Over the past two years, Ethereum has grown exponentially. With the rise of yield farming, the DeFi ecosystem has boomed as many developers have created numerous DeFi, DAO, and NFT applications, reflected by record-breaking Ethereum transaction volumes. However, the substantial increase in demand has also led to a sharp rise in Ethereum gas fees and heightened network congestion. Even worse, transactions cannot be completed even after paying high gas fees in some cases, resulting in poor user experiences.
Under the current circumstances, Ethereum has been unable to meet the development needs of the market, and users are increasingly calling for scaling solutions.
Blockchain scaling can be implemented on the chain (Layer 1) and off the chain (Layer 2), but we all know that scalability cannot be achieved by sacrificing cost of security and decentralization. So, how can we achieve better performance while ensuring security and decentralization?
Layer 1 scaling may be a better way to solve network congestion; this includes the shard expansion adopted by ETH 2.0, but its biggest drawback is the high consensus cost. Simply increasing the block capacity will lead to a more centralized system, bringing the risk of hard forks (such as BCH forking from BTC). And also, ETH 2.0 still has two phases to go, with the full release is estimated to happen after 2-3 years.
By contrast, Layer 2 scaling solutions are a lighter and quicker method. The main purpose of Layer 2 is to break the computing bottleneck of Ethereum while ensuring security and decentralization. With Layer 2, transactions are handled off the chain to scale up the applications, thereby increasing the throughput of Ethereum and resulting in a large DeFi market. It can accommodate the existing apps from the main chain while requiring far less resources, which is one of the reasons why Layer 2 solutions have grown in popularity over the past few years.
Short and medium term of Ethereum scaling-- Vitalik
Layer 2 solution
- ZK Rollup
- Optimistic Rollup
- State Channels
- Hybrid Solution
The nature of rollups is to put calculation and most state storage on Layer 2, and then to package layer 2 transactions and blocks in batches, which are subsequently put on Layer 1 in the form of transaction parameters for verification of the correctness of state transfer on Layer 1. In the Rollup scheme, any third party can obtain data to restore the Layer 2 state tree and verify the correctness of Layer 2 state transfers.
The Edge Labs core R&D team selected ZK-Rollup as the scaling solution for EdgeSwap, after numerous calculations and systematic research.
Zero Knowledge Rollup (ZK Rollup) bundles hundreds of transactions off the chain (Layer 2) and generates an encrypted proof called SNARK (zero-knowledge Succinct Non-interactive ARguments of Knowledge). That is the so-called validity proof, which is submitted to and published on Layer 1.
The ZK Rollup contract deployed on Layer 1 maintains the status of all transaction transfers that occur on Layer 2, and the status can only be updated through proofs of validity. This means that ZK Rollup only needs proofs of validity, not all transaction data. With ZK Rollups, validating blocks become faster and cheaper because less data is packaged.
Simply put, ZK Rollup solutions adopt zero-knowledge proofs to prove that transactions on ZK-L2 fully comply with the transaction rules on L1, which is guaranteed by mathematics.
The following are the core advantages of ZK Rollups:
- 1.No delay in withdrawals: When transferring funds to Layer 1, there will be no delay, because the validity proof has already verified the funds.
- 2.Security: The validity of transaction data is ensured through mathematical methods, which can achieve the same security as Layer 1 and will not be affected by economic attacks. Other Layer 2 solutions on the market cannot achieve this.
Security is the scarcest resource in the entire crypto field, and this direction will also be where Layer 2 solutions develop in the future.
In the long run, ZK Rollup will better reflect the future of Layer 2, thanks to advantages such as security and user experience (shorter withdrawal times).