What is Zero-Knowledge Rollup?

At the core is a Zero Knowledge Rollup (ZK Rollup) a scaling solution for blockchain networks, enabling transaction processing off-chain and ZK proofs verifying on-chain. While ZK-Rollups is a bunch of transactions glued together and that is proofed something which then gets published on the main blockchain, in this case, each transaction that you’re processing, one by one, would be a lot more costly and computationally expensive.

Key Concepts of Zero-Knowledge Rollup

ZK-Rollups do their transaction execution off of the main blockchain, or Layer 1, but employ zero-knowledge proofs to verify the validity of the transaction on their roll-up. A zero-knowledge proof is proving to another party that you had a transaction without revealing any information about what you transacted. This presents us with a way of batching the transactions away from the blockchain and thus along with removing this burden, we can process them more efficiently.

In the case of being off-chain, the user sends transactions to a rollup which are all combined to form a delta rollup. We then generate a proof called a succinct non-interactive argument of knowledge (SNARK), in order to verify the validity of the batch. A valid proof is connected on a chain so that the transactions never need to check out each transaction on its own. With security, ZK Rollups save on gas fees while improving throughput.

Unlike other Layer 2 solutions, ZK-Rollups provide transaction integrity off-chain without relying on the trust of third parties with cryptographic means. All transactions in that rollup, which are all ordered and completely consistent with the rules of the blockchain, are guaranteed to be valid.

Advantages of Zero-Knowledge Rollup

In 2020 two players emerged to combat increasing fees imposed by the *Bitcoin* network (mainly as a result of increased hash rates).

ZK Rollups have one of the greatest advantages in scalability. By way of one proof, ZK-Rollups bundle together transactions and then verify them in order to scale blockchain networks beyond one transaction per second. This capacity allows you to do this and reduce the congestion of the network, making decentralized application (dApp) usage more efficient.

And then there’s the gas fees, which it also has down pat. The cost of transaction validation is reduced as the proof only needs to be verified on the chain. This helps users the most times when the gas fees to interact on the blockchain are at unreasonable prices — called gas warfare — on Layer 1.

Moreover, ZK Rollups are also very secure. All of the transactions are zero-knowledge proved (guaranteed using a zero-knowledge proof), such that no sensitive information is revealed about the individual transaction. In cases where once more sensitive financial or personal data is needed, it offers high security alongside high privacy.

Disadvantages and Considerations

One challenge is to generate zero-knowledge proofs. Verifying a proof chain can be done quite quickly, but proving facts off-chain takes a lot of computing time, so the work itself is quite time and resource-consuming for developers.

The first barrier is that ZK rollups require that developer be proficient in specialized cryptographic knowledge but don’t know what ZK rollups are or where to begin their setup. This increased complexity can make this adoption a hurdle, as teams need to build or combine bespoke systems to leverage the ZK-Rollups.

But ZK-Rollups might not be the right story for every single type of decentralized app. However, they are great solutions for scaling high transaction systems such as DeFi platforms or exchanges and will do longer than classical solutions if we need a finality of this processing as fast as possible.

Common Use Cases for Zero-Knowledge Rollup

ZK-Rollup is used by DFin (Decentralized Finance) platforms since they still process a high number of transactions, and need to scale up! ZK-rollups, for instance, can make decentralized exchanges (DEXs) fast and cheap; secure trades.

ZK Rollups also benefits the NFT space. For P2P blockchain protocols such as Ethereum’s minting, transferring, and trading of NFTs, these minting, transferring and trading of tokens often come with high gas fees, and thanks to ZK Rollups, the NFT market can be much more affordable.

Another use case is in gaming. For example, the cost of gambling on the blockchain is low-value transactions. There are lots of them. For example, in the Game it's buying in-game items, it's selling game items. ZK rollups let these transactions get through quickly enough for a gaming experience.

Conclusion

The Zero-Knowledge Rollups use cryptographic proof to increase transaction throughput, reduce fees on the network, and keep the network as secure as possible. The negative side is that they are complex to implement, and prove, and also that they reduce costs and increase scalability — a boon.

As blockchain continues to grow larger, we know the future of scalable decentralized applications will continue to require ZK Rollups, especially in the high transaction layers of DeFi, NFT, and gaming. There have been some challenges, but their skill in doing security, massive scale, and efficiency off-chain with the things they can do has also put them in the ring as a contending solution in the blockchain universe.

Zero-Knowledge Rollup

Key Concepts of Zero-Knowledge Rollup

Advantages of Zero-Knowledge Rollup

Disadvantages and Considerations

Common Use Cases for Zero-Knowledge Rollup

Conclusion

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