Original title: "Ethereum's Rollup-Centric Future》

Original compilation: Unitimes

Original compilation: Unitimes

key points

• key points

• To alleviate current scalability issues, Ethereum is moving to a "Rollup-centric roadmap" that combines the best on-chain and off-chain scaling solutions.

• Ethereum’s on-chain expansion scheme, darksharding, provides sufficient data space for the vigorous development of L2 (second layer) expansion schemes such as Optimistic Rollups and ZK-Rollups.

• Both Optimistic Rollups and ZK-Rollups have their disadvantages: Most Optimistic Rollups have a long withdrawal waiting period between layers; while ZK-Rollups often require a lot of calculations and cannot provide seamless composability.

In order for a Rollup-centric future to remain viable, Rollups solutions must prioritize lower execution costs, cross-layer interoperability, and user privacy.

Scalability is the method of increasing the speed and throughput of a blockchain network while minimizing (transaction) costs and without sacrificing decentralization and security of the blockchain network. Ethereum currently cannot scale. Over the past two years, transaction costs on ethereum have soared as the number of users has grown, making using the network nearly unaffordable for everyday investors.

Ethereum has two core options for scaling: on-chain scaling and off-chain scaling. In conjunction with "The Merge", the Ethereum team is introducing a new sharding design called "danksharding", which introduces an on-chain scaling solution. These changes are expected to occur sometime in the coming months.

While preparing for the "merger", Ethereum is moving to a "Rollup-centric roadmap". It plans to combine the best of on-chain and off-chain scaling solutions.

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01. A Brief Guide to Rollups

1) Optimistic Rollups

Optimistic Rollups networks, such as Arbitrum or Optimism, assume that all transactions are valid from the beginning. In order to ensure the security of these transactions, the Optimistic Rollups network provides a challenge period (challenge period), network verifiers can challenge the legitimacy of a transaction through a fraud proof (fraud proof) on the parent chain (such as Ethereum). Optimistic Rollups significantly increase throughput and reduce latency (transaction confirmation time) by only performing proofs when fraud is suspected. The challenge period is usually seven days.

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Source: ethereum.org

During the challenge period, users can use their assets within the L2 ecosystem, but cannot withdraw assets back to the L1 chain. In response to the longer withdrawal waiting periods in Optimistic Rollups, some fast withdrawal schemes are emerging. For example, through a community-driven liquidity pool, Boba Network shortened the exit waiting period to a few minutes.

2) ZK-Rollups

Zero-knowledge (ZK)-Rollups networks, such as StarkNet, are similar to Optimistic Rollups, which also combine a large number of off-chain transactions and submit them back to the Ethereum mainnet in batches. However, instead of assuming that all transactions are valid until proven valid, ZK-Rollups use validity proofs (validity prroofs) to verify transactions immediately. These validity proofs and compressed data will be submitted to Ethereum L1 as a proxy for their corresponding original transaction packages for on-chain verification.

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Credit: Simon Brown

Furthermore, most ZK-Rollups are generally not EVM compatible due to their inherent complexity. Therefore, it is difficult for Ethereum developers to migrate smart contracts to ZK-Rollups schemes, which makes it more difficult to develop general applications for these ZK-Rollups schemes without completely changing the smart contract framework. ZKSync and zkEVM have recently deployed an EVM-compatible ZK-Rollup solution on the Ethereum test network, bringing light to a ZK-Rollup-centric future.

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02. Ethereum's "Rollup-centric" roadmap

Sometime this year, Ethereum will undergo a consensus mechanism shift from PoW (Proof of Work) to PoS (Proof of Stake), which is called "The Merge". This change will reduce the energy emissions of the Ethereum network, improve network security, and reduce centralization risk from miners. Ethereum's "Rollup-Centric Roadmap" will support any number of validators as long as they stake 32 ETH as an economic deposit.

Sharding is an on-chain horizontal scaling scheme that increases the amount of activity a blockchain can efficiently handle. Essentially, the Ethereum blockchain will be split into smaller chains, so-called "shards," which will run in parallel and eventually connect to each other through the Beacon Chain. Together. Each shard chain will run through a subset of nodes that will check for data availability. This system ensures that anyone can use standard consumer-grade hardware to run network nodes while increasing the scalability of the network.

Instead of providing more space for transactions like traditional sharding, the latest danksharding schemes focus on providing block space for data blobs. The Ethereum protocol does not attempt to interpret this data, but only to verify that these data blobs are fully usable. For these data blobs to be considered fully available, no data must be lost, and the Rollup state must be able to be reconstructed using that data. This data space will be used to support L2 scaling solutions with high transaction throughput.

Danksharding forms a data layer that provides massive data availability, thereby providing Rollups with a low-cost venue to publish their data. Danksharding makes Ethereum's Rollup-centric roadmap feasible. It turns Ethereum into a settlement and data availability layer, and hands scalability into the hands of L2 Rollups. Currently, by combining Rollup and the Ethereum architecture, the current Ethereum transaction throughput of only 15-45 TPS can be expanded to as high as 1000-4000 TPS. The introduction of shard chains will further expand the data storage capacity of Rollups, increasing the throughput to over 100,000 TPS.

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03. Rollup-centric future

The shining advantage of Optimistic Rollups and ZK-Rollups is that they solve Ethereum’s scalability problems without compromising security or decentralization. They allow for near-instant transactions at much lower fees while reducing network congestion on Ethereum mainnet.

However, both types of Rollups have significant disadvantages that call into question their long-term sustainability. Optimistic Rollups are subject to a week-long withdrawal wait period due to the fraud proof system. However, ZK-Rollups are too computationally intensive to be compatible with EVM at present. As mentioned earlier, the developers of both solutions are addressing these issues.

The Ethereum ecosystem provides ample room for the Rollup ecosystem to thrive. The Ethereum roadmap encourages experimentation, allowing the best L2 solutions to thrive within the mature Ethereum ecosystem. In addition to their respective shortcomings, future Rollup deployments must address differences in transaction costs, fragmentation of Ethereum's sharding ecosystem, and privacy concerns.

1) cost

A scalable blockchain needs to be able to support increasing transaction (transaction) volumes without compromising transaction costs. As mentioned earlier, Optimistic Rollups and ZK-Rollups both solve this problem, but how do they compare?

ZK-Rollups can incur significant costs when running their proof of validity. However, as the procedure improves, the number of transactions included in each transaction batch in the ZK-Rollup network will increase, which will reduce the marginal cost per transaction. In the long run, ZK-Rollup will overcome the initial fixed cost of its proof of validity.

In theory, Optimistic Rollups should have almost costless transactions. Unlike ZK-Rollups, Optimistic Rollups do not have heavy back-end computation or data compression (which would further increase transaction costs). Typically, Optimistic Rollups operators incur the cost of running fraud proofs. However, posting uncompressed data back to Ethereum increases transaction costs. Additionally, transaction costs on Optimistic Rollups are currently higher than expected as fraud proofs have not yet been fully deployed on these solutions.

On the Ethereum shard chain, the transaction cost of any Rollup scheme should be significantly lower than the current situation. In theory, if ZK-Rollups can continue to reduce the marginal cost per transaction, the cost difference between Optimistic Rollups and ZK-Rollups should be very small.

2) Fragmentation

The entire crypto ecosystem suffers from fragmentation. Most protocols operate in silos, and the industry as a whole is relatively fragmented. Moving assets between blockchains is complex and non-intuitive, especially for new users.

Many Rollups networks have thriving but isolated L2 ecosystems. Developers are rapidly building applications on Arbitrum and Optimism due to the ease with which components within the Ethereum protocol can be connected. However, once users have placed their assets into these systems, they often find it a challenge to re-transfer those funds to a different platform. "Cross-layer bridges" and "cross-chain bridges" like Hop and Connext help solve some of the interoperability issues for liquid assets. Users can seamlessly transfer assets from one platform to another relatively quickly and cost-effectively.

The cross-chain bridge will lock the asset in an L1 smart contract, and then send a certain version of the Token asset to another blockchain or Rollup, and vice versa. Without EVM compatibility, users would need to relinquish control of their crypto assets, as the security of the cross-chain bridge no longer depends on the security of the underlying blockchain. In order to transfer assets from Ethereum to Rollups that do not have EVM compatibility (such as Loopring or StarkNet), users can send Token assets to the Rollup from a centralized trading platform, or pay Gas fees to send assets to the Rollup itself . In the case of the latter, these assets will exist in that L2 Rollup.

For bridging assets across chains from Ethereum to Rollup, L2 bridges have declined in terms of total TVL (total value locked) since the market downturn earlier this year. Optimistic Rollups like Arbitrum, Optimism, and Boba are currently leading the way in terms of accumulated bridge TVL, despite long withdrawal wait periods. zkSync is a fairly new Rollup in the space, but it's one of the few ZK-Rollups with EVM compatibility.

Likewise, there are some issues around the interoperability of Rollups in the PoS-based Ethereum world. The "Interoperability Bridge" will become a vital infrastructure component in the Rollups-centric Ethereum ecosystem. They will work to prevent siled Rollup ecosystems, maintain composability, and ease fragmented liquidity. These bridges are necessary for cross-rollup communication and asset migration.

Ethereum's Rollup-centric ecosystem encourages experimentation and evolution of current blockchain architectures. Currently, EVM compatibility limits development within the Rollup framework, limiting the freedom to innovate in smart contracts. EVM compatibility may become an obsolete feature, replaced by future developments driven by composability.

In the short term, Optimistic Rollups is the leading scaling solution for the Ethereum ecosystem. They have an existing advantage in EVM compatibility, which gives their applications the composability they need. However, over time, the transition to ZK-Rollups will occur naturally due to several factors: lower, trustless withdrawal waiting period; higher throughput; superior data compression; A reduction in the marginal cost of transactions.

3) Privacy

Blockchains are public in nature, providing trust in the field through complete transparency. At any given time, anyone can go to Etherscan and see who is interacting with what contract and how much money is involved. While wallet addresses are an anonymous privacy solution, social media platforms provide an opening to link public identities to corresponding wallets.

On the other hand, the current TradFi (traditional finance) system is completely private: people cannot view each other's finances. In an era where data privacy is a mainstream issue, it's easy to understand why retail investors, especially businesses, are reluctant to share their private information and link it to their financial records. The crypto space needs to be as private as the current Web2, otherwise, frankly, there will be no potential for long-term adoption.

So how exactly can developers remove identifiable information from public transactions without compromising security?

The beauty of ZK-Rollups lies in their data compression capabilities. As mentioned earlier, ZK-Rollups verify all transaction data off-chain and publish the verified proof and compressed transaction data back to the Ethereum mainnet. Ethereum validators do not need to interpret the data in the transaction batch, but only check and ensure that the L2 scheme has verified the data.

Privacy-focused ZK-Rollups remove identifiable information from the transaction data they bundle and publish only appropriate information. For example, Aztec has created a pseudonym system in its Rollup scheme to completely separate transaction data from the related transaction parties. Users can anonymously send or receive tokens and interact with decentralized applications through their upcoming Aztec Connect bridge.

However, this increased privacy feature comes at a price. The Rollup can't handle transaction lists like before. Aztec introduced a second zero-knowledge proof (so now it's ZK-ZK-Rollup) to verify a list of ZK proofs, each proof verifying a private transaction. Polygon launched their enterprise-oriented privacy rollup, Polygon Nightfall, which runs an Optimistic Rollup on top of the ZK Privacy Rollup.

Enabling private transactions is simpler for ZK-Rollups because Optimistic Rollups publish all transaction data to their parent chain. However, there are also options to enable Optimistic Rollups for private transactions. They could follow the example of Tornado Cash by severing the on-chain link between source and destination addresses. Current Optimistic Rollups can host privacy-oriented ZK-Rollups such as Aztec as L3 (third layer). Future deployments could also mix their solutions, such as Polygon Nightfall, and implement ZK-Rollup to verify private transactions.

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04. Write at the end

The Optimistic Rollups solution is ahead of ZK-Rollups in the current market. Being generally equivalent to the EVM, Optimistic Rollups have the composability their applications require, and are simpler due to the absence of complex off-chain computations. In the long run, if the technology of ZK-Rollups continues to improve, based on better product fit, they may win the L2 Rollup competition. As more EVM-compatible solutions emerge, ZK-Rollups should become more cost-effective, leverage unprecedented transaction privacy, and result in a more harmonious cross-chain and cross-layer bridging experience.

Ethereum is not the only L1 blockchain focused on a Rollup-centric roadmap. Tezos, NEAR, and Celestia have moved to some sort of rollup-oriented blockchain. Also, the current L1 competition may not disappear in the near future. These L2 ecosystems may not only have to compete with each other, but also L1 ecosystems (such as Solana) and even L2 sidechains (such as Polygon).