Comparing ZK Technology between Ethereum and Solana An Innovative Perspective

For a long time, the demand for scalability solutions in blockchain technology has been a controversial topic. As blockchain networks develop, the transactions per second (TPS) has become a critical issue. The current capacity of major blockchains like Bitcoin and Ethereum is insufficient to handle the transaction volume required for widespread adoption. For example, Bitcoin processes approximately 7 transactions per second, while Ethereum processes around 15 transactions per second. In contrast, Visa processes an average of 1,700 transactions per second. Without scalability solutions, blockchain cannot compete with traditional financial systems and achieve mass adoption. The actual cost of these transactions is also a concern. As more people use blockchain simultaneously, transaction fees become very high, making small transactions impractical, especially during peak usage periods. For example, during the DeFi boom in 2020 and 2021, Ethereum gas fees skyrocketed, making even small transactions too expensive. To address these challenges, we need to introduce scalability solutions. Scalability solutions are technologies designed to improve the capacity and efficiency of blockchain networks to process more transactions. The main goal of scalability solutions is to increase network throughput, measured in transactions per second (TPS), while maintaining or improving security, decentralization, and cost-effectiveness. Scalability solutions are essential to reduce transaction costs, allowing blockchain technology to be used by a wider audience and for everyday use. Slow transaction times and high fees diminish user experience, hinder new user adoption, and limit the availability of decentralized applications (DApps). To attract and retain users, blockchain networks must offer seamless, fast, and cost-effective transactions, which can be achieved through effective scalability solutions. Today, we will explore how different networks address these challenges, particularly by comparing zk Rollups on Ethereum and zk Compression on Solana. These two technologies aim to enhance scalability, but they achieve this goal in different ways, reflecting their respective ecosystems’ unique design principles and priorities. What are ZK Rollups? Zk Rollups are Layer 2 scalability solutions that improve blockchain scalability by moving computation and state off-chain while storing transaction data in bundled batches on-chain. They utilize cryptographic proofs called zk-SNARKs to prove the validity of these bundled transactions without revealing the actual data. This ensures the security of the Ethereum mainnet while making transactions on the sidechain faster and cheaper. How do they work? The sequencer batches off-chain transactions. The sequencer generates zk-SNARK (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) proofs, which are compact cryptographic proofs that verify the validity of the transactions without revealing all the details. The proofs and transaction data are submitted to the Ethereum mainnet. Anyone can verify the proofs on the mainnet to ensure the validity of the transactions. If there is a dispute, anyone can submit the original transaction data for on-chain settlement, leveraging Ethereum’s robust security. Rollups include an encrypted proof, specifically a zero-knowledge proof, to verify the correctness of bundled transactions. The Ethereum network only needs to verify this proof, rather than verifying each individual transaction, significantly reducing the computational load. Transactions are grouped in the aggregator in an off-chain manner. Zero-knowledge proofs are generated to confirm the validity of aggregated transactions. The proofs and minimal digest data are submitted to the Ethereum mainnet for verification. Once verified, the state on the Ethereum mainnet is updated to reflect the aggregated transactions. What is ZK Compression? ZK Compression is a technology that reduces data storage costs on the Solana blockchain by storing only the “fingerprint” (hash) of compressed data on-chain while preserving the privacy of the data. The “ZK” in ZK Compression stands for zero-knowledge, indicating the preservation of privacy in compressing the data. This approach helps significantly reduce the amount of data that needs to be stored on-chain, lowering storage costs for developers. How does ZK Compression work? ZK Compression reduces the cost of storing and maintaining data such as account balances and smart contract storage on Solana by leveraging zero-knowledge (ZK) technology. Here is a breakdown of how it works: Data for each account is compressed into a unique hash value. This hash includes not only the account information but also its position in the state tree, ensuring its uniqueness. This hash is stored in the leaf nodes of the state tree. The state tree, similar to a Merkle tree, is a data structure where each node is the hash value of its child nodes. The state tree aggregates all account information and data, compressing them into a single top-level hash value called the state root. The state root, the top-level hash value of the state tree, is stored on the blockchain. This root serves as a fingerprint of the entire state tree, ensuring the integrity and completeness of all the data in the tree. Detailed account data is not directly stored on the blockchain. Instead, it is stored as call data in cheaper Solana ledger space. Only the state root and some basic metadata are stored on-chain, significantly reducing storage costs while ensuring data security. To ensure the integrity and authenticity of the compressed data, ZK Compression uses zero-knowledge proofs (ZK-proofs). These proofs verify the accuracy and completeness of the data without revealing the actual content, ensuring the security and verifiability of the compressed data. It is important to note that ZK Compression is not an L2 solution but an upgrade to improve data storage efficiency on Solana. ZK Compression is not a Layer 2 Rollup because, unlike L2 solutions, the execution of transactions and the storage of state happen directly on the Layer 1 (L1) chain, which is Solana in this case, instead of a separate chain. The key difference lies in the location of execution and state management. With zk Rollups, these processes occur on an auxiliary chain that periodically sends commitments and proofs to the main L1 chain, which is Ethereum in this case. In contrast, ZK Compression keeps all execution and state on Solana itself, without the need for a separate execution layer. The fundamental difference means that while zk Rollups offload some processes to an auxiliary layer to enhance scalability, ZK Compression optimizes data storage directly on the main blockchain without creating a separate execution layer. The main differences between zk Rollups and zk Compression on Ethereum and Solana The main differences between zk Rollups on Ethereum and zk Compression on Solana fundamentally lie in their approaches to enhancing blockchain scalability and optimizing data storage: Execution and state management: zk Rollups: Transaction execution and state storage occur on an auxiliary chain separate from the Ethereum mainnet. The auxiliary chain periodically sends commitments and proofs to the Ethereum mainnet. zk Compression: All transaction execution and state storage happen directly on the Layer 1 (L1) chain, which is Solana in this case. There is no separate auxiliary chain involved. On-chain data processing: zk Rollups: Only cryptographic proofs and minimal digest data are submitted to the Ethereum mainnet for verification. This approach minimizes the computational load on the mainnet. zk Compression: Only the “fingerprint” (hash) of compressed data and the corresponding ZK proofs are stored on the Solana blockchain. This significantly reduces the amount of data stored on-chain, lowering storage costs. Privacy and integrity: zk Rollups: zk-SNARKs are used to ensure the validity of transactions without revealing detailed transaction data. This protects privacy while maintaining the security of the Ethereum mainnet. zk Compression: The combination of data compression and ZK proofs optimizes blockchain storage while mathematically proving the integrity of compressed data. It ensures that the decompressed data matches the original data without revealing its content, protecting privacy. Nature of the solutions: zk Rollups: Considered Layer 2 scalability solutions as they offload transaction execution and state management to a secondary chain, enhancing scalability and reducing costs on the mainnet. zk Compression: Not a Layer 2 Rollup but an upgrade on Solana Layer 1 chain aimed at directly improving data storage efficiency. It optimizes storage costs without introducing a separate execution layer. Conclusion: In conclusion, both perspectives on scalability emphasize the importance of a balanced approach to ensure blockchain networks can achieve sustainable growth while maintaining their core principles. Solana’s achievements in this regard provide a compelling case for the adoption of advanced scalability solutions in the entire blockchain industry, paving the way for wider adoption and innovation.