Introduction to Zero-Knowledge Rollups
Lower Fees, Faster Transactions, Security, and Privacy; What’s Not To Love About zk-Rollups?
WWe’ve all gotten used to the instant gratification that web2 has brought; and with all the exciting potential of web3, the masses will surely troop in. Before that happens, however, the web3 space needs to eliminate certain barriers, such as costly gas fees and slow transaction times on blockchains like Ethereum.
Scaling Ethereum is necessary for mass adoption of blockchain technology. Both optimistic rollups and zero-knowledge rollups (ZK-rollups) help pave the way for wider adoption by making transactions on Ethereum faster and cheaper.
Why Does Ethereum Need To Be Scaled?
Everything you do on a blockchain is a transaction: minting NFTs, sending coins to someone, swapping, staking, and yield farming. On a blockchain like Ethereum, all of these transactions cost ETH to pay for gas.
When the Ethereum Layer 1 blockchain (Mainnet) experiences high activity, the network becomes congested. High-activity congestion leads to slower transactions, higher transaction fees, and even failed transactions.
Scalability solves these problems with increased throughput speed and reduced transaction fees. This occurs without compromising Ethereum’s core principles: decentralization and security.
Scaling Solutions
Layer 2 solutions such as rollups have become popular scaling solutions. Layer 2s are built on top of Ethereum Layer 1. These solutions “roll up” multiple transactions into smaller bundles. The best part is that Layer 2 rollups are cheaper and faster.
There are two types of Layer 2 rollups:
- Optimistic rollups — “optimistically” assume transactions are valid and don’t publish proofs of validity, unless there’s a discrepancy.
- Zero-knowledge rollups (ZK-rollups) — handle computation and process transactions off-chain before submitting a bundled (rolled-up) version on Ethereum Layer 1 with proof of validity.
Layer 2s built on these scaling solutions offer DeFi, NFTs, games, DAOs, and everything else you can do on Mainnet, but enable you to interact with them for a fraction of the cost.
Scaling Ethereum is necessary for mass adoption of blockchain technology. Both optimistic rollups and zero-knowledge rollups (ZK-rollups) help pave the way for wider adoption by making transactions on Ethereum faster and cheaper.
For this article, we will focus on two popular ZK-rollups:
zkSync Era
Developed by Matter Labs, zkSync Era is a Layer 2 scaling solution for Ethereum. The protocol provides fast and low-cost transactions while maintaining the security of Mainnet. This is done using zero-knowledge proofs to bundle multiple transactions into a single proof. The proof is then submitted to Mainnet.
This approach allows zkSync to significantly reduce on-chain data while ensuring the validity and security of transactions.
Here are some examples of dApps running on zkSync Era:
- Kreatorland — a zkSync Era NFT marketplace and launchpad
- Ramp — a streamlined conversion between crypto and fiat (also on Starknet)
- Orbiter Finance — a decentralized cross-rollup bridge for transferring Ethereum-native assets
- Mute.io — a decentralized exchange (DEX) to invest and trade, earn yields, and participate in bonds all on a community-driven platform
- Argent — an Ethereum wallet to buy, earn, stake, and trade with up to 100x cheaper fees
- DeBank — a web3 native messenger and portfolio tracker covering tokens, DeFi protocols, and NFTs
- zkApes — an apes-thematic metaverse platform on zkSync Era
Visit the official zkSync ecosystem page to explore more dApp offerings.
Starknet
Starknet is a ZK-rollup protocol developed by StarkWare Industries. Like zkSync, it aims to address Ethereum’s scalability issues with zero-knowledge proofs.
The platform uses a technology called STARKs (Scalable Transparent Arguments of Knowledge). STARKs are cryptographic proofs that allow off-chain computation. This allows complex computations to be executed off the Ethereum network.
By moving most of the computation off-chain and only submitting proofs to Mainnet, both zkSync and Starknet can process complex smart contracts more efficiently. This alleviates congestion and reduces gas fees.
Here’s an overview of some dApps running on Starknet:
- 10KSwap — a Layer 2 automated market maker (AMM) protocol building on Starknet
- LayerSwap — offering instant and gasless on and off-ramp transactions to L2s, including from Coinbase and Binance, to Starknet and zkSync
- briq — an NFT building protocol
- Aspect — an NFT marketplace
- Starkboard — a dashboard tracking Starknet-related metrics
- Realms — an eternal on-chain game running on Starknet built by Bibliotheca DAO
- Voyager — a block explorer for Starknet
Be sure to visit the Starknet Ecosystem to explore more dApps.
Knowledge Is Power
Blockchain technology has given us exciting games, NFTs, DAOs, and decentralized finance. But gas fees on Mainnet can be costly and transaction times can be slow. Layer 2 rollups offer new promises and possibilities for scalability.
ZK-rollups aim for scalability by helping congestion and improving gas fees, all while maintaining our security and privacy. This is what’s needed for the mass of web2 folks to migrate to web3 and to provide a seamless user experience for interacting with dApps.
Sources and Further Reading
- “Zero-Knowledge Rollups” by d1onys1us, Ethereum.org, May 5, 2023. https://ethereum.org/en/developers/docs/scaling/zk-rollups/
- “Scaling” by Corwin Smith, Ethereum.org, April 7, 2023. https://ethereum.org/en/developers/docs/scaling/
- “What Are ZK Rollups? The Future of Smart Contract Blockchains” by John Gilbert & John Lee Quigley, Blockworks, Dec. 1, 2022. https://blockworks.co/news/zk-rollups-future-of-smart-contract-blockchains
This article was published in collaboration with the BanklessDAO Writers Cohort.
Author Bio
klouie is a librarian with a passion for blockchain and crypto.
Editor Bio
Kornekt is a Writer, Staff Editor, and Content Manager at Bankless Publishing. He is deeply fascinated by crypto, web3, and blockchain technology.
Designer Bio
Tonytad is a graphic designer who has worked locally and internationally with organisations and firms on over 200 projects, which include branding, logos, flyers, cards, and covers.
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