The best Ethereum Dapps are increasingly turning to “rollups”

Ethereum’s scaling solutions are heterogeneous, which, as a result, makes them difficult to track.

For those familiar with everything Ethereum related, rollups are the newest technology to know that made its largely debut a calendar year ago at Devcon V in Osaka, Japan. In fact, according to the teams interviewed by CoinDesk, most of the top 20 decentralized applications based on Ethereum (dapps) have changed or plan to move to a cumulative solution in the coming months.

For example, Coinbase Wallet now has native support for Optimism’s OVM testnet, according to a blog on Tuesday.

Entirely different from the fruit variety, a rollup is an off-chain aggregation of transactions within an Ethereum smart contract. Ethereum users can transact within the contract with security guarantees that their transactions will not be misused and will settle for the main chain at some future time.

The main benefits of transaction aggregation for dapps have been witnessed over and over again this summer, as Ethereum’s average transaction fee has broken historical records numerous times.

Read more: The frenzy of decentralized finance drives Ethereum’s transaction fees to an all-time high

The method of securing transactions is where rollup constructions diverge: one apart are zero-knowledge-proof (ZKR) rollups, which rely on mathematics; on the other hand, there are optimistic rollups (ORs), which are based on financial incentives.

The rollups have been around since 2014, described as “shadow chains” by Ethereum co-founder Vitalik Buterin.

Ethereum developers, like all blockchain developers, have been looking for viable scaling options since the project’s launch in 2015. Most of the solutions have failed or only partially worked, including Plasma and status channels. These failures have led many developers to revisit Buterin’s shadow chains, which we now call rollups.

In fact, in a blog this month Buterin called the rollups the “downsizing strategy for the short- and medium-term future,” due to the strong demand for a scalable blockchain today. Ethereum 2.0 – a new fragmented Proof-of-Stake (PoS) blockchain – is intended as a long-term solution, but it won’t be ready for production for years.

Read more: Everything you need to know about Ethereum 2.0

The two best-known rollup companies are Paradigm-supported Optimism, formally known as Plasma Group, for its operating room and Matter Labs for its zk-Rollup, ZK-Sync. Teams like Fuel Labs and Starkware are also working on highly publicized implementations.

However, a point of clarification is needed. Rollups are not a scale solution for Ethereum or any blockchain, but a “throughput solution”.

Scalability, as Summa co-founder James Prestwich said in July tweet, the number of transactions a network can process increases without changing hardware requirements.

Throughput, on the other hand, also increases the number of transactions, but it requires more hardware to do so.

As Prestwich notes, the hardware problem really boils down to what is needed to validate each transaction. Layer 2 (L2) solutions such as ZKR and OVR require additional hardware configurations because testing to adjust on-chain rollup transactions often requires additional hardware support to get the job done.

The nexus of ZKR and OR is the mechanism that proves the validity of transactions. Put simply, this means that the transaction package included in a rollup must be verified in some way.

Taking a step back, rollups can be thought of as a kind of mining block. Transactions are moved off-chain, grouped, sequenced, and then sent back to the main chain.

ZKRs bundle a group of transactions, pack them, and give a zero-knowledge proof to certify the validity of state transitions, as Buterin describes in a 2019 blog post. When the transaction is sent to the main chain, the lock is verified from the attached zero knowledge test.

Read more: EY reveals a zero-knowledge privacy solution for Ethereum

ORs, on the other hand, use game theory. Instead of attaching proof, a sequencer leaves up for grabs a constraint called proof of fraud which is seizable if a sequencer commits a malicious act such as sequencing transactions against previous rules.

This is what makes Optimistic rollups optimistic: they operate on the assumption that everyone is acting ethically, but they include a fallback in case an attacker arrives.

At first glance, ZKRs may seem more favorable than ORs: there is no bond and trust is ensured by the zero knowledge test.

But the ZKRs have some drawbacks, at least for now. For one, the ZKRs require specialized hardware to create the computationally expensive proof.

For example, privacy coin zcash relies on zero-knowledge evidence and has not been able to initiate screened transactions on its mobile wallet until this year due to the difficulty of creating that evidence without a lot of computing power.

Read more: Zcash’s latest hard fork “Heartwood” makes mining private

Furthermore, ZKRs cannot interact with the Ethereum virtual machine (EVM) in the same way that ORs can. This limits the application of ZKRs to a few blockchain actions as a basic transaction.

“The advantage of anti-fraud tests is their simplicity: Zk-rollups require contract writing as a complex zero-knowledge circuit and a lot of fancy math. This means you can’t use EVM, so you lose half a decade of tools for developers and mind sharing, ”Optimism co-founder Ben Jones said in an email to CoinDesk.

Matter Labs founder Alex Gluchowski told CoinDesk in a Telegram message that even optimistic rollups have their own particular problems.

For example, there’s a tension between how large an OR can be versus how much of a resource it’s processing, Gluchowski said.

In other words, it is theoretical that an operating room-based sequencer processes enough transactions to make it profitable to abuse its sequencer position, even if it could be cut fraud-proof. This way, there is likely to be an upper limit on the number of transactions that can be trusted for processing compared to ZKRs, he said.

“The more resources a single operating room has, the more vulnerable it becomes to various attacks. And the more transactions in a single OR, the harder it becomes to run a full node, further reducing security, ”Gluchowski said.

CoinDesk invest: ethereum economy is a completely virtual event on October 14 that explores the ramifications for investors of the radical changes taking place within the Ethereum ecosystem. to know more.