zkRollup and zkEVM – the Path to Ethereum’s Scalable Future

Despite the many FUD moments we experienced in the first 90 days of the year 2023, we saw a wave of zero-knowledge (zk) scaling solutions reaching mainnet stage. The latest development further strengthens Ethereum’s position as the go-to-chain for developers and make it increasingly difficult for the alternative chains to compete.

Two type of Layer 2: Side chain vs. Rollup

Layer 2 is a popular scaling solution that has been widely implemented. Out of which, side chain and rollup are two main types. Take Polygon and Arbitrum for example, while both Polygon and Arbitrum aim to improve the scalability of Ethereum, Polygon operates as a separate network, while Arbitrum operates as an extension of Ethereum. What does it mean for users? A side chain has its own utility token (in Polygon’s case, MATIC) for transaction fee purpose while a rollup uses ETH for gas, same as main chain. So ETH is still ETH on Arbitrum but it is WETH on Polygon. Furthermore, a rollup stores the data on Layer 1 unlike the side chain and hence derives the security of the Layer 1. A side chain is a separate blockchain that doesn’t benefit from the Layer 1’s security guarantees.

Two types of Rollup: optimistic vs. zero-knowledge (zk)

There are mainly two types of Rollup. While Optimisitc Rollup took all the spotlights last year, zkRollup took the centre stage this year so far. Optimistic Rollup relies on a challenge mechanism to ensure the accuracy of transaction execution. In Optimistic Rollup, transactions are processed off-chain and then submitted to the mainnet in batches. zkRollup, on the other hand, uses Zero-Knowledge Proofs (ZKPs) to ensure the accuracy of transaction execution. In zkRollup, transactions are processed off-chain and then a single ZKP is submitted to the mainnet, which proves that the transactions are valid without revealing any information about them. The mainnet verifies the ZKP and then settles the transactions. In short, Optimistic rollup is easier to implement but less efficient compared to zkRollup. Binance Academy has a very helpful table on this.

The top three Optimistic Rollup projects are Optimism, Arbitrum and Coinbase Base. The leading zkRollup projects are zkSync and Starknet.

zkRollup vs. zkEVM

And we don’t just stop at layer 2 scaling solutions. The Ethereum community is pushing for layer 1 scaling solutions as well, entering zkEVM.

zkRollup is a layer 2 scaling solution that relies on off-chain computation and on-chain verification using zero-knowledge proofs. In a zkRollup system, transactions are bundled together into a single batch and verified off-chain, with only the proof of the validity of the batch being submitted to the Ethereum mainnet.

On the other hand, zkEVM is a layer 1 scaling solution that allows for full compatibility with the existing Ethereum ecosystem, including support for smart contracts. zkEVM uses zero-knowledge proofs to enable off-chain execution and verification of smart contracts, while still maintaining the same security guarantees as the main Ethereum network. This allows for significantly higher transaction throughput and lower gas fees while still supporting the full range of Ethereum functionality.

In summary, zkRollup is a more limited scaling solution that sacrifices smart contract support for higher throughput and lower fees, while zkEVM is a more comprehensive scaling solution that maintains compatibility with the existing Ethereum ecosystem while achieving higher scalability and lower fees.

Vitalik has a detailed writeup on different types of zkEVM and their pros & cons. Projects working towards zk-based EVM compatible solutions include Scroll, Taiko, zkSync Era, ConsenSys Linea. We are still early!