The future of scalable blockchain transactions is now

Cryptocurrency Ethereum processed over one million transactions a day in early 2021, a figure that remained relatively stable in recent years. It’s meteoric growth, given its humble beginnings in August 2015. The use of digital tokens and decentralized systems powered by blockchain technology has exploded over the years, giving rise to problems such as congested networks, increased gas fees, slower confirmations and poor user experience. Scaling operations efficiently while increasing costs is the only choice for Ethereum. Starknet, a permissionless decentralized Zero Knowledge Rollup (ZK Rollup) operating as a layer-two (L2) network on top of Ethereum, was founded in 2017 and launched in November 2021. It was the first system to take steps in this direction to mitigate these challenges.

By definition, ZK Rollup is a layer-2 scaling solution for the Ethereum blockchain network that combines the concept of Rollups with Zero-Knowledge Proofs (ZKPs). It enables the aggregation of multiple transactions into a single proof, which is then sent to the main chain, reducing congestion and increasing scalability. It reduces the main chain’s computational load and storage requirements, and significantly increases transaction throughput. By using Zero-Knowledge Proofs, ZK Rollup achieves transaction privacy and maintains the security guarantees of the underlying blockchain.

Secure, scalable systems remain challenging for industries such as finance, supply chain and decentralized applications (dApps) that have already adopted blockchain. They leverage ZK Rollup’s off-chain computation and transaction verification while guaranteeing the security of the underlying blockchain. This makes it easier to scale while simultaneously handling large transactions quickly and efficiently.

As we progress in the blog, we will explore ZK Rollup in depth and uncover how it works and its benefits.

How ZK Rollup works

To understand how ZK Rollup works, one must understand two primary concepts: Rollups and Zero-Knowledge Proofs (ZKPs), which work together to give ZK Rollup its capabilities. The former helps the blockchain network scale and remain cost-effective, and the ZKPs ensure transaction privacy and security. To understand it better, let’s dive into more details.

Rollups are layer-2 scaling solutions for blockchain networks that improve scalability and reduce transaction costs. Digests do so by aggregating multiple transactions into a single transaction or a compressed representation, often called a “Rollup Block”.

ZKPs are cryptographic protocols that allow one party (the provider) to validate the user transactions of another party (the verifier) ​​without revealing additional information. They are cryptographic proof of the Rollup block, which is shared with the main chain along with state and transaction roots through smart contracts as a single transaction. The smart contract helps verify and update the state accordingly in the mainnet.

ZK Rollup combines the concept of Rollups with Zero-Knowledge Proofs. In ZK Rollup, the cryptographic proofs validate the Rollup block sent to the main chain instead of individual transactions, which significantly reduces the size and cost and ensures the integrity. It enables high scalability, low latency and privacy features.

Now that we have some knowledge of how ZK Rollup works, we can dive deep into its benefits and how businesses are leveraging them.

Advantages of ZK Rollup

In the blog we have already talked about the various advantages of ZK Rollup. Here they are in more detail:

1. Scalability: ZK Rollup brings significant scalability benefits to blockchain networks. ZK Rollup reduces the main chain’s computational load and transaction processing requirements by aggregating multiple transactions into a single aggregation block. It increases the transaction throughput significantly, so that the network can handle an increased volume of transactions. Scalability improvements result in faster confirmation times, reduced congestion and improved user experience.
2. Cost-saving: ZK Rollup offers cost-saving benefits by reducing gas charges. With the ability to process multiple transactions within a single aggregation block, users can avoid paying gas fees for each transaction. The transaction cost is significantly lower than direct execution of transactions on the main chain. This cost-effectiveness makes blockchain technology more accessible and viable for a wider range of use cases, including microtransactions and high transaction volume applications.
3. Safety: ZK Rollup maintains the security guarantees of the underlying blockchain while achieving scalability. By leveraging Zero-Knowledge Proofs, ZK Rollup ensures that the Rollup block only sends valid transactions to the main chain. The main chain receives the cryptographic proofs and through smart contracts it validates the correctness of the transactions. It ensures robust security, as the main chain remains the ultimate authority on the integrity of the Rollup blocks. In addition, ZK Rollup takes advantage of the security features of the underlying blockchain, such as decentralization and immutability, which ensure the overall security of the system.
4. Speed ​​and stability: ZK rollup is a multi-level system designed to reduce the error in the Ethereum network, which is slow network operation due to reduced availability during periods of high demand. As verification of the transactions, bundling takes place in a different layer than the main network. It frees up all the space on the main grid that these processes originally used to occupy. With better management of resources and streamlined processes, networks work faster and much more stably.

Overall, ZK Rollup offers a powerful combination of scalability, cost savings and security benefits. It enables blockchain networks to handle a higher transaction volume, reduces user costs, and maintains the integrity and security guarantees of the underlying blockchain. These advantages make ZK Rollup a compelling solution to address the scalability challenges faced by blockchain platforms and expand their practical applications in various industries.

How do companies utilize ZK Rollup?

With its scalability and security features, ZK Rollup has the potential to revolutionize various sectors and applications. Here are some prominent use cases of ZK Rollup:

ZK Rollup is a technology that can significantly improve the scalability of Ethereum-based cryptocurrency network. This means that transactions can be processed faster and at lower costs, making it more convenient for everyday use. Users can enjoy the benefits of decentralized financial applications with reduced fees and an improved user experience.

Decentralized exchanges can also benefit from ZK Rollup. Aggregating multiple trades into a single summary block can increase transaction throughput, reduce fees, and reduce wait times. It can increase efficiency and liquidity, making them more competitive with centralized exchanges, while maintaining the security and privacy of on-chain transactions.

Gaming platforms and NFT marketplaces can leverage ZK Rollups, where transaction scalability is critical. It can enable seamless and cost-effective transfers of in-game transactions and NFT trading. This technology can improve the gaming experience by reducing transaction costs and ensuring secure ownership of assets.

IN supply chain management systems, ZK Rollup can improve efficiency and transparency. It facilitates fast and secure item tracking, verification of product authenticity and seamless transfer of ownership. With ZK Rollup, the supply chain can revolutionize processes, reduce fraud and counterfeiting and improve overall visibility.

Voting systems and management protocols can use ZK Rollup to ensure the integrity of votes, prevent double consumption and maintain privacy by leveraging zero-knowledge proofs. This technology can use decentralized decision-making processes to improve efficiency and inclusion in various governance frameworks.

Finally, ZK Rollup can enable efficient and secure micropayments and transactions in IoT network. With seamless and secure machine-to-machine transactions, IoT devices can autonomously and efficiently exchange value. It is scalable and cost-effective, making it an ideal solution for handling large, low-value data exchanges in IoT ecosystems.

These use cases demonstrate the extensive potential of ZK Rollup in various industries and applications. By addressing the scalability challenges of blockchain networks while maintaining security and privacy, ZK Rollup opens up new opportunities to adopt and practically implement blockchain technology in real-world scenarios.

What does the future hold for ZK Rollups

Many industries have already started using decentralized systems and many will soon follow to start using ZK rollups more often. These rollups are a superior layer-2 solution since they do not need conflict resolution mechanisms. ZK rollups provide better security by leveraging Ethereum’s security. As Ethereum’s prominence increases, the reliance on rollups may also increase. These digests can be integrated with future upgrades of the Ethereum blockchain, making it more affordable and user-friendly for regular users.