ZK Rollups Definition and Overview
Zero Knowledge Rollups (ZK Rollups) are layer 2 scaling solutions that increase a blockchain’s scalability by moving computation off-chain while storing transaction data on-chain.
This approach offers layer 2s significantly lower gas fees and higher throughput, making it possible for developers to build on them without problems.
A key feature of ZK Rollups is their use of cryptography to verify transactions without compromising data privacy.
This addresses a key concern in blockchain technology, providing users with a reassuring level of privacy and security.
Importance of the ZK Rollups in Blockchain Technology
While most companies and individuals agree that blockchain tech is the future, they argue that the available solutions can’t be used for large-scale operations due to their lack of privacy and scalability.
Zero Knowledge Rollups change that completely, offering a solution for both these major problems and introducing more key features besides that.
Projects like Manta Network offer the same security as Ethereum while raising the potential throughput and lowering the costs.
How Zero Knowledge Rollups Work
Zero Knowledge Rollups work through a smart contract on any Layer 1 blockchain. This smart contract contains the state root, a Merkle tree that contains information on the rollup’s accounts, balances, and contract code.
Users send in new batches of transactions, along with the old and new state roots. Then, the contract checks if everything matches up and updates to the new state. Ensuring the integrity of the post-state root is critical.
ZK Rollups tackles this issue through a distinct mechanism: validity proofs. These validity proofs form the backbone of ZK-Rollups, guaranteeing the absence of tampering. Each new transaction batch is accompanied by a zk-SNARK or zk-STARK, a cryptographic construct known as an argument of knowledge.
These arguments prove the batch computation produces the same result as the new state root. Thanks to the highly complex math behind this technology, the heaviest computations can be verified quickly on-chain.
Benefits of Zero Knowledge Rollups
ZKPs can make certain digital processes considerably more efficient and can be used in privacy applications. There are many use cases for blockchains, as well as in broader areas of economics.
For blockchains, ZKPs can improve scalability or protect privacy, such as when using the Zcash cryptocurrency. This technology can also create more computationally potent blockchains than the existing Layer 1s and Layer 2s.
All this while maintaining super-low transaction costs and fees. For example, sending a transaction on Ethereum costs around $8, while sending a transaction on Mantra costs only $0.08.
What is the Difference Between Optimistic and ZK-Rollups?
The biggest difference between Optimistic and Zero Knowledge Rollups is that ZK Rollups use validity proofs while Optimistic Rollups use fraud proofs.
This means that ZK rollups eliminate the need to store verification-only data on-chain due to zk-SNARKs, unlike optimistic rollups, which require it for fraud checks.
Besides that, ZK Rollups are more private than Optimistic Rollups, while Optimistic Rollups are slightly cheaper due to reduced gas usage.
Optimistic Rollups are more used than their Zero-Knowledge counterparts because they are better suited for general-purpose EVM computation.
Conclusion
ZK Rollups are a type of layer 2 blockchain that moves computation off-chain while storing transaction data on-chain to offer better privacy and higher throughput.
ZK Rollups are cheaper to use than usual layer 2s but a little more expensive than Optimistic Rollups. Instead, they offer top-notch privacy and security of transaction data.
Berentsen, A., Lenzi, J., & Nyffenegger, R. (2023). An Introduction to Zero-Knowledge Proofs in Blockchains and Economics. Federal Reserve Bank. 2024, https://files.stlouisfed.org/files/htdocs/publications/review/2023/05/12/an-introduction-to-zero-knowledge-proofs-in-blockchains-and-economics.pdf
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