The Future of Blockchain Scalability: Part 3 - Exploring the Landscape of Zk-Rollups Technology and Its Pioneers
This article offers an in-depth analysis of the primary representatives of ZK-Rollup technology, more specifically zkSync, Starknet, Polygon zkEVM, and Scroll.
Abstract: ZK-Rollup has emerged as a groundbreaking Layer 2 scaling solution, designed to improve the scalability, privacy, and efficiency of blockchain networks. This article represents part 3 of our series; in part 1, we discussed the evolution of Layer 2 technologies, delving into innovations such as Bulletproofs and Plasma. In part 2, we took an in-depth look at the inner workings of Zk-Rollups technology. Now, in part 3, we will explore the practical applications and real-world use cases of ZK-Rollup implementations.
Section 1: Introduction
Section 2: Zk-Sync
Section 3: Starknet
Section 4: Polygon zk-EVM
Section 5: Scroll
Section 6: Conclusion
Introduction
The emergence of ZK-Rollup as a Layer 2 scaling solution has revolutionized the blockchain space by addressing critical challenges in scalability, privacy, and efficiency. By leveraging zero-knowledge proofs, ZK-Rollup technology enables high transaction throughput while maintaining on-chain data availability and security. As the adoption of this technology grows, numerous innovative projects have surfaced, each bringing unique features and contributions to the broader blockchain ecosystem.
This article offers an in-depth analysis of the primary representatives of ZK-Rollup technology, more specifically zkSync, Starknet, Polygon zkEVM, and Scroll, highlighting their distinctive capabilities and their impact on reshaping the future of blockchain networks.
zkSync
zkSync was launched in 2018 by Matter Labs, a Germany-based company founded by Alex Gluchowski. As a Layer 2 scaling solution, zkSync focuses on addressing the scalability challenges faced by Ethereum and other blockchain networks.
The platform employs zero-knowledge proofs and a range of programming languages and compilers to achieve compatibility with Ethereum Virtual Machine (EVM) and ensure seamless integration with existing blockchain infrastructure.
Codebase: Solidity, Vyper, Rust, Yul (via compilers). Zinc (native programming language).
Gas payment: ETH and other tokens (due to Account Abstraction support)
Total raised: $458m
Token: No token currently available.
Technical Overview
zkSync is powered by Plonk, a highly efficient zero-knowledge proof system. It boasts 99% compatibility with EVM, Solidity, and Vyper, through the use of intermediate languages and compilers. To achieve this compatibility, Solidity and Vyper code must first be compiled to Yul, an intermediate language, before being compiled to zkEVM bytecode via LLVM. In addition to these languages, zkSync also supports its native, zero-knowledge proof-optimized language called Zinc.
zkPorter puts data availability — essential transaction data needed to reconstruct state — offchain rather than on Ethereum. Instead, the data remains available using a proof-of-stake (PoS) mechanism, where stakers are zkSync token holders. This enables much higher scalability (tens of thousands TPS), and as a result, ultra-low transaction fees comparable with sidechains (in the range of a few cents).
The availability of zkPorter account data will be ensured by zkSync token holders, called Custodians. They will monitor the state on the zkPorter side, signing blocks to confirm the availability of zkPorter account data. Custodians participate in share confirmation (PoS) with the zkSync token, so any failure in data availability will result in a data cut. This gives crypto-economic guarantees of data availability.
At the current block gas limit of 12.5 million, zkSync can process over 2,000 transactions per second.
Because zkEVM at zkSync has greater compatibility with EVMs, the zkSync network has the most applications from the Ethereum ecosystem. This has also contributed to zkSync having the largest ecosystem and TVL of any zk-rollups. And consider the fact that zkSync has, according to various sources, raised the largest amount of funds, which can also stimulate ecosystem development - a total of $458m was raised, of which $200m was for ecosystem development (in January 2022 from BitDAO). Interestingly, several venture capitalists and investors repeated their investments during the following rounds.
Total Value Locked (TVL)
TVL is currently split between zkSync Lite, which is the first implementation of the protocol without support for smart contracts, and zkSync Era, which launched on 24 March and supports smart contracts.
- zkSync Lite TVL:
All Time High: $176,8m
Current $85,4m
Interestingly, the launch of zkSync Era did not cause a decline in zkSync Lite's TVL. Instead, the TVL in zkSync Lite experienced a slight increase, along with the highest on-chain activity ever recorded.
- zkSync Era TVL:
The total value locked (TVL) in zkSync Era has experienced consistent growth since its inception on March 24th, with the current figure reaching $246 million.
It is also worth mentioning that the TVL is heating up as well because of the possibility of an airdrop. zkSync has gained all the attention following the successful Arbitrum airdrop in March.
Ecosystem
As previously mentioned, the zkSync ecosystem has attracted a substantial number of applications migrating from L1 Ethereum due to its robust EVM compatibility. Additionally, numerous wallets have added support for this Layer 2 solution. The zkSync website's ecosystem section currently showcases 260 listed applications. It is important to note, however, that a majority of these applications are cross-chain compatible, and some are exclusively wallets.
Despite the expanding zkSync ecosystem, the selection of assets on DeFi venues remains relatively limited at present. Commonly available assets include ETH, wETH, USDC, and native tokens of the decentralized applications themselves, such as Mute and OnchainTrade. As the zkSync ecosystem continues to grow and evolve, the variety of assets and applications is expected to increase, further solidifying its position as a leading Layer 2 solution.
Social activity
Twitter - 808k Followers. A huge number of projects, foundations, their representatives and Influencers.
Discord - 433,831 members, 42,370 online
Starknet
StarkNet, a Layer 2 scaling solution powered by zkSTARK, has emerged as a promising player in the blockchain ecosystem. Developed by Starkware in 2019, the first version of the network was launched in November of the same year.
Codebase: Solidity, Rust, Python (via compilers). Cairo (native programming language).
Gas payment: ETH and other tokens (due to Account Abstraction support)
Token: No data
Total raised: $270m
Technical Overview
In StarkNet, when users initiate transactions, the first step towards achieving STARK scaling involves the sequencer. Within the StarkNet protocol, sequencers hold the responsibility of ordering transactions and generating blocks.
Rather than recording transactions on the chain, StarkNet exclusively captures the state changes resulting from these transactions on the L1 chain. Following the sequencer's approval by the consensus protocol, provers assume control, generating a proof for L1 to maintain the network's security and integrity.
Starknet TVL:
Current: $35m
StarkNet has experienced a surge in on-chain activity and total value locked (TVL) growth since March 14, 2023. This increased interest can be attributed to the heightened activity of airdroppers, which has been notably driven by the success of the Arbitrum airdrop.
It is important to highlight that the StarkNet ecosystem is currently less extensive compared to zkSync, particularly when examining wallet support. Presently, only two wallets cater to StarkNet users - ArgentX (independently developed from Argent) and Braavos. This limited support can be attributed to the increased complexity of StarkNet for developers, primarily due to the Cairo language.
In addition to this, StarkNet currently has centralized structure in comparison with other alternatives, and faces several challenges, such as:
- Users may encounter issues such as funds can be stolen if a contract receives a malicious code upgrade.
- Lost transactions during swaps (as they may not be incorporated into the sequencer), or mishandling of user funds when transferring assets via the official StarkGate bridge.
- MEV can be extracted if the operator exploits their centralized position and frontruns user transactions.
- Users can be censored if the operator refuses to include their transactions.
These drawbacks highlight areas for potential improvement as the StarkNet ecosystem continues to evolve.
Ecosystem
The DeFi section of the ecosystem page on the official Starknet website lists 53 apps, including wallets, launchpads, NFTs, payment services, social solutions, and even a project that tackles forest planting and CO2 emissions. Unfortunately, projects with a significant TVL on StarkEx are not transitioning to StarkNet but opting for alternative networks:
Social Activity
Starkware Twitter: 195k Followers. The followers include many projects, foundations, their representatives and Influencers.
Starknet Twitter: 65,6k Followers. A relatively small number of interesting followers.
Discord: 67,133 members, 13,275 online
Polygon zkEVM
It all started when Polygon decided to start developing L2 solutions and allocated $1b for this as part of the Polygon Thesis program. As a result, several teams were created and worked on different solutions in parallel. These solutions include:
Polygon Avail - a modular blockchain, data availability solution, similar in functionality to Ethereum in the form of L1.
Polygon Nightfall - an optimistic/zk hybrid storage solution focused on privacy for enterprises.
Polygon Hermez - its special feature is that it runs simultaneously on zkSTARK and zkSNARK. SNARK as Growth16 is used to hash and reduce the size of STARK. This is a rather odd solution since SNARK as originally implemented by Growth16 still requires a trusted installation. PoE - Proof of Efficiency - is proposed as a consensus algorithm, the emergence of which is justified by the fact that supposedly in a PoS network not every validator with a stack can provide guarantees that it has enough power to generate zk. It's also interesting that Polygon claims that Hermez is the first ever decentralised ZK Rollup on the Ethereum core network, which doesn't sound too plausible. Also Hermez is behind the roadmap and development may have already been discontinued, despite having a decent technical team as of 2021. It is also worth noting that some of the documentation has been removed. Polygon Hermez's last blog articles were 2 years ago.
Polygon Miden is a universal storage solution based on zk STARK with hybrid UTXO. Miden is the native language of Miden VM, and plans to include support for Solidity and Move. Overall, there is rather little information, no ecosystem and no blockchain explorer is avialable. Polygon Miden GitHub is regularly updated, as is the documentation.
Polygon Zero - the Polygon Zero team has created the world's fastest zk proof technology, which is extremely efficient to run. This means you can run zk proofs on a macbook. Polygon are presenting this as a breakthrough technology, which is also wrong, because the Aztec team, which uses Plonk, was able to generate proofs on a Microsoft Surface tablet. Polygon Zero also uses Plonk, but as a modification of Plonky2.
Finally, the most recent implementation, which we will take a closer look at, is Polygon zkEVM.
Technical Overview
Polygon zkEVM is an extension of Polygon Hermez and runs on STARK (but actually Polygon zkEVM also uses SNARK, just like Hermez) and allows Ethereum equivalence, allowing developers and users to host existing contracts from EVMs.
Polygon claims in the documentation that their zkEVM solution is the first to implement recursive STARK, which is incorrect, since recursive STARK was originally started by Starkware, positioning it as L3.
EVM-equivalence is when applications require code changes and Solidity/Vyper code is translated into virtual machine byte-code. EVM-equivalent is when applications are ported from Ethereum key to key, EVM bytecode is directly interposed or translated into virtual machine bytecode.
Further examination of Polygon zkEVM's technology reveals similarities to Starkware's solutions, such as the Validium offchain data availability solution and the Volution onchain data availability solution. However, it is crucial to note that Polygon zkEVM provides EVM-equivalence, whereas StarkNet's EVM-compatibility falls short in comparison.
Polygon zkEVM ensures correct state transitions through smart contract validation checks using zk-SNARK schemes. The system relies on two types of participants to facilitate these processes:
Sequencers - responsible for bundling transaction requests into packets and submitting them to the Consensus Contract. Sequencers must pay a fee in MATIC tokens for the right to create and offer packages. It is worth noting that the Sequencer role is centralized, which carries risks of censorship or failure.
Aggregators - tasked with verifying the validity of transaction packets and providing proof of validity. Any unauthorized aggregator can submit proof, demonstrating that the state transition calculation is accurate. Aggregators collect data, send it to the prover, receive the result, and ultimately submit the information to the smart contract for verification of the prover's credibility proof. In essence, Aggregators ensure the validity of L2 transactions proposed by Sequencers (similar to the Guardians mentioned in earlier versions of zkSync documentation). The aggregator who submits the validity proof first receives a MATIC reward (paid by the sequencer).
zkProver - utilized by each aggregator to verify packages and provide evidence of validity. The zkProver generates transaction proofs and returns these proofs to the node. The system comprises a Main State Machine Executor, a set of Secondary State Machines (each with its own executor), a STARK-proof builder, and a SNARK-proof builder.
Polygon zkEVM TVL:
Total Value Locked (TVL) in Polygon zkEVM has experienced a steady growth since its launch. However, it is noteworthy that user activity has remained relatively consistent throughout this period.
Although Polygon asserts that numerous applications run on zkEVM, including Lens, Balancer, ANKR, Alchemy, Sequence, and others, as well as the ease of deploying Ethereum applications, the TVL remains relatively low. This could be indicative of untapped potential or a need for further exploration and development within the Polygon zkEVM ecosystem.
Social activity
Zk solutions from Polygon do not have separate social networks, it only have separate documentation.
Scroll
The emphasis is on EVM compatibility, type 2-3 EVM compatibility. The main part of Scroll is zkEVM, which is used to validate EVM operations on the Scroll network. But while Scroll shows the highest level of Ethereum compatibility, it has the lowest performance because there is a lot of overhead involved in setting up the scheme.
Codebase: Solidity, Rust, Go.
Total raised: $83m (the last round was 06.03.2023).
Technical Overview
Scroll node: creates blocks on Layer 2 from user transactions, commits them to the Ethereum base layer and passes messages between Layer 1 and Layer 2. It is consist of three modules: Sequencer, Coordinator and Relayer.
Roller Network: generates zkEVM validity proofs to prove that transactions are executed correctly. Rollers are expected to use accelerators such as GPUs, FPGAs and ASICs to reduce time and cost. (i.e. the generation of zk-proofs is taken out to the external loop)
Bridging and Accumulation Contracts: provides data availability for Scroll transactions, verifies zkEVM validity proof and allows users to move assets between Ethereum and Scroll
TVL: no data
Token: no data, but it is known that the last testnet is going on now, and there are plans to launch a mainnet, token, and possibly rewards for testnet in Q3 2023.
Social activity:
The size of the community is much larger than that of Starknet despite the fact that there is not such a well-developed ecosystem.
Twitter: 340k Followers. A huge number of projects, foundations, their representatives and Influencers are followers.
Discord: 275,804 members, 24,706 online.
Conclusion
Rollups have significantly evolved since the advent of Plasma. Currently, it appears that Zk-rollups are trailing optimistic rollups due to their novelty and continuous development, as evidenced by the numerous zkSNARK variations (Growth16, Plonk, Sonic, Marlin, and Fractal). As zkSNARK progresses, its gap with zkSTARK, which initially had unique features, is gradually closing. Moreover, newer, lighter, and faster technologies are consistently emerging (e.g., Intmax).
Examining the Zk-protocols, zkSync is the undisputed leader, with Scroll surprisingly ranking second in community size among the analyzed protocols. Despite its widespread recognition, Starknet seems to be relatively weaker in all aspects, primarily due to its limited EVM interoperability, resulting in a poor ecosystem and suboptimal networking. Polygon's zkEVM solutions appear highly fragmented with an underdeveloped ecosystem, even though Polygon zkEVM boasts EVM-equivalence. The transition from the current Polygon implementation to Polygon zkEVM is unlikely to be swift.
While skepticism exists, Zk-rollups appear structurally superior to optimistic rollups in the long term, primarily because they have not inherited Plasma's inherent drawbacks. Notably, Vitalik Buterin, who co-introduced Plasma with Joseph Poon, suggests in his article "An Incomplete Guide to Rollups" that optimistic rollups are suitable for the medium term but anticipates Zk-rollups gaining strength as zkSNARK technology advances. Furthermore, Buterin's recent research has predominantly focused on zk solutions.
It is plausible that the upcoming crypto trending will heavily emphasize zk-rollups, as opposed to the previous cycle's focus on Layer 1 solutions. The primary competition now lies between Zk-rollups, which offer a vast field for experimentation and innovation.