- what it is
- how zk-rollups compare with other rollup types
- the competitive landscape for zk-rollup creators
And who really was first 😉
2/ A Layer-2 rollup is a way to batch user transactions together for cheaper gas costs while preserving most of the security guarantees of Ethereum mainnet.
Two main types: optimistic rollups & zk rollups
3/ Optimistic rollups such as Optimism & Arbitrum publish periodic state roots to mainnet, and rely on fraud proofs to ensure state is honest
ZK rollups such as Loopring & Starkware publish state roots to mainnet, but also include cryptographic proofs of validity
4/ ZK rollups are generally preferred for their stronger guarantees, but they're technically challenging. Developers have to write custom "circuits" in esoteric programming languages. Even tiny changes to functionality can require massive changes to the underlying circuit.
5/ This is the problem that zk-rollups like Loopring and Starkware have run into. While theoretically powerful, they're so complex that few devs can build on top of them.
So the holy grail: what if you could run arbitrary Solidity code on a zk-rollup? This is called the zkEVM 🤯
6/ Let's walk through the competitive market landscape, and call out recent bizdev marketing shenanigans
10/ Loopring runs a zk-rollup, but it is not a zkEVM. It is purpose-built to handle a specific subset of activities such as token transfers and dex trades.
11/ Starkware runs a zk-rollup, but it is not a zkEVM. Developers must write custom logic using Cairo instead of Solidity.
12/ Setting aside who was "first", it's clear that the zkEVM holy grail is close! This is incredible news, the competition among multiple quality teams will only push innovation along faster.
13/ What does this mean for you, a nontechnical user?
Cheaper gas, more rollup options, and more apps on your favorite rollup.
Spot prices may have bull and bear markets, but technical innovation is up only 🔥
All top 5 rollups by TVL are "normal" rollups: Arbitrum, Base, Optimism, Blast, and ZKsync.
Data availability (DA) lives on EIP-4844 blobs, there's a single centralized sequencer, and the canonical state root is determined by an Ethereum L1 contract.
"Sovereign" rollups are a new term being pushed by Celestia, where DA can live wherever and canonical state is not determined by a zk-verifier or fraud proof, but simply social consensus. This is not actually a rollup, inherits no security, it's an L1 with validator set size 1.
You can see all transactions flowing through it on BaseScan at https://t.co/cGGF1cF4Kfbasescan.org/address/0xcf20…
Friend shares are not an ERC20, but they're tracked similarly to one. This means you could theoretically write a wrapper intermediary to spin up liquidity pools, but imagine there's a reason they've shied away from this. Nobody has done so yet
a virtual automated market maker is like a uniswap v2 pool without any actual liquidity. it simulates having liquidity, and moves prices up and down with buys and sells like it was xy=k
but there are no underlying tokens, just math simulations
why is this an attractive product?
because it gets you levered perp-like behavior on arbitrary tokens, like NFTs. this makes bootstrapping markets easier. and users love it, as shown by 500MM of volume on the nftperp beta
This was always obvious, btw. If they can recover your seed phrase for you when you lose your ledger, then they can recover your seed phrase when compelled by a government, when an insider gets bribed, when the database gets hacked, etc. TEEs get broken all the time
Their “privacy” policy is absolutely ridiculous. Zero chance they won’t roll over and leak your private keys to the nearest government at first signs of trouble
Stop using Ledger hardware wallets. Migrate away from them immediately. They’ve shown nothing but gross incompetence and wild misunderstanding of their own purpose. And now they’ve publicly admitted to intentionally backdooring their own proprietary hardware. Stop using Ledger
“it’s opt-in, you don’t have to use it”
this is misdirection. a hardware wallet should have a secure enclave where the private key never leaves the device, under any circumstances
they’ve opened APIs for the enclave to send encrypted key shards to 3rd parties on the Internet
Reminder:
- Ledger previously had a data breach leaked a list of customer names and addresses
- Ledger is encouraging customers to wear hardware wallets as public jewelry
- Ledger can always leak private keys from the enclave with further firmware updates