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Blockchains offer full transparency on the transactions that go through the system. Anybody worldwide can access this immutable ledger and see the whole transaction history.
Blockchains offer full transparency on the transactions that go through the system. Anybody worldwide can access this immutable ledger and see the whole transaction history.
It is similar to the situation where a bank exposes all the transactions that go through it. This is where ZK technology comes in handy. Zk Proofs are cryptographic proofs that allow us to confirm the validity of a transaction without knowing any details. Proof is created and can be used to validate the transaction without disclosing the actual data. Zero-knowledge proofs are here to make blockchain networks more scalable and secure.
With this basic understanding of zk technology, let’s learn about zk Sync.
What is ZK Sync?
Zk Sync is an innovative solution that brings scalability and efficiency to blockchain transactions. Built on the principles of Zero-Knowledge Proofs, Zk Sync is a layer-two scaling solution built on Ethereum to overcome the limitations of the Ethereum network.
At its core, Zk Sync leverages Zero-Knowledge Proofs to allow users to perform transactions off-chain while maintaining the security and sanctity of the underlying blockchain. By moving transactions off the main Ethereum chain, Zk Sync significantly improves scalability, reduces fees, and enhances transaction speeds.
It bundles multiple transactions using roll-up technology and submits the proof on the Ethereum blockchain. The transaction validation process occurs off-chain, allowing for secure, trustless, and low-cost transactions.
Matter Labs are building Zk Sync. They raised a whopping $200 million Series C funding round co-led by Blockchain Capital and Dragonfly Capital. Cumulatively, they have raised $458 million, which includes a $200 million dedicated ecosystem fund, $50 million Series B led by a16z, and $8 million in Series A and Seed Round.
They have got the affirmation from 150+ ecosystem projects, including Uniswap, SushiSwap, Aave, Argent, 1inch, Gnosis, and Curve- to name a few, that would deploy on it as it goes live. It has a TVL of $193.16 million on its chain at the time of writing.
How Does zk Sync work?
Zk Sync operates as a layer-two scaling solution for the Ethereum network, revolutionizing how transactions are processed and improving overall efficiency.
At its core, zk Sync uses Rollup to combine multiple transactions into a single bundle. These bundled transactions are processed off-chain while the proof is submitted on-chain. This reduces the burden on the Ethereum network. The essential advantage of this approach is that it significantly improves scalability while maintaining the security and sanctity of the blockchain.
It utilizes zk- SNARK (Succinct Non-Interactive Argument of Knowledge) technology. SNARKs are a type of zero-knowledge proof that enables Zk Sync to provide privacy, scalability, and security.
Zk Sync generates non-transparent proofs, meaning it can verify the correctness of transactions without revealing sensitive information. These proofs are then stored on the Ethereum blockchain, ensuring transparency and immutability.
When a user initiates a transaction on Zk Sync, the transaction is first verified by the sender’s wallet. Once verified, the transaction details and a Zero-Knowledge Proof are bundled together and sent to a Zk Sync operator, which acts as a trusted intermediary. The Zk Sync operator aggregates multiple transactions into a single batch and generates a new Zero-Knowledge Proof (zk Proof) encompassing the entire batch.
This new zk Proof is then submitted to the Ethereum main chain, where it is recorded and stored. The main chain ensures the integrity of the batch. However, the actual transaction details and computations remain off-chain, resulting in significant improvements in speed and efficiency.
By leveraging rollup technology with SNARK proofs, Zk Sync achieves remarkable efficiency in terms of transaction processing. Zk Sync can aggregate multiple transactions into a single proof, reducing the computational and storage requirements on the Ethereum network. This approach significantly improves scalability and reduces transaction fees.
Benefits of zk Sync
Scalability
Zk Sync significantly improves the scalability of the Ethereum network. It achieves up to 2,000 transactions per second (TPS) on its layer 2 solutions.
Lower Transaction Fees
Zk Sync dramatically reduces transaction fees on the Ethereum network. Users can enjoy transaction costs that are up to 100 times lower compared to traditional on-chain transactions.
- Source: l2fees.info
Faster Transaction Speeds
Zk Sync enables near-instant transaction confirmations, ensuring a seamless user experience. Transactions on Zk Syncare are processed within seconds.
Enhanced Privacy
Zk Sync prioritizes user privacy, and zk SNARK proofs to maintain confidentiality. With Zk Sync, transaction details remain private, protecting sensitive information from public exposure.
Smart Contract Composability
Zk Sync promotes interoperability within the Ethereum ecosystem. Developers can seamlessly integrate existing smart contracts from different projects and protocols into their zk Sync-powered dApps. Developers can also utilize the scalability of zk Sync to incorporate multiple smart contracts, each serving a specific purpose, into a single dApp.
Challenges and Limitations
Smart Contract Limitations
It currently has limited support for smart contracts. While it supports some basic smart contract functionality, it is less robust than the main Ethereum chain. Complex smart contracts, especially those with intricate logic or requiring extensive data processing, may not be fully supported in zk Sync.
Exit Period and Finality
Zk Sync employs an exit period during which users must wait to withdraw their funds from the layer two solutions to the Ethereum main chain. This exit period is required to ensure the funds’ security and resolve potential disputes. It causes a delay in accessing funds, which may be inconvenient for users requiring immediate liquidity.
Initial Setup and Trust Assumptions
Zk Sync requires an initial trusted setup phase. During this phase, a trusted party generates the initial parameters in the proof system. Zk Sync’s security depends on this trusted party’s integrity and honesty. Any compromise or weakness in the trusted setup process could undermine the system’s security. This brings in a centralized tendency in the system.
Conclusion
Using Zero-Knowledge Proofs and roll-up technology, Zk Sync brings significant advancements to the Ethereum network. It offers scalability, lower transaction fees, faster speeds, enhanced privacy, and smart contract composability. These benefits are crucial for the growth and adoption of blockchain technology.
However, limited smart contract support, exit periods, and reliance on trusted setup pose potential obstacles. Addressing these challenges will be crucial for further development and widespread adoption of zk Sync. Despite its limitations, zk Sync represents an essential step towards a more scalable, efficient, and secure blockchain ecosystem.
