As the number of projects “built on Ethereum” continues to rise, so do the network’s issues around scaling.

Proposed by Barry Whitehat in late 2018 and developed with the support of Matter Labs and Iden3, ZK Rollup is a Layer-2 scaling solution that enables a single on-chain transaction to validate multiple transactions stored using side-chains.

ZK Rollup has received a lot of attention due to its support from Vitalik Buterin and the Ethereum Foundation.

This article explains why Ethereum needs multiple layers, describes the difference between Layer 2 scaling solutions, and highlights what makes ZK Rollups an effective solution.

Why does Ethereum need layers?

In the context of distributed ledger technologies, layers refer to frameworks built on top of existing ledgers to increase their throughput and address

Integrating a second layer provides a place where transactions can be recorded and added to the ledger in batches that prevent the network from getting clogged.

Layer 2 scaling solutions are not unique to Ethereum. The Lightning Network as deployed on Bitcoin may be the most popular example of a Layer 2 scaling solution.

Layer 1

Also called the “main chain” or “mainnet,” Layer 1 refers to the blockchain or distributed ledger itself. Layer 1 scaling solutions directly change the consensus algorithm governing the network.

Layer 2

Sometimes referred to as “off-chain,” Layer 2 solutions refer to frameworks for increasing the throughput and scalability of Layer 1 built on top of the main chain.

What distinguishes Layer 2 Scaling Solutions?

The development of Layer 2 scaling solutions has led to two primary courses of development: state channels and sidechains.

State Channels provide an off-chain communications layer where peers can exchange value and let the blockchain know what they’ve done once they’re finished.

Sidechains are separate ledgers used to record multiple transactions that get packaged and referenced by a single transaction recorded on the main chain.

While state channels like the Lightning Network have become popular on Bitcoin, sidechain-based solutions like Loom, Plasma, and ZK Rollup have come to dominate when it comes to scaling Ethereum.

State channels are fast and private but require participants to remain online, which creates a lot of risk and problems around user experience. Sidechains may be more difficult to set up, being blockchains that need miners for security, but they remain readily available for use.

What makes ZK Rollup unique?

Instead of every token transfer counting as a transaction, as things currently stand, ZK Rollup will allow hundreds of transfers to be combined into a single transaction.

It appears likely that ZK Rollup won’t be the only sidechain-based scaling solution deployed to help Ethereum scale.

As Alex Gluchowski of Matter Labs explains,

“Optimistic Rollup is a promising technology for scaling general-purpose smart contracts on Ethereum in the near term. …ZK Rollup is a more sophisticated technology…it will take a little longer to implement general-purpose smart contracts, and even more research work is required to efficiently wrap EVM in zero-knowledge proofs.”

ZK Rollup uses relayers to send funds deposited by a user to a smart contract while generating a SNARK proof that can be used to refer to the transaction from the main chain.

Optimistic Rollup provides a similar protocol that doesn’t rely on SNARK, compromising speed and privacy in favor of a solution without the added complexity involved with using zk-SNARK, a relatively new technology for creating zero-knowledge proofs.

Conclusion

Frustrating as it may be, difficulty in scaling can also be viewed as a sign of success.

Without adoption, scaling an empty blockchain wouldn’t be a problem!

It will take time to develop and implement robust scaling solutions to enable Ethereum to continue serving as a backbone for decentralized infrastructure but the work being done on ZK Rollups promises to help pave a path to success.