On the Ethereum network, there has recently been an increase in the use of NFTs, yield farming, and smart contracts. This increase has resulted in the requirement for quicker processing speeds and lower transaction costs. Developers began addressing this issue by developing layer 2 blockchains (a secondary framework built on top of an existing blockchain).
One such scaling approach was the introduction of zero-knowledge rollups. Slide down and let’s find out what they are and how they work!
What Are Zero-Knowledge Rollups?
A zero-knowledge rollup interacts with several blockchain tiers. Because Ethereum is used by the bulk of ZK-rollups, we’ll use it as an example. The main Ethereum chain offers advantages, but they are sometimes accompanied by hefty transaction fees and slow speeds. Ethereum Layer 2 blockchains use the main chain’s security while increasing speed and cost.
You can use ZK-rollups to generate a transaction that works for both layers. A ZK- rollup is a transaction that combines many zero-knowledge proofs into a single bundle. This is a smart contract that can keep its state on both Layers 2 and 1 of the blockchain. Without going into too many specifics, this effectively implies that a ZK-rollup checks information for many transactions in various locations, saving time and money.
How Do Zero-Knowledge Rollups Work?
To understand how a zero-knowledge rollup works, we must first grasp the notion of zero-knowledge proofs, which are a cryptographic process that allows you to verify you have certain information without actually exposing it.
Instead of presenting the actual password, you may demonstrate that you have the password for an account by displaying that you are signed in. When it comes to cryptocurrency, zero-knowledge proofs serve as transaction documentation. Users can demonstrate that they have all of the required data and authorizations without actually disclosing this information to other visitors.
The Merkle tree, a form of mathematical structure that allows blockchains to avoid the storing of erroneous data, is also an important aspect of the zero-knowledge rollup process. Smart contracts for ZK-rollups have two Merkle trees.
One tree keeps account information, while the other saves balances. This enables the rollup to retain all relevant information on Layer 1 while also storing additional backup data on Layer 2. Because the core layer only has to manage a few important bits of information, the blockchain requires less computing power.
When you transmit a zero-knowledge rollup, you’re essentially combining many Layer 2 proofs into a single transaction that is subsequently broadcast on the main blockchain. Instead of mining several individual transactions, the main chain simply needs to deal with one validation evidence.
Verifying the single rollup on Layer 1 allows you to check all of the different transactions on Layer 2 at the same time. The rollup works by merely handling tiny quantities of data on the main chain while yet enabling access to verification data on the second tier.
Zero-knowledge Rollups vs Optimistic Rollups
Keep in mind that a ZK-rollup is not the same as an optimistic rollup. Because optimistic rollups are a sort of scalable and easy transaction, they are sometimes mistaken for zero-knowledge rollups.
However, from a computational standpoint, they are handled differently. Optimistic rollups are likewise collections of transactions processed on Layer 2 and released on the main chain.
However, they are not truly tested before publication. As the name suggests, optimistic rollups are presumed to be genuine unless shown otherwise. The rollup includes a dispute period during which users can contest any potentially invalid transactions. Until the dispute period is finished, the transactions are not documented on the main chain.
Optimistic rollups have several applications, but their lack of final proof makes them less secure than zero-knowledge rollups. A ZK-rollup is also often faster than an optimistic rollup. You must wait for the dispute time to expire when utilizing an optimistic rollup.
Advantages of Zero-Knowledge Rollups
Zero-knowledge bundles are becoming quite popular because they have several helpful advantages.
Faster Verification Times
One of the primary advantages of a ZK-rollup is its speed. All transactions are executed first on Layer 2, which is faster than the main chain. These transactions are validated promptly since they are accompanied by evidence (once they reach the main chain).
These faster timings are more comfortable for consumers and make Layer 2 scalability much more feasible. A ZK-rollup is one of the quickest choices, especially when dealing with a high number of transactions.
Less Vulnerable to Attacks
In comparison to other bundling approaches, zero knowledge is rather safe. Information is verified at numerous stages since transactions are confirmed with zero-knowledge proofs. This helps to keep transactions safe from economic threats.
The data required to restore your transfer state is all saved on the main blockchain, ensuring maximum decentralization. You may be certain that your transaction is sufficiently decentralized, especially when working with a blockchain like Ethereum. This adds an extra layer of security to your transaction.
More Affordable to Process
Users benefit greatly from the speed and ease of processing on the Layer 2 blockchain. This is especially true when working with Ethereum and other blockchains, which raise transaction costs at busy periods.
With a zero-knowledge rollup, you can manage several transactions for a single price. As a result, while working with big amounts of data, you may save a significant amount of money.
Disadvantages of Zero-Knowledge Rollups
ZK-rollups won’t work well in every situation, and there are some potential issues associated with using rollups in certain circumstances.
Lack of EVM Support
Some rollups do not support Ethereum virtual machines (EVM). This isn’t necessarily a concern for certain blockchains, but it can present issues for others. Before electing to employ ZK-rollups, you should thoroughly understand your blockchain.
High Computational Requirements
Some individuals choose (unproven) optimistic rollups since their technique has reduced computing needs. Although ZK-rollups are more secure, the computational cost of producing so many zero-knowledge proofs is high. All of the extra work may not be worth it for an application with little on-chain activity.
Vulnerability to Operator Influence
The method of constructing a zero-knowledge rollup gives the operator some control over the smart contract. They have the ability to change the sequence of transactions, which may cause problems for some users. This is why, when working with any form of zero-knowledge rollup, it is critical to always engage trustworthy sources.
Zero-Knowledge Rollups on Ethereum
Though rollups may be utilized on a variety of blockchains, the bulk of zero-knowledge rollups is used using Ethereum. ZK-rollups have certain Ethereum-specific uses. Although Ethereum is well-known for its versatility, its network may become clogged, sluggish, and costly. ZK-rollups make project expansion easy. They provide greater scalability while still allowing consumers to benefit from the Ethereum network.
A number of projects are focusing on adapting ZK-rollups to Ethereum. Polygon Hermez (Polygon’s zkEVM) is one of the biggest. One billion dollars has been invested in roll-up provider technology through this open-source effort.
Other well-known implementations include dYdX, Loopring, and zkSync. All of these projects may be linked into your decentralized apps (DApps) to increase the functionality and performance of Ethereum-based projects.
Finally, zero-knowledge rollups offer a wide range of intriguing uses for Ethereum and beyond. Their capacity to process transactions more quickly aids in the resolution of various scalability concerns with blockchains. Though they are still relatively unknown, you can expect to see more of them in the future.