Ethereum scaling solutions are heterogeneous, which makes them difficult to monitor.
For anyone familiar with Ethereum, rollups are the latest technology that was first introduced a calendar year ago at Devcon V in Osaka, Japan. According to the teams surveyed by CoinDesk, the majority of the top 20 Ethereum-based decentralized applications (dapps) have switched to a roll-up solution or are planning to switch to one in the coming months.
Coinbase Wallet now offers native support for Optimism’s OVM test network, according to a blog on Tuesday.
A rollup is fundamentally different from the fruit variety and is an off-chain aggregation of transactions within an Ethereum smart contract. Ethereum users can conduct transactions within the contract with security guarantees so that their transactions are not abused and they settle in the main chain at a later point in time.
The main benefits of transaction aggregation for Dapps have been observed over and over again this summer as Ethereum’s average transaction fee broke historic records multiple times.
Continue reading: Decentralized financial frenzy is driving transaction fees for Ethereum to an all-time high
The method of guaranteeing transactions is that rollup constructions differ from one another: on one side there are Zero Knowledge Proof Rollups (ZKR) that rely on math. On the other hand, there are optimistic rollups (OR) based on financial incentives.
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Rollups have existed since 2014 in the concept that Ethereum co-founder Vitalik Buterin calls “shadow chains”.
Ethereum developers – like all blockchain developers – have been looking for workable scaling options since the project started in 2015. Most solutions, including plasma and status channels, have failed or only partially worked. These bugs caused many developers to revisit Buterin’s shadow chains, which we now call rollups.
In a blog earlier this month, Buterin called Rollups the “scaling strategy for the short and medium term future” as there is a high demand for a scalable blockchain today. Ethereum 2.0 – a new, split proof-of-stake blockchain (PoS) – is intended as a long-term solution, but will not be ready for production for years.
Continue reading: Everything you need to know about Ethereum 2.0
The two best-known rollup companies are Paradigm-Backed Optimism, formerly known as Plasma Group, for the OR and Matter Labs for the zk rollup, ZK-Sync. Teams like Fuel Labs and Starkware are also working on much-touted implementations.
Rollups as throughput solutions
However, a point of clarification is needed. Rollups are not a scaling solution for Ethereum or a blockchain, but a “throughput solution”.
Scalability, as Summa co-founder James Prestwich said in a July tweet, increases the number of transactions a network can process without changing hardware requirements.
Throughput, on the other hand, also increases the number of transactions, but requires more hardware to achieve this.
As Prestwich notes, the hardware problem really boils down to what it takes to validate each transaction. Layer 2 (L2) solutions like ZKR and OVR require additional hardware setups, as evidence of handling rollup transactions in the chain often requires additional hardware support to get the job done.
CCNR vs. OR
The connection between CCNR and OR is the mechanism that proves the validity of transactions. In plain English, this means that the transaction bundle contained in a rollup must be checked in some way.
Rollups can be viewed as a kind of mining block. Transactions are moved off-chain, bundled, sequenced, and then sent back to the main chain.
CCNRs bundle a group of transactions, compress them, and slam on knowledge-free evidence to confirm the validity of state transitions, as Buterin describes in a 2019 blog post. When the transaction is sent to the main chain, the block is verified by the attached zero-knowledge certificate.
Continue reading: EY unveils a knowledge-free data protection solution for Ethereum
OPs, on the other hand, use game theory. Rather than attaching evidence, a sequencer allows a bond to win, known as fraud evidence, which is seizable if a sequencer commits malicious acts such as sequencing transactions against prior rules.
That makes optimistic rollups optimistic: they assume everyone is acting ethically, but include a fallback in case a malicious party arrives.
At first glance, CCNRs seem to be cheaper than OPs: There is no bond, and trust is ensured by the zero-knowledge proof.
But CCNRs have some drawbacks, at least for now. On the one hand, CCNRs require special hardware to create the computationally intensive proof.
For example, Privacy Coin Zcash is based on knowledge-free evidence and was only able to start protected transactions on its mobile wallet this year as it is difficult to produce this evidence without a lot of computational effort.
Continue reading: Zcash’s newest hard fork ‘Heartwood’ makes mining private
Additionally, CCNRs cannot interact with the Ethereum Virtual Machine (EVM) in the same way as ORs. This limits the application of CCNRs to some blockchain actions, e.g. B. a basic transaction.
“The advantage of providing evidence of fraud is its simplicity. For Zk rollups, you have to write your contracts as a complex zero-knowledge circuit and with a lot of fancy math. This means you can’t use the EVM, so you’re losing half a decade of developer tools and mindshare, ”said Ben Jones, co-founder of Optimism, in an email to CoinDesk.
Matter Labs founder Alex Gluchowski told CoinDesk in a Telegram message that optimistic rollups also have their own problems.
For example, there is a tension between the size of an OP and the amount of an asset to be processed, Gluchowski said.
In other words, it is theoretical that an OR-based sequencer will process enough transactions that it will be profitable to abuse its position as a sequencer – even if the evidence of fraud could be trimmed. That way, there is likely a cap on the number of transactions an OP can trust in processing versus CCNRs, he said.
“The more resources an individual OR has, the more vulnerable it becomes to various attacks. And the more transactions that are done in a single OR, the more difficult it becomes to run a full node, which further reduces security, ”said Gluchowski.
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