zkSync 2.0 is compatible with EVM, breaking the technical bottleneck of ZK Rollup

According to L2Beat data, the total amount of crypto assets locked in the zkSync network (TVL) has exceeded 140 million US dollars, an increase of 38% in 7 days. zkSync is an Ethereum Layer2 network based on the ZK Rollup expansion solution. Currently, its TVL growth ranks first among many Layer2 networks, which shows that more and more funds and users are experiencing the zkSync network and its applications.

Before the Ethereum mainnet is officially upgraded to 2.0, one way to solve the on-chain congestion is to build a Layer 2 network (Layer 2) that can perform most activities outside the chain to alleviate the computing and storage pressure on the mainnet and increase the scalability of Ethereum.

Among the various technologies that build Layer2 networks, Rollup is gradually considered to be the best solution because it can complete the actual calculation and storage of smart contracts off-chain, and submit and save transaction data in batches on the Ethereum mainnet through a series of compression techniques, without the need to verify each piece of data one by one. In this way, the security of the layer2 network can not only be guaranteed by the Ethereum mainnet, but also increase the scalability and efficiency of the network without destroying the decentralization of the network. More importantly, Rollup allows applications on the Ethereum mainnet to be easily migrated to Layer2.

The construction of Layer2 network is realized by using Rollup technology, and different paths are formed due to different cryptographic verification algorithms. Optimistic Rollup, ZK Rollup, and Arbitrum Rollup have become the mainstream solutions. At present, Layer2 networks that apply various solutions have made achievements, and various schools are developing in research and development and practice.

Among them, ZK Rollup uses the "zero-knowledge proof" verification method to implement the Rollup expansion plan, and is regarded by Ethereum founder Vitalik Buterin as the ultimate choice for Layer2.

The recent surge in TVL of the zkSync network further verifies the feasibility of ZK Rollup. Especially since zkSync launched version 2.0 of the public test network in February this year, the ZK Rollup expansion technology solution that supports it has also attracted more and more attention from the blockchain technology community.

So, what exactly is the ZK Rollup scaling solution? What is the difference between it and Optimistic Rollup and Arbitrum Rollup? In addition to zkSync2.0, which other networks use ZK Rollup technology? This issue of DeFi Cell will answer them one by one.

ZK Rollup Solution Overview

Introduction

ZK Rollup is a layer 2 solution that implements Rollup technology based on the "zero-knowledge proof" verification method. "ZK" is the abbreviation of "Zero Knowledge". The solution originated in the second half of 2018 and was first proposed by blockchain technology researcher Barry Whitehat.

Retaining the principles of Rollup technology, ZK Rollup can complete complex calculations off-chain, generate proofs, transmit them back to the main network for proof verification, and store part of the data to ensure data availability and share the security of the main network.

The characteristic of ZK Rollup is precisely the "ZK" part. The "zero-knowledge proof" algorithm allows the prover to convince the verifier of the correctness of a result without providing any useful information to the verifier.

For example, A wants to prove to B that he has the key to a room. Assume that the room can only be unlocked with the key and cannot be opened by any other method. There are two ways: either A shows the key to B, and B uses the key to unlock the room, thus proving that A has the correct key to the room; or B determines that there is a certain object in the room, A uses the key he has to open the door, and then takes out the object and shows it to B, thus proving that he does have the key to the room.

The latter method is similar to zero-knowledge proof. Its advantage is that during the entire proof process, B cannot see the key, thus avoiding the key leakage.

Zero-knowledge proof is an important technical means for blockchains that emphasize privacy, and the Bitcoin network is one of its applications. In addition to privacy, technical researchers have also begun to apply it to improve the performance of blockchains. ZK Rollup is one of them. It advocates that if a block requires a lot of data verification to complete packaging and open the next block, it may be better for one person to verify and generate a proof, and others can verify that the proof is correct. This avoids everyone having to spend a long time verifying a proof, thereby improving the efficiency of data verification.

Under the ZK Rollup solution, after multiple transaction data on the Layer2 network are packaged, a "zero-knowledge proof" result of off-chain calculation will be created, and the main network (Layer1) verifier can quickly check whether this proof is correct. Moreover, because the transaction data from Layer2 to Layer1 can be verified instantly, it can also achieve instant settlement when Layer2 assets are transferred to Layer1.

The difference between ZK Rollup and other Rollup solutions

ZK Rollup is an implementation method of building the Ethereum Layer2 network using Rollup technology. The other is mainly Optimistic Rollup. The difference between the two lies mainly in the different verification algorithms used.

Optimistic Rollup uses a "fraud proof" verification algorithm, and its premise is that the validator must pledge a certain amount of ETH "deposit" on the Layer2 network as an endorsement of "not lying". Under this premise, it assumes that all transactions on the Layer2 network are valid and that the data submitted to layer1 (Ethereum mainnet) is correct. If someone objects to any transaction, the data will need to be verified one by one on the Ethereum mainnet at this time. If the data submitted by any validator is problematic, it will be judged as fraud by the network, and the deposit of this validator will be confiscated.

Under this verification algorithm principle, when each batch of transactions aggregated on Layer2 is submitted to Layer1, there will be a 7-day objection submission cycle. This also adds a 7-day waiting period when users withdraw or exit encrypted assets from the network under the Optimistic Rollup solution.

This not only makes the experience of Optimistic Rollup-related networks unfriendly, but more troublesome is that once dissenting data appears, all transaction data must be re-verified on the main network, which in turn increases the burden on the main network.

Therefore, to address this pain point, Arbitrum Rollup has made improvements on Optimistic Rollup. It advocates dividing the disputed part into blocks first to find out the most controversial part. The Ethereum mainnet only verifies the disputed part to alleviate the verification burden of the mainnet.

In addition, the progress of Arbitrum Rollup is that it has achieved compatibility with EVM, which allows the layer2 network that uses this technology to carry the seamless migration of applications on the Ethereum mainnet. Therefore, many DeFi applications choose to deploy the "Arbitrum version". In contrast, the Optimistic Rollup expansion solution has not yet achieved 100% compatibility with EVM.

It can be seen that the Arbitrum Rollup solution is an "improved version" of Optimistic Rollup. Nevertheless, there is still a waiting period when funds exit from the Arbitrum Rollup-related network, and this pain point needs to be improved.

In terms of compatibility with EVM, ZK Rollup has also been difficult to make a breakthrough. Ethereum founder Vitalik Buterin (nicknamed V God) once said in a public speech that due to the complexity of the underlying technology of ZK Rollup, it may take several years to achieve full compatibility with the Ethereum virtual machine. In the short term, Optimistic Rollup is a viable option for Ethereum's expansion plan, but in the long run, ZK Rollup will be more preferred.

With this comment from Vitalik, ZK Rollup is considered the "holy grail" of Ethereum's scaling solution.

Surprisingly, the development progress of ZK Rollup compatible with EVM is much faster than expected. In February of this year, the zkSync 2.0 public beta network using the ZK Rollup solution was launched, which is compatible with EVM. This means that in the near future, the ZK Rollup solution will no longer be shelved, and the network based on it will usher in the migration of applications.

Currently, the main players in the Layer 2 implementation of the ZK Rollup solution are StarkWare and zkSync.

zkSync continues to upgrade to complete EVM compatibility

In 2019, the MatterLabs team began to develop the zkSync network using the ZK Rollup expansion solution. In June 2020, zkSync 1.0 was launched, focusing mainly on payments. As a Layer 2 expansion layer, the transfer fee on the zkSync 1.0 chain is extremely low, and the transaction processing is fast. The fee is not limited to ETH. Other Ethereum standard assets transferred using the network can also be used as fees. Assets entering and leaving the Ethereum mainnet generally take a few minutes to a few hours.

zkSync official website

Currently, users can activate zkSync network accounts by authorizing Ethereum wallets. Assets such as ETH and USDT under the ERC-20 standard can freely enter and exit the network, and assets can be transferred to other zkSync accounts.

Since zkSync1.0 is not compatible with EVM, the availability of the network is limited and the application scenarios it can support are very limited. However, due to the low transfer fees and instant arrival of funds, the main application direction of zkSync1.0 is still payment.

In February of this year, the public testnet of zkSync 2.0 was launched, achieving EVM compatibility, making it the first blockchain network to utilize the ZK Rollup solution and be compatible with EVM.

zkSync2.0 supports developers to deploy decentralized applications on the network using Ethereum's native programming language Solidity. Existing DeFi applications on the Ethereum mainnet can also be integrated into the zkSync2.0 network, allowing developers and users to use this Layer2 network at low cost and high efficiency.

Application Representative

• Decentralized Exchange Application (DEX) ZigZag

ZigZag did not adopt the automatic market maker (AMM) mechanism commonly used by DEX, but instead adopted a decentralized order book model. This is the convenience brought by the natural "aggregation" of the underlying ZK Rollup technology. It allows traders to conduct spot transactions with minimal slippage and high liquidity orders, attempting to become an on-chain alternative to centralized exchanges (CEX).

• Layer2 cross-chain bridge Orbiter Finance

Orbiter Finance is a cross-chain bridge built for Layer2 networks. It supports cross-chain asset transfers between Layer2 networks such as zkSync, Arbitrum, Optimism, and also supports asset transfers between Layer2 and Layer1.

StarkWare systematically creates Layer2

StarkWare can be regarded as a company. It was founded in 2018 and has a complete set of Layer2 system solutions. In particular, it has innovated the zkSTARK algorithm based on "zero-knowledge proof" to further enhance the scalability of the network. It has also productized this algorithm and formed two landing modules: StarkNet (Layer2 expansion network) and StarkEx (expansion technology).

StarkWare official website

• StarkNet

It is a Layer2 network built on Ethereum. The test network was launched in November 2021, supporting developers to deploy applications. Users can send transactions to the network, and all transactions will be batched regularly to generate STARK proofs, which are then verified on the Ethereum mainnet. Since verification requires very little computation, the processing efficiency on the chain is improved.

Since StarkNet is not yet compatible with EVM, it has not been migrated by Ethereum's top DeFi applications. Currently, the main applications on Layer2 are decentralized trading applications (DEX) Myswap and one-stop trading applications JediSwap.

• StarkEx

It is a set of scalable engine technologies that specializes in providing scalability solutions and program services for Ethereum applications. It has been used in many well-known decentralized applications, including the decentralized perpetual contract trading application dYdX, the decentralized trading application DeversiFi, and the NFT ecosystem Immutable X.

As a futures trading platform, dYdX (DYDX) requires high-speed settlement. StarkEx helps it greatly improve the settlement speed and enhance the user experience.

DeversiFi is the first DEX to adopt the StarkEx scaling engine. It uses an order book model, which is implemented by processing transactions off-chain and completing settlements on-chain. In the past, the on-chain settlement method had high performance requirements for the chain, and Layer1 networks had constraints on this. Now, the StarkEx engine solves this problem. It provides instant settlement, high liquidity, and low slippage for non-custodial transactions. In addition, DeversiFi uses the privacy layer of the zkSTARK algorithm to well guarantee the transaction privacy of users.

Immutable X is Ethereum's Layer 2 expansion solution for NFT assets. It is built on the StarkEx engine. The assets and transaction data on the network are protected by Ethereum, so users do not need to worry about security issues. More importantly, StarkEx supports the withdrawal of assets to the Ethereum chain for instant arrival, without a 7-day interval. Currently, the card game Gods Unchained (GODS), the combat role-playing game Illuvium (ILV), etc. have chosen to integrate with Immutable X to provide users with a fast, 0 Gas fee transaction experience.