What is ZK Technology? Why is it so hot in the ETH community?
Bear market, bear market and the bear market. All charts and tables are bleeding badly and BTC & ETH prices are at an all-time low after 2019. This is just one side of the story, on the other side, there is a coin that is rallying against the bear market. Its price almost doubled in a month. Twitter was flooded with its news last month. Yes, it is Polygon’s Matic. Polygon is an L2 scaling solution for L1 Ethereum. The buzz is created when the Polygon team announced the Polygon zkEVM, an Ethereum scaling solution using zk-Rollups, on July 20, 2022.
This post will attempt to answer some key questions like what is ZK Technolgy? what are ZK-proofs? why the Ethereum community is so excited about it? What is Polygon doing in ZK-Tech space? What does it mean for other ecosystems like Cosmos? and along with the brief introduction of ZK proofs and its history.
What is the relevance of ZK Tech in Blockchain especially for Ethereum?
Ethereum is a general-purpose blockchain network with the support of smart contract execution. It is the most adapted and biggest blockchain community in the world. Thousands of hours have been put into building technology, economics and tools around the ecosystem. There are thousands of apps built on top of Ethereum and its L2 Solutions.
With the increased adaption of DeFi (Decentralised Finance) and NFT (Non-Fungible Tokens) projects on Ethereum, it required higher throughput to build large-scale products. Inherently Ethereum suffers from scalability in terms of high gas fees and low TPS (Transactions per second). To solve the problem of scalability of the Ethereum network, the ETH community came up with solutions like State Channels, Sidechains, Plasma Chains and now Rollups.
In simple words, State Channel is a process by which users transact with one another that is verified off-chain and settled in the Ethereum mainchain. But State Channel suffers from a lack of availability of all the participants involved. Also, it is not possible to send funds to external users who are not part of state channels.
The sidechain concept was basically to run another blockchain alongside some Ethereum mainnet. These two blockchains could then talk to each other in a special way that made it possible for assets to move between the two chains. The Major cons of sidechains are that the sidechains consensus mechanism can stop producing blocks and lock everyone’s funds up forever.
Plasma chains are sort of like sidechains. However, unlike sidechains, the “root” of each plasma chain block is published to Ethereum. This block root can be used to withdraw fund from the Ethereum mainnet in case the Plasma chain consensus get compromised. Plasma chains suffer from a data availability problem. If a malicious operator advanced an invalid transition on the plasma chain, users would be unable to challenge it since the operator can withhold data needed to create the fraud-proof.
Rollups are currently a hot scalable solution in which hundreds of transactions are bundled into a single transaction on the Ethereum chain. This drastically reduces the gas fee. Rollup transactions get executed off-chain but transaction data will be posted to the Ethereum network. There are two types of rollups: 1) Optimistic Rollups and 2) ZK-Rollups.
Optimistic rollups are ‘optimistic’ in the sense that transactions are assumed to be valid, but can be challenged if necessary. If an invalid transaction is suspected, a fault-proof is run to see if this has taken place. Optimistic rollups are subject to a delay to allow anyone to challenge the exit transaction with fraud-proof.
ZK- rollups use validity proofs where transactions are computed off-chain, and then compressed data is supplied to Ethereum Mainnet as a proof of their validity called ZK-Proof. ZK-rollups are hybrid scaling solutions that derive security from Ethereum. So it is considerably safer than pure off-chain scaling solutions.
Introduction to ZK-Proofs:
ZK Proof (Zero Knowledge Proof) is a cryptographic protocol in which one party(provers) allow data to be verified by another party (verifier) without revealing the actual data. ZK proof was initially proposed in 1985 by three MIT researchers namely Gold Wasser, Micali and Reckoff in their paper named “The Knowledge Complexity of Interactive Proof-Systems”.
What is ZK-Technology?
In a nutshell ZK technology is a collection of ZK proof-based protocols like STARK (Succinct Non-Interactive ARguments of Knowledge), SNARK (Scalable Transparent ARgument of Knowledge), VPD (Verifiable Polynomial Delegation) and SNARG (Succinct Non-interactive ARGuments).
Why Ethereum community is excited about ZK-Tech?
The Ethereum community is envisioning to bring more than 1 Billion users to Ethereum and apps build on top of it. If anyone wants to build a payment solution like Visa on Ethereum, high throughput is a bottleneck. Currently, Ethereum is being operated at 11 TPS which is dead slow for any fintech application. A scaling solution like ZK-Rollups solves this scalability issue and brings high throughput to the Ethereum Network.
According to Vitalic Buterin, the founder of Ethereum, Using ZK-Rollups increases Ethereum’s TPS to ~ 4807 optimistically. With upcoming Eth2 PoS changes, with help of ZK-Rollups Ethereum can beat the ~100K TPS. This is huge news for the Ethereum community and dApp developers as they can build mass-scale mainstream applications on Ethereum. So everyone is very excited about ZK-Tech and its advancements.
What is Polygon doing in ZK-Tech space?
Polygon is a decentralised Ethereum scaling platform which started as L2 for the Ethereum network. Polygon started as Matic Network which is a hybrid plasma chain to scale Ethereum. Currently, It is the most famous and trusted scaling solution for Ethereum. Polygon announced a ZK-Thesis (Strategic Focus on ZK Technology) last year in which it allocated $1 billion to acquire world-class ZK projects and teams, to design and develop zk based solutions and for top-notch research and development of ZK systems.
What does it mean for other ecosystems like Cosmos?
ZK-Rollups solve two most important things: 1) Fast verification (Speed) and 2) Zero-Knowledge (Privacy). Since scalability is the inherent property of tendermint/cosmos-based networks, we can ignore ZK-rollups for scalability at the moment. Whereas ZK-Tech can be used to build privacy in the cosmos-based blockchains network. User privacy can be protected while keeping the networks open in public, decentralized and secured.
Conclusion:
ZK proof is one of the fascinating technologies in cryptography. Of course, we have to deal with lots of mathematical complexity to implement the ZK-Proof system. It is just a start, as this technology advances further, it could unleash lots of possibilities to build faster, cheaper and privacy in-built blockchain solutions for the world and industries.
Who we are? What do we do?
We, Vitwit, are a team of engineers predominantly working in the Cosmos Ecosystem. We are one of the core contributors to Cosmos-SDK modules. We run validator infrastructure for Major Cosmos Networks and Polygon Network. Witval is our validator infrastructure arm. We are builders of Aneka.io, an interchain block explorer with rich analytics. Know more details about us on our website at https://vitwit.com
References:
https://en.wikipedia.org/wiki/Zero-knowledge_proof
https://vitalik.ca/general/2021/01/05/rollup.html
https://blog.polygon.technology/a-gentle-introduction-to-zero-knowledge-proofs
https://phemex.com/blogs/what-is-transactions-per-second-tps
https://usa.visa.com/about-visa/newsroom/press-releases.releaseId.17071.html
