Day 9: A Non-Technical Primer on ZK-Rollups
Understanding the Benefits, Risks, and Use-Cases for Zero-Knowledge Proofs
Cover Art by Tonytad
Note: The original post was published on Bankless Publishing in October 2023. I've updated this piece to reflect new developments in the zero-knowledge ecosystem since then, including additional projects, emerging use cases, and refreshed resource links to ensure the information remains current and valuable for readers exploring this rapidly evolving technology.
High-Level Concept
A ZK-rollup (ZK stands for zero-knowledge) is a layer 2 scaling solution for blockchain networks. This type of rollup enables the bundling of multiple transactions into one and confirm that all of them are valid, without revealing any of the details about those transactions. In other words, it’s a way to demonstrate that you know a secret without showing it. All computations are performed offchain and only a hash of the results of that computation is stored onchain and can be verified by anyone.
While that’s the TL;DR, below we’ll provide an overview of rollups, discuss the pros and cons of ZK-rollups, explore the history of zero-knowledge proofs, highlight a few projects utilizing ZK-rollup technology, and conclude by outlining potential use cases.
Rollups Introduction
There are two types of rollups with different security models: Optimistic and Zero-knowledge.
Optimistic rollups assume transactions are valid by default and only run computation via a fraud-proof. Fraud proofs are a type of proof submitted by a verifier that challenges a transaction state.
Zero-knowledge rollups run computation offchain and submit a validity proof to the chain. Validity proofs are ways to scale Ethereum using cryptography.
The infographic below tabulates the difference between the two.
Benefits of ZK-rollups
Increased privacy: They enhance privacy and security because not all information needs to be stored onchain, only a hash. Therefore, sensitive information remains confidential and information can still be validated and verified. This is only possible because of ZKPs (zero-knowledge proofs), cryptography, and the math behind it. You no longer need to trust intermediaries or any particular person or entity. You just need to trust the math and that is cryptographic truth.
Faster Settlement: Once the proof is submitted and verified, the funds and transactions are instantly confirmed, allowing for quicker withdrawal or access to your assets.
Security: ZK-rollups are considered more secure than other layer 2 solutions because they use zero-knowledge proofs to ensure that transactions are valid and that states onchain and offchain are consistent.
Disadvantages of ZK-rollups
With regards to proof generation, they are computationally and memory intensive.
Some implementations of zero knowledge such as trusted setup are prone to misuse if the prover and verifier act dishonestly.
Zero-knowledge proofs use the statement (called a ‘witness’) as input to generate a succinct proof of its validity. This witness is the secret information shared between the prover and verifier and used to generate the proof. If the witness were to be leaked or compromised, any malicious actor could potentially use it to generate fake proofs.
Now that you know what ZK-rollups are and their potential benefits, let us take a look at some of the projects doing exciting things with them. But first some background.
Background
ZKPs were first introduced in the 1980s by three MIT researchers, Shafi Goldwasser, Silvio Micali, and Charles Rackoff, in their paper, The Knowledge Complexity of Interactive Proof-Systems.
In recent years, the concept of zero-knowledge proof has gained popularity with the rise of blockchain technology, particularly in the context of privacy-enhancing technologies like Tornado Cash and Zcash, and more recently in scaling solutions like zkSync 2.0.
Below is a non-exhaustive list of some of the major projects working with ZK-rollups.
Projects
zkSync is a trustless protocol for scalable low-cost payments on Ethereum, powered by ZK-rollup technology. It was made by Matter Labs, an engineering team scaling Ethereum with zero-knowledge proofs. They did a full alpha launch of zkSync Era on Mainnet in March 2023. Currently, according to L2 Beat, they have a TVS (Total Value Secured) of $510.47 M.
Scroll is a security-focused scaling solution for Ethereum, using innovations in scaling design and zero knowledge proofs to build a new layer on Ethereum. When you use Scroll, your transactions happen on their network first, which is much faster and cheaper. Scroll uses advanced math called "zero knowledge proofs" to create a mathematical certificate that proves all these transactions followed Ethereum's rules correctly. According to L2Beat, Scroll has a TVS (Total Value Secured) of approximately $174.81 M.
StarkNet is a general purpose ZK Rollup based on STARKs and the Cairo VM. Created by StarkWare, it uses the Cairo programming language optimized for provable computation. StarkNet enables high-throughput applications through its advanced proving system that efficiently verifies large batches of transactions. L2Beat reports StarkNet's TVS at around $424.10 M.
Linea is a ZK Rollup powered by a zkEVM developed at Consensys, designed to scale the Ethereum network. It focuses on developer experience and compatibility while leveraging zero-knowledge proofs to compress and verify transaction data before settlement on Ethereum mainnet. According to L2Beat, Linea has accumulated a TVS of approximately $313.08 M.
Loopring is a zkRollup protocol specialized for trading and payment applications, emphasizing high throughput and low latency. It offers gas-free trades within its ecosystem and focuses primarily on decentralized exchange functionality. L2Beat data shows Loopring with a TVS of around $27.59M.
Polygon zkEVM is an EVM-compatible ZK Rollup built by Polygon Labs. It implements EVM equivalence using ZK-proofs to validate transaction batches, enabling faster finality and lower costs while inheriting Ethereum's security. L2Beat reports Polygon zkEVM's TVS at approximately $30.87 M.
Use Cases
Anonymous Payments: Transactions on the blockchain are transparent by default. Zero-knowledge technology is used to conceal transaction specifics, such as sensitive account and balance information thereby enhancing user anonymity and transaction privacy.
Decentralized Identity: Identity systems today require personal data to be revealed and for good reason. Zero-knowledge proofs offer a secure way to allow parties to verify they are who they say they are without having to reveal sensitive information. With current DID projects like Gitcoin Passport, individuals decide what information they want to share and with whom.
Compliance: Privacy Pools protocol, as mentioned in this Elsevier paper. The proposal discusses proving regulatory compliance without having to reveal their entire transaction history.
Fighting Disinformation: eg. image provenance as described in this article by Dan Boneh and Trisha Datta, Stanford University Applied Cryptography Group.
Authenticity: On a related note to the fourth use case, C2PA (Coalition for Content Provenance and Authenticity) proposed a standard that relies on digital signatures to verify image provenance, using ZK proofs to fight disinformation.
More Information
Ethereum.org complete guide to zero knowledge proofs: the complete version provides much more detail about each topic, including the technical explanations of how the proofs work.
Incomplete Guide to Rollups: Vitalik Buterin shares his reasons why ZK-rollups are expected to be a cornerstone of Ethereum scaling in the short, medium, and long term. He discusses the different kinds of scaling technologies, the math behind them, the current challenges of rollups, and the numbers behind them. Here’s a video version of the guide.
Podcasts: For audio learners, two standout options include the Zero Knowledge Podcast and Unchained.
5 Levels of Zero Knowledge Proofs from Wired.
From Zero to More Knowledge
At a high level, ZK-rollups rely on mathematics and cryptography (zero-knowledge proofs) which is a way for one party to prove that a statement is true to another party without revealing any information that the other party didn’t already know. To gain more knowledge about ZK-rollups, be sure to check out the additional resources for readers to dive deeper into this technology, and stay tuned for future content diving and dissecting this fascinating technology.
Author Bio
sianjon is a Product @pqcee_com building @web3_quantum | Contributor @BanklessDAO | Founder @brokenbrainsco
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Hiro Kennelly is a writer, editor, and coordinator at BanklessDAO, an Associate at Bankless Consulting, and is now and forever a DAOpunk.
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Designer Bio
Tonytad is a graphic designer who has worked locally and internationally with organisations and firms on over 200 projects, which includes branding, logos, flyers, cards, and covers.