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Zero Knowledge Rollups

Updated on :  

08 min read.

Demand for the Ethereum network began rising with the craze in yield farming and NFT, which started towards the end of 2020. With that, the need for cheaper transactions and faster processing speeds increased. Layer 2 blockchains and other developments such as zero-knowledge rollups were the solutions for this.

In this article, let’s take a closer look at zero-knowledge rollups.

Zero-knowledge rollups: Definition

In simpler terms, ZK-rollups or zero-knowledge rollups is a Layer 2 scalability solution that enables blockchains to validate transactions quicker and ensure minimal gas fees. 

Zero-knowledge rollups deliver better performance than traditional Layer 1 blockchains such as Ethereum as they combine on and off-chain procedures.

Working of zero-knowledge rollups

To properly understand how ZK-rollups work, it is crucial first to understand the founding concept – zero-knowledge proofs (ZKPs). In simpler terms, zero-knowledge proofs are a way to prove that you know something without revealing the thing you know. 

Let’s take an example of the recently viral Wordle game. In this game, one can prove that one has the solution without revealing it. This can be done by sending a screenshot of one’s final board. With that, everyone will be able to confidently agree that one has the correct result even though they don’t have any knowledge of the actual answer. This is exactly the essence of zero-knowledge proofs.

Zero-knowledge rollups use ZKPs by combining many Layer 2 transactions (off-chain) into a single transaction. 

Rather than mining hundreds of transactions individually, it is possible to roll them up into one transaction. 

This one transaction qualifies as a validity proof, also known as STARK (succinct, transparent argument of knowledge) or SNARK (succinct, non-interactive argument of knowledge).

Eventually, mining this single transaction in place of numerous Ethereum transactions makes ZK-rollups considerably cheaper than using the Layer 1 chain of Ethereum.

Optimistic rollups force transactions to wait a certain period for fraud-proof. On the other hand, when a ZK-SNARK goes to Ethereum, the smart contract that receives it can instantly verify whether or not the proof is valid on-chain.

As verification of ZK-SNARKs happens instantly, it is possible to withdraw funds on ZK-rollups as soon as the mining of ZK-SNARK transactions takes place on Ethereum. This is way better than waiting for an extended period for the dispute period to end.

Validity proofs help avoid fraud without any manual verification or intervention. This makes confirmation of transactions with ZK-rollups much more scalable and faster than optimistic rollups.

Pros and cons of zero-knowledge rollups


Pros

Cons

Decentralised and secure as storage of the data which is necessary to recover the state occurs on the layer 1 chain.

Transaction ordering can be influenced by an operator.

Quicker finality time as verification of the state happens instantly after the proofs are sent to the main chain.

Some don’t feature EVM support.

These are not vulnerable to economic attacks, which optimistic rollups can be at risk of.

Computing validity proofs are intense and also not worth it for applications with little on-chain activity.

Final word

ZK-rollups are certainly a striking improvement over common scaling solutions. Notably, these are becoming highly popular among developers seeking to boost usability, along with traders and investors looking for cheaper and faster transaction processing.