning of the end for every other L1 smart contract chain — even the one Ethereum we know today.
Hopefully this article has helped shape your mindset as you think about the future of this industry. I couldn't be more excited for what's to come.
