Advancements in Ethereum’s Ecosystem: An Overview
This article is authored by Rob Viglione, the CEO of Horizen Labs.
Key Developments Along Ethereum’s Roadmap
Recently, Ethereum has reached significant milestones that enhance its network functionality. Notably, EIP-4844, also known as Dencun, introduced innovative data storage solutions, like blobs and proto-danksharding, which dramatically reduce costs for Layer 2 solutions. This progress has led to decreased transaction fees across the network.
Enhancements in Layer 2 Solutions
Layer 2 solutions, particularly optimistic rollups, have become increasingly integrated into daily applications. These improvements facilitate transactions that can cost less than a penny, reinforcing Ethereum’s core infrastructure.
Challenges of Network Congestion
Despite these advancements, Ethereum continues to experience significant congestion. As the number of decentralized applications (dApps) increases, there is heightened competition for block space and computation power. This congestion is problematic, leading to instances where users have paid exorbitant fees—sometimes exceeding 2 ETH—for transactions that may ultimately fail.
The Need for Offchain Computation
To improve efficiency, moving computation offchain while maintaining verifiable proofs is crucial. Zero-knowledge proofs (ZK proofs) facilitate this by allowing transactions to remain private while still being verifiable. However, the complexity and cost of verifying these transactions on Ethereum present significant challenges.
Understanding Rollup Ecosystems and Their Interests
Currently, branded Layer 2 solutions show limited interest in modular proof verification techniques like zkVerify, which could decrease verification costs substantially. Their current strategy focuses on verifying ZK proofs within a single chain, distributing costs across users.
Opportunities for Rollup-as-a-Service Providers
Rollup-as-a-Service (RaaS) providers embrace a more modular blockchain approach. Catering to small and medium-sized projects that cannot manage high verification costs, they advocate for sending proofs to a separate chain for verification to optimize efficiency. This modular model gains traction across various providers, particularly among those needing cost-effective solutions.
Arguments From Larger Layer 2 Solutions
Prominent Layer 2 ecosystems often argue that moving proof verification to a separate layer compromises security. However, many already verify proofs off-chain without disclosing this practice. Additionally, while some prefer aggregating proofs for efficiency and cost-sharing, this method can delay transaction verification.
Current Limitations of the Ethereum Virtual Machine (EVM)
As we explore the relationship between ZK technology and Ethereum, it becomes clear that the EVM is still operating at a 2017 level of sophistication. Currently, Ethereum supports only a limited number of mathematical operations for zero-knowledge elliptic curves via precompiles, which can hinder efficiency and increase transaction costs.
Implications for Users and Developers
Due to these limitations, developers face challenges selecting the most appropriate zk-SNARK for their applications. The EVM’s shortcomings may necessitate trade-offs that could impact performance and costs.
The Need for Long-Term Improvements
Despite the potential for advanced precompiles to improve efficiency, the implementation process on Ethereum can take years. The last notable update occurred in 2017, highlighting a pressing need for significant enhancements to the EVM, especially regarding on-chain ZK proof verification costs.
Horizen Labs’ Contributions to Addressing EVM Limitations
At Horizen Labs, we tackle these issues through:
- Modular Proof Verification: Offering zkVerify to enhance verification processes.
- Advanced EVM Compatibility: Developing an Ethereum-compatible chain that supports the latest zero-knowledge precompiles.
Superiority of Horizen 2.0
Horizen 2.0 is built on Substrate, allowing for seamless upgrades without the need for hard forks or extensive node-side modifications. This innovation attracts teams either seeking a cohesive community within Horizen or those willing to customize their rollup using RaaS with the benefits of offchain proof verification.
The Path Forward for Ethereum and ZK Technology
Numerous pathways exist to evolve the EVM alongside zero-knowledge technology, but urgent improvements are essential before the next wave of blockchain adoption occurs.