The 4 Zk-rollups with huge potential in 2023
Explore the 4 Zk-rollup projects that have the potential to be the future of Ethereum scaling and driving mass adoption. Learn how can you benefit from these projects right now.
After seeing the success of Arbitrum and Optimism in the previous year it is time to ask ourselves what will the final scaling solution look like. So far, the Zk rollups seem to be very promising in this field. In this post, you will find a brief overview of the 4 Zk projects with the potential for massive growth over the following year.
What's all the buzz about?
Zero-knowledge rollups (ZK-rollups) are a solution to the scalability issues faced by Ethereum's mainnet, caused by increased popularity and high gas fees. Rollups work by bundling transactions and uploading them to the mainnet for verification, which reduces computational pressure and fees for users.
The verification of bundled transactions is done using cryptographic proofs (zero-knowledge proofs), making the process safer and faster compared to optimistic L2 scaling solutions like Arbitrum and Optimism.
When talking about prominent upcoming projects it's impossible not to mention the newest scaling solution from Polygon. Their take on rollups is a bit different from the competitors' but promises great results.
Now, What exactly is the zkEVM? In general, the zero-knowledge Ethereum Virtual Machine (EVM) is a significant part of the rollup - it is the very environment in which smart contracts are executed and transactions are made.
Polygon zkEVM claims to bring an exponential improvement in scalability and transactions per second (TPS) on the Ethereum Mainnet. The project leverages verifiable zero-knowledge proofs and a Proof of Donation (PoD) consensus mechanism to ensure its validity.
Read more about Polygon zkEVM and it's launch in our latest article!
The Consensus Mechanism
In this mechanism, participants, known as coordinators, bid a certain number of tokens to be selected to create the next batch of transactions. This process is conducted automatically and in a decentralized manner, providing the network with a way to ensure the validity of the transactions while keeping them fast and secure.
In the latest Consensus Contract, the network employs two permissionless participants - Sequencer and Aggregator - with properly designed incentive structures to keep the network fast and secure.
With a fully compatible EVM scaling, developers can easily deploy dApps on Polygon just as they would on Ethereum, and compatibility extends to wallets, smart contracts, and developer tools written in Solidity.
As Polygon zkEVM goes online in 2023, it's expected to see a surge in dApp deployment, hopefully following last year's record 160% growth in smart contract deployment.
zkSync is a ZK rollup protocol that uses cryptographic validity proofs to provide scalable and low-cost transactions on Ethereum. In zkSync, computation is performed off-chain and most data is stored off-chain as well, providing mainnet-like security with zero reliance on 3rd parties.
The protocol is EVM-compatible and offers a standard Web3 API, preserving key EVM features such as smart contract composability and introducing new features such as account abstraction.
Can I try zkSync now?
At this time only closed testing is being done, however, the full launch alpha of zkSync 2.0 is expected in Q2 2023. It is poised to be the largest Layer 2 launch in the history of Crypto, with more than 150 innovative projects coming from founders all over the world. Potential airdrops for early adopters are also expected.
Layer 3 HyperChain Concept
A Layer 3 testnet is being released in early 2023 as a prototype to demonstrate a zkRollup as a fractal HyperChain. The Layer 3 will consist of many interoperable and trustlessly linked chains powered by the zkEVM.
The testnet will serve as a foundation for public experimentation, research, and development of Layer 3, providing an opportunity for users to port existing projects or create brand-new ideas and concepts.
Loopring protocol is a comprehensive solution for building high-performance, secure decentralized exchanges (DEXs), automated market makers (AMMs), and payment applications. It uses zkRollup technology to improve the scalability and reduce the cost of transactions on the Ethereum network.
With its zkRollup technology, Loopring is able to reach transaction throughput of approximately 1000x that of Ethereum, with the ability to process up to 2,025 trades per second. This translates to greatly reduced transaction costs, with trades and transfers costing only fractions of a cent.
Loopring was the first rollup protocol deployed on Ethereum and has been leading the Layer 2 scaling ecosystem.
LRC is the native cryptocurrency of the Loopring protocol and serves as an important aspect of the overall ecosystem. It is used to incentivize behaviors that are beneficial for the protocol, allowing token holders to have a say in the system and further drive the transition to Ethereum Layer 2.
The L2 App
The Loopring L2 App is a one-stop shop for all the utility functions of the Loopring Protocol. It has several features including automated market maker (AMM), orderbook trading, liquidity provision, staking, non-fungible tokens (NFTs), and more. With this app, users can easily access and utilize the full range of services offered by the Loopring Protocol in a seamless and user-friendly way.
StarkWare Industries was founded in 2018 by Eli Ben-Sasson, one of the founders of the privacy crypto project Zcash. StarkWare already has a lot of strong names on their team. After years of development, they recently started to gain mass attention as their products are nearing the mass adoption state.
What gives StarkWare a competing edge?
StarkWare products use a cryptographically advanced zero-knowledge method called zkSTARKs (Zero-Knowledge Scalable Transparent Arguments of Knowledge) as opposed to most competing projects who use zkSNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge). The STARK type of proof has been dubbed somewhat more scalable and is also favored by the Ethereum Foundation.
Currently, only a few projects have integrated StarkWare products into their platforms, as the development is still in the early stages.
Platforms, where you can try out StarkWare scaling solutions, include for example popular perpetual exchange dydx or sport cards trading game Sorare.
These 4 projects aim to tackle the scalability issues faced by Ethereum. Each project offers its own unique solution, from Polygon's Proof of Donation consensus mechanism to Loopring's high-performance decentralized exchange. As the demand for Ethereum scaling solutions increases, these projects have the potential for massive growth in 2023 and beyond.
However, bear in mind that many other scaling solutions exist and no one knows with certainty what the final solution will be. We are operating in a space of extreme uncertainty and volatility so you should be very mindful of your steps.