ZK-Rollups and Optimistic Rollups Technology

Crypto Fundamental

Rollups is a scalability solution for Ethereum that executes transactions in an external chain (layer 2), outside the core Ethereum network (layer 1), but the data or results of those transactions are placed on layer 1 in a dedicated smart contract. That's how we get low gas charges and almost instant transactions. Even if the Tier 2 network stops fully functioning, we can still get our funds back to Tier 1 because the smart contract on Ethereum will continue to work.

There are two types of Rollups:
- Optimistic Rollups.
- ZK-Rollups.

Optimistic Rollups

Instead of checking every transaction at layer 2, the underlying network simply broadcasts them and "optimistically" assumes they are legitimate if it is not challenged by anyone. Computations only occur when proof of fraud is in issue.

Optimistic Rollups can offer improvements in scalability because they do not perform any computation by default. Since computation is a slow and expensive part of Ethereum usage, Optimistic Rollups can offer up to 10-100x improvement in scalability. This number will become even higher with the transition to Ethereum 2.0.

Zero Knowledge Rollup

ZK-Rollups aggregate hundreds of off-chain transactions and generate a zero-disclosure cryptographic proof known as SNARK, which allows one party to prove that it has certain information without revealing that information. This feature provides a high level of privacy in public blockchains and other networks.

ZK-SNARK is used to verify every block added to the network, eliminating the need to trust validators. While Optimistic Rollups solution is based on the fact that all validators are honest, ZK-Rollups verifies their honesty with the mathematical proof of ZK-SNARK. All transactions go through Level 2, and ZK-SNARK is placed at Level 1. The implication is that ZK-Rollup does not need to rely on the honesty of the validators, and the security of the external network is the same level as the security of the Ethereum network.

There are no delays in ZK-Rollup when withdrawing funds from tier 2 to tier 1 because the proof of validity accepted by the ZK-rollup contract has already validated the funds. Unlike Optimistic Rollups, there is no fraud check required here, which can delay withdrawals for up to two weeks.

ZK-Rollups has another opportunity to reduce fees. The more people who use this technology for transactions, the cheaper the transaction can be for each of them. ZK-Rollups can bundle any number of transfers into one data packet. When such a packet gets back to Ethereum, you have to pay for one action. This fee is distributed to everyone whose transactions were in the packet. As a result, the more transactions in the data packet, the less each user who sent the transfer pays.

Of the disadvantages: So far, the low level of compatibility of some smart contracts. The developers already know how to solve the problem and are actively working on it.
According to Ethereum founder Vitalik Buterin, ZK-Rollups technology will become the dominant paradigm of Ethereum scaling.

Thank you for your attention and see you again!

Always yours C.J.

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