As a seasoned crypto investor with a background in physics and finance, I can confidently say that I’ve seen my fair share of blockchain innovations. However, none have caught my attention quite like the work being done by Rob Viglione and his team at Horizen Labs. Their focus on scalability, efficiency, and zero-knowledge proofs is not just groundbreaking, but it’s also a game-changer for the future of web3.
Over an extended period, developers working with web3 have faced challenges in making their systems capable of handling large amounts of data. Often, when new technologies debut, they are initially built as all-in-one solutions. Yet, as these technologies grow and evolve, they tend to specialize, leading various companies to focus on distinct components of the system to improve scalability.
Currently, enhancements are being made to blockchain technology. Each tier within this tech stack is being optimized in a way that allows for easy modification (modular fashion). Web3 developers are embracing these modular improvements to cut costs, boost system efficiency, and enhance maintainability.
As a long-time Ethereum user, I’ve seen the platform evolve from a promising experiment to a major player in the blockchain world. However, I must admit that the high fees and slow transaction speeds have often made me question my loyalty. That is why I am thrilled about the emergence of L2 solutions like Arbitrum and Optimism. These platforms have transformed my experience by offering higher throughput and significantly lower fees compared to Ethereum’s L1. It’s like going from a congested highway to a well-maintained side road.
With the advancement of web3 technology, it’s evident that the key to future success is focusing on specific areas and improving efficiency within each layer of the system. By enabling specialized groups to master different parts of the system, we can unlock unprecedented levels of scalability and cost-effectiveness that were previously unattainable with one-size-fits-all designs.
ZK-rollups as the endgame for blockchain scalability
A clear path towards achieving scalability becomes more evident as we consider the growing use of zero-knowledge technology such as zero-knowledge rollups.
Blockchain scaling has found an ideal solution in ZK-rollups, which verify transactions using zero-knowledge proofs (ZKPs), ensuring data privacy while also enabling faster transaction validation and reduced gas fees. A tool like zkVerify, designed specifically for this purpose, serves as a prime illustration of this efficient approach.
On an L2 ZK-rollup chain, multiple transactions are grouped together before being transmitted to the main L1 as a solitary transaction. This consolidated transaction comes with a cryptographic confirmation, allowing for efficient verification of the entire collection of transactions.
ZKPs are expensive and computationally intensive
Currently, the major challenge with Zero-Knowledge (ZK) systems lies in effectively verifying and confirming Zero-Knowledge Proofs (ZKPs). This crucial step of “proof validation” confirms that a ZKP is cryptographically sound, which is indispensable for ZK-rollups to finalize transactions on the main chain (L1).
In optimistic rollups, verification of proof isn’t necessary because they utilize a distinct proof mechanism called fraud proofs. By default, all transactions are considered valid and security is ensured by allowing a challenge period during which anyone can submit evidence of fraudulent transactions if detected. However, this challenge period could last up to seven days, which delays the finality of transactions. Nevertheless, optimistic rollups have gained significant popularity as the preferred blockchain scaling solution today due to this trade-off between speed and security.
Instead of this setup, ZK-rollups group multiple transactions together with their associated state data. Then, they send this bundle to the base layer (L1) for verification. The L1 checks the proof of these transactions on the blockchain and updates the rollup’s state accordingly. This process ensures that all transactions are valid and offers immediate confirmation. By adopting this method, we can significantly boost transaction speed and offer stronger security assurances without requiring an extended challenge phase.
Modular ZKP verification is the solution
It’s great news that modularity doesn’t have to stop at the foundation level. Just as it has greatly enhanced the performance of primary chains such as Ethereum using a modular approach, this same strategy can be utilized for ZK-rollups as well.
In practice, how is this functioning? Similar to how Celestia manages data accessibility on its own blockchain, a self-contained chain can oversee the verification of proofs for ZK-rollups (and in fact, for any systems using Zero-Knowledge Proofs). While it processes these grouped transactions, it still confirms them on the primary L1 chain.
As an analyst, I can express it this way: “By delegating the task of proof validation to a modular service, ZK-rollups are able to concentrate on optimizing execution and enhancing user experience. The proof verification chain functions simultaneously yet independently alongside the ZK-rollup, ensuring its own integrity.”
As a crypto investor, I’ve found that adopting ZK-rollups significantly cuts costs by more than 90% and provides a more stable cost structure over time. Unlike traditional methods that are tied to Ethereum (ETH) gas fees, which can be erratic due to their volatility and unpredictability, ZK-rollups transfer the proof verification process to another layer, eliminating these price fluctuations.
To put it simply, this modular proof verification system has the ability to adapt and incorporate new advancements in cryptography faster than what’s currently possible with Ethereum L1. In other words, if there are new cryptographic solutions developed, a modular proof verification service can implement them within weeks, whereas on Ethereum, it might take years for these updates to become available.
Applying modular proof validation isn’t limited to just one type of Zero-Knowledge (ZK) technology; it extends to various decentralized applications (dApps) that utilize ZK proofs. In essence, a modular approach’s advantage lies in its adaptability, making it useful for any system requiring such validation.
As a crypto investor, I see the potential of standardizing the costly process associated with Zero-Knowledge Proof (ZKP) systems could bring substantial benefits across all blockchain networks. This move brings us one step further towards a future characterized by scalability and interoperability, where diverse chains can seamlessly work together.
So, what happens without modularity?
Examining the anticipated expansion of web3 in the next few years, it’s likely that the cost of validating proofs for ZK-rollups will significantly increase.
As a crypto investor, I’ve been closely tracking the growth of ZK-rollups on Ethereum. Last year in 2023, approximately $47 million was spent on verifying these proofs. It’s projected that this market could be worth an astounding $1.5 billion or even more by 2028! By the year 2030, it’s estimated that a staggering 90 billion proofs will be generated solely by decentralized applications. This trend is truly exciting and underscores the potential growth in this sector.
To ensure ZK-rollup technology can accommodate a massive user base like a billion people, it’s crucial to advance the costly proof verification process. If we don’t address this issue, scaling ZK tech could become an insurmountable challenge. It seems illogical for ZK-rollups and applications based on ZK tech to shoulder such high costs, and we shouldn’t burden blockchains unnecessarily, as it may slow down their growth and development.
With modular proof verification, the cost of verifying a single proof can drop from around $20 (considering a Groth16 proving scheme, gas price at 30 gwei, and Ethereum price at $3000) to around $1.80. This massive cost savings will unlock new frontiers of innovation in web3, including new ZK-apps, Bitcoin ZK-rollups, proving systems, and more. Any ZK-based chain or application can benefit from offloading its proof verification to a modular solution.
With an increasing number of zero-knowledge proofs (ZKPs) being produced in the web3 environment, it’s crucial to validate these proofs. Furthermore, given the growing modularity of the entire web3 ecosystem, it’s logical to extend this concept and apply it to ZKPs as well.
Rob Viglione, who served in the US Air Force, is now the head honcho at Horizen Labs – a studio responsible for some top-tier web3 projects such as zkVerify, Horizen, and ApeChain. While deployed to Afghanistan, he nurtured an initial fascination with Bitcoin due to its potential advantages for economically unstable nations. His professional passion lies in web3 scalability, blockchain optimization, and zero-knowledge proofs. He’s been working tirelessly on creating groundbreaking zk-rollups to boost scalability, minimize costs, and increase efficiency. Rob boasts a PhD in finance, an MBA in finance and marketing, and a Bachelor’s degree in physics and applied mathematics. Presently, he is a member of the Board of Directors for the Puerto Rico Blockchain Trade Association.
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2024-08-03 01:32