The Evolution of Ethereum: Navigating Congestion, Rollups, and Zero-Knowledge Proofs
Layer 2 Solutions: A Beacon of Hope Amidst Rising Gas Fees
Despite these advancements, Ethereum’s network still grapples with high congestion levels. During peak times, this congestion has led to exorbitant gas fees, sometimes costing users upwards of 2 ETH per transaction—a situation that underscores the urgent need for scalable solutions. The integration and increasing adoption of Layer 2 rollups, particularly optimistic rollups, offer a glimmer of hope, facilitating transactions at costs less than a penny.
However, the real challenge lies in managing the computational load off-chain while ensuring data integrity through succinct, verifiable proofs. Zero-knowledge proofs (ZKPs) emerge as a viable solution, yet they present their own set of complexities and costs, especially when it comes to transaction verification within the Ethereum Virtual Machine (EVM).
Optimistic vs. ZK-Rollups: Balancing Cost and Security
While optimistic rollups are relatively simpler and cheaper to verify, zk-rollups, although providing enhanced privacy and efficiency, require specialized hardware and are costly to verify. This poses a significant barrier for small to medium-sized enterprises wishing to leverage blockchain for confidential transactions on-chain.
Interestingly, the concept of modular proof verification, such as zkVerify, which can reduce these costs by over 90%, has not been a priority for major Layer 2 ecosystems. These ecosystems often prefer to verify all ZK proofs on the same chain, spreading the costs across a broader user base. However, rollup-as-a-service (RaaS) providers, who cater to smaller projects, are more receptive to modular approaches, seeing the value in off-chain proof verification to cut costs.
Despite the potential benefits, some large Layer 2 providers argue that moving proof verification off-chain could compromise security. Yet, it’s an open secret that some already verify their proofs off-chain without public acknowledgment. They also prefer to aggregate proofs to distribute costs more effectively, even though this can delay the verification process.
The EVM’s Compatibility Challenges with Advanced Cryptography
This limitation necessitates wrapping proofs into a more compatible format, which not only reduces efficiency but also increases the potential for errors and costs. Ideally, developers should have the freedom to select the most suitable zk-SNARK for their applications without compromising on performance.
While Ethereum has the potential to incorporate more advanced precompiles, the pace of such developments has been slow, with the last precompile update occurring in 2017. This slow adaptation cycle raises questions about demand, feasibility, and whether even with new precompiles, the computation on the EVM would remain inefficient.
Horizen Labs’ Innovative Approach to Scalability and Efficiency
At Horizen Labs, we are addressing these challenges head-on by offering modular proof verification through zkVerify and developing a fully EVM-compatible chain that supports the latest zero-knowledge precompiles. Horizen 2.0, built on Substrate, enables forkless upgrades that the community can implement swiftly without the need for hard forks or manual node updates.
This dual approach not only caters to those who prefer a dedicated ecosystem like Horizen 2.0 but also supports those opting for RaaS to build custom rollups, benefiting from cost-effective off-chain proof verification.
For further insights into blockchain scalability and Ethereum’s evolution, explore our detailed analysis on blockchain’s role in the supply chain and embracing adaptability in blockchain technology.
