Crypto is currently languishing like the internet did in 1996 with slow speeds and few practical use cases, says Steve Newcomb, chief product officer of Matter Labs.
But a major increase in bandwidth and security soon after saw the internet become a crucial part of daily life across the globe — and we’re right on the cusp of that happening for crypto in the next few months.
“Nobody trusted their credit card on it and everybody thought it was a fad and there weren’t any use cases for it,” Newcomb explains.
“And then we had 10x moments in bandwidth and then SSL came, and HTPS where you got that lock — that was a 10x moment in trust. Suddenly in 2005 ecommerce just went through the roof.”
Crypto’s ‘10x’ moment could finally be here, with zkSync’s Ethereum Virtual Machine compatible mainnet launching on October 28. EVM is essentially the operating system for Ethereum and enabling it to work using zero knowledge rollups means everything running on Ethereum can seamlessly port over to experience a huge jump in speed and lower costs.
They’re not the only ones attacking the problem: Polygon launched its testnet for its own zkEVM this week with Aave, Uniswap and Lens all committing to deploy on it. Scroll launched its “Pre Alpha testnet” in July while StarkWare’s zk solution has been ploughing through millions of transactions a month.
These solutions are all well funded, with Scroll raising $30M, Starkware raising $150M and Polygon raising $450M. Newcomb hints that zkSync’s own funding round is in the same ballpark as Polygon’s, but it’s yet to be officially announced.
StarkWare is way out ahead of the pack, having launched its own zk rollup solution nine months ago and it turned on recursive scaling in August. But it also made the risky decision to use a custom programming language called Cairo in order to scale more efficiently. This could see adoption by the big protocols move to the path of least resistance on the EVM compatible solutions.
All of the solutions are also working on recursive scaling and/or ‘Layer 3’ implementations which will see Ethereum transactions potentially become thousands of times faster, remove the need for interchain bridges, and allow crypto to finally realize its true potential.
What is a zero knowledge thingamy?
ZK rollups are among the biggest buzzwords in blockchain today. The technology allows for thousands of transactions to be computed away from the achingly slow Ethereum blockchain, with a tiny “validity proof” verifying that all the transactions were carried out correctly. So you can “roll up” 10,000 transactions carried out elsewhere into a single ETH transaction. This is a big deal because even after the Merge Ethereum limps along at 15 transactions per second.
ZK rollups have been used for NFTs and financial transactions for some time now on platforms like Loopring, dyDx and others. But as co-founder Vitalik Buterin pointed out during ETH Seoul in August:
“In general, I think we’ve learned that people don’t just want like a scalable money thing, they want a scalable EVM.”
It’s one of what Newcomb calls “five magic elements” for ZK rollups. In his view a ZK rollup solution should be general purpose, EVM Compatible and support Ethereum’s programming language Solidity. It should also be open source to fit with crypto’s founding ethos, and it should have a token distribution that decentralizes the protocol rather than concentrates wealth among the team.
By curious coincidence, zkSync has achieved all five of these self imposed metrics. (Newcomb says he can’t detail the exact token distribution, but says around 30% for insiders seems to be the “consensus.”)
The checklist is something of a veiled criticism of competitor StarkWare which is set to give 49.9% of its StarkNet token supply to investors and core contributors. It’s also not open source, although it plans to give control of the IP to its community.
Co-founder Eli Ben-Sasson explains that the only way to take full advantage of the scaling afforded by ZK rollups is to use a custom language like Cairo.
“I’m very confident people will realise once they turn on proofs that the goal is not to simulate EVM. The goal is to reach scalability. To put 10,000, 100,000, one million transactions and have their proof fitted inside a single block of Ethereum,” he says.
“I’m willing to bet that you won’t see a full blown ZK EVM that can put a million transactions inside a single proof on Ethereum. As we can easily do today and have been doing for months and years.”
Scaling versus compatibility
StarkWare’s Odin-Free explained on Twitter there are complicated mathematical reasons behind the need
GIPHY App Key not set. Please check settings