As the Ethereum network grows and the demand for faster and cheaper transactions increases, Layer 2 scaling solutions, such as sharding, sidechains, and rollups have become a hot topic of discussion in the blockchain community. In this article, we will go through two of the most promising solutions - Zk Rollups vs Optimistic Rollups - which aim to improve scalability by processing transactions off-chain and then "batching" them together for inclusion on the main blockchain.

So, what are their differences? Are there any advantages and disadvantages of Zk Rollups and Optimistic Rollups? Everything will be discussed in the article below to help you better understand which Layer 2 solution may be the best fit for your use case.

1. What is Zk Rollup? How do Zk Rollups work?

Zk Rollups are protocols that combine several transactions into batches to execute off the main chain. Once the transactions in the batch have been executed, a Zk rollup operator submits a summary of the required changes for every batch. In addition to this, the operator is responsible for producing validity proofs to ensure the accuracy of the changes made. These proofs are significantly smaller than the actual transaction data, making it faster and cheaper to verify them.

The "ZK" in ZK Rollup stands for "Zero-Knowledge," which refers to the use of zero-knowledge proofs (ZKPs) in the transaction aggregation process. ZKPs are cryptographic protocols that allow for the verification of the correctness of a computation without revealing any of the computation's inputs or outputs. This means that ZK Rollup can process transactions off-chain while ensuring their validity without compromising the security and privacy of the network.

Structure of Zk Rollups

Structure of Zk Rollups

So, how do Zk Rollups work?

  • The prover provides mathematical proof that only they can generate.
  • The verifier uses this mathematical proof to verify the validity of the transaction.
  • The contents of the transaction can be established as valid without being disclosed to the verifier.

2. What are Optimistic Rollups? How do Optimistic Rollups work?

Optimistic Rollup is a Layer 2 solution that aims to increase transaction throughput capacity while reducing costs and latency. According to Ethereum, optimistic rollups can improve scalability by 10 to 100 times.

It works by processing transactions off-chain, using a sidechain that is connected to the main blockchain. The sidechain is responsible for handling the computation and verification of transactions and periodically sends a summary of its state to the main blockchain.

In an optimistic rollup, the sidechain assumes that all transactions are valid and only submits cryptographic proof of invalidity if a fraudulent transaction is detected. This approach is called "optimistic" because it assumes that the vast majority of transactions are honest and will not result in disputes.

By assuming honesty and only submitting proofs of fraud, an optimistic rollup can achieve much higher throughput and lower fees than a traditional on-chain approach. 

3. Comparison between two Layer 2 Solutions

Top Optimistic vs Zk Rollup Blockchains

Top Optimistic vs Zk Rollup Blockchains

a. Zk Rollups vs Optimistic Rollups: Validity Proof

In a Zk Rollup, transactions are validated through zero-knowledge proofs, providing mathematical certainty that the transactions are valid without revealing sensitive information. 

On the other hand, in an Optimistic Rollup, transactions are initially assumed to be valid and then later challenged if found to be invalid. To establish whether transactions were valid, users would have to challenge a bundle of transactions in optimistic rollups. In optimistic rollups, using fraud proofs to demonstrate transaction validity is useful. The accuracy of transactions in the situation of optimistic rollups depends on game-theoretical incentives. Yet, mathematical proof can ensure the accuracy of validity proofs in zk-rollups.

b. Zk Rollups vs Optimistic Rollups: Transaction Finality

Optimistic Rollups will force users to wait through the challenge period before withdrawing the funds, thereby causing a delay in transaction finality. By contrast, Zk Rollups enable the withdrawal of funds due to the validity proofs.

c. Zk Rollups vs Optimistic Rollups: Transaction Cost

One of the differences between Optimistic Rollups vs Zero Knowledge Rollups lies in the cost of the transaction. Optimistic Rollups require lower costs because of the minimal data published. Without the need to provide proof for transactions, unless challenged in special cases, you are likely to have better cost efficiency in optimistic rollups.

By contrast, the need for computational proof leads to a higher transaction cost when it comes to Zk Rollups. Creating and verifying proof for different transaction blocks adds excessive overhead, resulting in higher costs. In addition, it is also important to note the necessity of high-end hardware for creating zero-knowledge proofs. The on-chain verification costs associated with Zero Knowledge Rollups make them a costlier alternative to Optimistic Rollups.

d. Zk Rollups vs Optimistic Rollups: Mechanism

A Step-by-step mechanism in Optimistic Rollups:

  • Optimistic Rollups bundle multiple transactions into batches and submit compressed data to the Blockchain.
  • Transactions are executed off-chain, and transaction data is posted to the main chain. 
  • A challenge period commences. Unchallenged batches are accepted by the blockchain. Challenged batches will be updated.

A Step-by-step mechanism in Zero Knowledge Rollups:

  • Zk Rollups bundle transactions into batches.
  • Zk Rollup operators submit a summary of changes post-execution and zero-knowledge proof.
  • Once the validity proof is verified, transactions are finalized.

4. Final Thoughts

To conclude, Zk-rollups and optimistic rollups are two promising scaling solutions that can help improve the scalability, performance, and security of blockchain networks. While ZK Rollups offer better privacy and security features, they may take time to be widely adopted in DeFi. Meanwhile, Optimistic Rollups could be a viable alternative. Both solutions are expected to contribute significantly to the growth and development of blockchain networks.

If you're seeking expert guidance for your Blockchain project, feel free to drop us a message. SotaTek, a leading Blockchain Development Company in APAC, boasts a team of highly skilled Blockchain professionals. Our proficiency extends beyond Blockchain consulting and also encompasses Blockchain development.

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