In the race to scale the Ethereum
blockchain, two factions have emerged as dominant players in the Layer 2
(L2) space: optimistic rollups
and zero-knowledge rollups
(zk-rollups in short).
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Optimistic rollups take computation and state storage off-chain
. While the execution of transactions occurs on the rollup outside of Ethereum, transaction data is passed down and stored on Ethereum mainnet
. This is done by bundling transactions together into one large transaction which is passed on Ethereum as calldata. This method also allows gas fees
on Ethereum to be spread across all of the transactions included in the bundled transaction, which is why gas fees on optimistic rollups tend to be much lower than on Ethereum mainnet.
Source: L2 Fees (Link)
Optimistic rollups assume that all transactions computed off-chain are valid and accurate when posting them to Ethereum without submitting a proof of validity
, hence the term “optimistic”. As such, to combat fraudulent transactions, a challenge period is put in place in which anyone can challenge the transactions posted. If it is proven that fraudulent transactions have been included, the optimistic rollup will re-execute the valid transactions and update their state accordingly. Conversely, if the challenge period passes with no successful challenge, the transactions become finalized.
In the other corner, we have zk-rollups, which are far less optimistic. While zk-rollups also do computations off-chain, they provide a cryptographic proof to prove that the state update that they are passing to Ethereum is truly the result of all of the transactions that have occurred on the zk-rollup.
These validity proofs
allow any party to verify the accuracy of the state update without knowing the details of the transactions leading up to it, hence the name, “zero-knowledge”. Since zk-rollups are able to provide proof of the accuracy of their transactions, there is no need for a challenge period on zk-rollups. Moreover, unlike optimistic rollups, zk-rollups need not post every transaction onto Ethereum, but rather just the proofs.
However, this comes with the burden of generating the fraud proof, which tends to be highly resource-consuming and often requires a high level of expertise to run. But not all zk-rollups are made equal. Zk-rollups can also be further broken down into zkSNARKs
Difference Between ZkSNARKs and ZkSTARKs
Both zkSTARKs (Zero-Knowledge Scalable Transparent Argument of Knowledge) and zkSNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) strive to achieve the same purpose, which to enable zk-proofs and to enable scaling of blockchains. However, they do have quite significant differences between them.
ZkSNARKs came first, being initially popularized by privacy protocol, ZCash
. This head start allowed zkSNARKs to build up a strong community of developers and tooling which allow it to be used much more widely today. ZkSNARKs also use a much smaller proof size which requires less gas and time to verify. However, the downside to this was a much slower computation time to generate the proof.
However, zkSTARKs have their own benefits too. One of the major downsides to zkSNARKs is the need for a trusted setup in the initial phase. This also means that if the setup process was not conducted properly, the chain could be susceptible to exploits in the future from malicious parties. ZkSTARKs do not use trusted setup and hence, are not susceptible to such an attack. Moreover, zkSTARKs tend to generate proofs more quickly, allowing zkSTARKs to potentially scale better.
There is no clear winner for now between the two and both technologies are still being implemented in developing projects. As optimistic rollups like Arbitrum
take the lead in early 2023, zk-rollups are slowly closing in on them. More specifically, it is the zk-rollups that are Ethereum Virtual Machine
(EVM) compatible that the market is especially excited about.
Read our guide to the top protocols on Arbitrum and Optimism
Let’s dive into zkEVMs.
ZkEVMs, as the above point describes, refer to zk-rollups that are fully compatible with the EVM. This means that any application currently on Ethereum or any other EVM compatible chain, such as Polygon
, will be able to deploy onto a zkEVM, with minimal modifications to their codebase.
EVM compatibility has always been a highly sought-after trait for a new chain as a strategy to attract developers and users. After all, the majority of Total Value Locked
(TVL) on-chain has always been on Ethereum, with the chain holding more than 50% of all TVL at any point. As such, it is no surprise that alternative Layer-1
(L1) chains which are EVM compatible proved to be attractive to existing Ethereum developers. They could deploy their project on another chain with relatively lesser effort while still reaping the rewards of having a whole new user base.
Likewise, while zk-rollups such as StarkNet are already live on mainnet, they have not gained significant traction, likely due to their lack of EVM compatibility and major decentralized applications
(Dapps) on the chain. Therefore, with the wave of announcements from major zkEVM players in the space in early 2023, many crypto users are eager to explore their options in the zkEVM space.
Read our guide to the StarkNet ecosystem.
is no stranger to the scaling space, beginning with the Proof-of-Stake
Polygon sidechain attempting to scale Ethereum. Unlike rollups which can inherit the security of the parent L1, sidechains are responsible for their own security. That said, the Polygon sidechain was still wildly successful. Besides being one of the dominant players in the DeFi summer of 2020, its recent notch of major business development wins saw it partner up with the likes of Starbucks, Adidas and Prada, Reddit, Stripe and more.
Source: Polygon Miden (link)
But Polygon was more than just a sidechain. Behind the scenes, Polygon did extensive work in the scaling arena, acquiring zk-rollup, Hermez, as well as zk-focused project, Mir. Polygon’s team also worked intensively on several other zk-related projects including Polygon Nightfall, Polygon Miden and Polygon Zero.
But the one that has generated the most excitement by far, is Polygon’s zkEVM, which recently announced the mainnet launch date of March 27, 2023.
Source: Polygon zkEVM Product Deck (link)
Polygon zkEVM is the evolution of Polygon Hermez as well as breakthroughs in the proving research during the development of Polygon Zero. Due to this integration of Polygon Zero’s technology, Polygon claims that their current proving technology is the fastest in the world.
On top of that, Polygon zkEVM uses recursive
STARKs, which in simple terms means that while traditional zk-rollups roll many transactions into one proof to be uploaded, recursion allows many proofs to be rolled up into one big proof. This allows cost savings and reduces latency
, allowing Polygon’s zkEVM to scale even more effectively.
Founded in 2014 by Ethereum co-founder Joseph Lubin, ConsenSys
is responsible for some of the most used products in crypto today, including hot-wallet MetaMask
, infrastructure protocol Infura, and many more.
Source: ConsenSys (link)
Most recently, ConsenSys opened up a private beta to their zkEVM testnet in late 2022 and on March 28, 2023, will finally be unveiling their public testnet.
The ConsenSys zkEVM utilizes a unique stack which is the result of years of research by the team. While built on zkSNARK technology, they use an innovative, internally-generated, lattice-powered prover which helps to circumvent the key flaws in zkSNARK technology.
Their prover, which has been in development since 2021, allows zkSNARK proofs to be generated quickly. Perhaps more importantly, in a research paper
by ConsenSys researchers, it shows that ConsenSys zkEVM will not even require a trusted setup. The trusted setup has long been regarded as the Achilles heel of zkSNARKs as it requires the user to inherently trust that the setup was done correctly. However, with ConsenSys’ major breakthrough, this could effectively turn the tide and perception of zkSNARKs.
Source: ConsenSys (link)
Moreover, with ConsenSys’ reputation in the crypto space, they have already secured partnerships with protocols such as top decentralized exchange
(DEX) — Uniswap
, decentralized social media
platform — Lens Protocol, and cross-chain bridge
, with more partners lined up.
One of the lesser known players in the space, Scroll is by no means a stranger to zkEVM technology. Scroll has been hard at work on their zkEVM solution for almost two years now. Finally, after all of their efforts and after 1.6 million transactions processed on their pre-alpha testnet, Scroll launched on the Goerli testnet on 28th February 2023.
Scroll’s zkEVM solution runs on zkSNARKs much like ConsenSys’ zkEVM. Like ConsenSys, Scroll has understood the initial flaws in the zkSNARK design and has taken steps to work around them. Scroll uses a modified version of ZCash’s “Halo2'' code
, which allows protocols to harness the benefits of zkSNARKs’ small proof size and quick proof verification while removing the need for a trusted setup.
Scroll aims to be as faithful to the EVM as possible and this is reflected in their design, which is built in Solidity without additional compilers in between to convert between different programming languages.
In fact, Scroll’s team also works on the community-built zkEVM, which is a zkEVM layer jointly worked on by the Ethereum Foundation’s Privacy and Scaling Explorations (PSE) team, and several other teams that are building in the zkEVM space. They are aiming to develop a zkEVM that is fully Ethereum-equivalent. Ethereum-equivalence is one level above EVM-equivalence, which means that any application on Ethereum would be able to run perfectly without any modifications or middle layers.
In addition, true to the Ethereum ethos of decentralization, Scroll also already has plans in place to decentralize their prover network and their sequencer in their roadmap, after the launch of Scroll’s mainnet.
ZkSync was created by blockchain engineering and research team, Matter Labs, as a project to help scale Ethereum with the use of zk-proofs. Their first product zkSync 1.0, now rebranded to zkSync Lite, was their first foray into the zk-rollup space. However, zkSync 1.0 started with no smart contract
support. Fortunately, zkSync 2.0 fixed that, bringing smart contract support with Zinc, a language designed specifically to support smart contracts on zkSync. In February 2023, zkSync 2.0 announced a rebrand to zkSync Era, bringing in new features for the rollup.
Source: zkSync Era Docs (link)
Beyond smart contracts, ZkSync Era also supports Account Abstraction
. Account Abstraction, which recently became supported on Ethereum mainnet with ERC-4337, allows for more flexible authentication logic, gasless transactions, and better wallet recovery for users among other features. These features greatly improve the user experience by abstracting the complexities of self-custody and navigating the crypto space.
On the backend, zkSync Era uses a zkSNARKs-based system known as PLONK
for its proofs. PLONK improves on the work of zkSNARKs, making the trusted setup universal and updatable. Universal means that the setup only needs to be done once and can be reused by all circuits, while updatable means that any user can keep continuing to add randomness during the setup until they are confident that the setup is not compromised. While not a perfect solution, it makes it easy to include a large number of participants in the setup, making it practically very secure.
Today, zkSync 2.0 is now zkSync Era, as it finally opens its doors on mainnet to registered projects to deploy on the platform, before finally opening to the end users later in Q2 2023. More than 150 projects have registered to deploy, including DeFi heavyweights like Uniswap, Balancer
, LayerZero and more. ZkSync Era also has a compiler to support Solidity, Vyper and Rust
, which allows Dapps built in other languages to deploy on zkSync Era with relative ease, with minimal code modifications.
Taiko is the newest player on the list, having only been founded in 2022. However, their team is not new to the space, as their founders worked on Loopring
, the very first zk-rollup to be deployed on Ethereum.
Source: Taiko Twitter
Taiko aims to be a Type 1 zkEVM, meaning that they are looking to be fully Ethereum-equivalent, rather than just EVM-equivalent. This will allow well-tested code from Ethereum to easily port over to Taiko as well as improve the developer and user experience on the chain.
In terms of their proving model, Taiko utilizes zkSNARK proofs for their rollup. Acknowledging the time required to generate proofs for zkSNARKs, Taiko has designed their protocol to circumvent the need to wait for a proof if the transaction happens on the rollup, only requiring it for cross-layer transactions such as bridging. This allows them to greatly reduce the time required for proof generation which is one key downside of zkSNARKs. But beyond that, Taiko is also exploring other bridging methods that remove the need for full zk-proofs to be generated.
Taiko has currently deprecated their testnet Alpha-1 and is looking to launch their Alpha-2 sometime in March or April 2023. Their mainnet launch is currently slated for early 2024.
With various zkEVM solutions reaching their respective mainnet launches in 2023, the race to scale Ethereum has never been hotter. Each solution provides their own benefits and edge against their competitors and not to mention, airdrop potential for most of them.
Moreover, players like StarkNet, that do not natively support EVM yet, are also exploring transpilers to bridge the gap in programming languages. The remainder of 2023 will certainly be an exciting time for zkEVMs as they battle for dominance in not just the zk-rollup space, but also against their optimistic counterparts.
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