Zero Knowledge Rollups

November 21, 2023 - Around 2 mins mins to read

With the rise in demand on the Ethereum network due to the NFT and yield farming crazes in late 2020, there was a need for faster processing speeds and cheaper transactions. To address this, Layer 2 blockchains and zero-knowledge rollups were introduced.

Understanding Zero-Knowledge Rollups

Zero-knowledge rollups, also known as zk-rollups, are a Layer 2 scalability solution that enables blockchains to validate transactions faster and keep gas fees low. Unlike traditional Layer 1 blockchains like Ethereum, zk-rollups combine on-chain and off-chain processes to achieve better performance.

While the Ethereum mainnet relies on on-chain activities for transaction processing and block validation, zk-rollup solutions introduce off-chain functionalities. One key component that enables zk-rollups to validate transactions faster than Layer 1 blockchains is the use of Merkle Trees.

Merkle Trees are a crucial mathematical structure that ensures the integrity of on-chain records in a zk-rollup. Typically, a zk-rollup consists of two Merkle Trees stored on a smart contract, or on-chain. One tree stores accounts, while the other stores balances. Any other data generated and used by the zk-rollup is stored off-chain.

The off-chain storage of data is one of the reasons why zk-rollups outperform Layer 1 solutions. Merkle Trees only contain essential data relevant to the smart contract and are accessed and requested less frequently compared to Layer 1 solutions. This saves processing power and time for the blockchain, resulting in lower gas fees. As a result, Layer 2 solutions, particularly zk-rollups, are preferred by small-time traders.

Zk-rollups are gaining popularity among developers, investors, and traders due to their improved usability, faster transaction processing, and lower costs. Zk-rollup-based solutions like Zcash are attracting investors’ attention. As blockchain technology continues to evolve, performance and pricing will continue to improve. Layer 2 solutions and zk-rollups are just the beginning of the next era of advanced blockchain technology and cryptocurrency systems.